November 1-15, 2025

2025-11-04

[BNN Bloomberg, Terry Cain - Canada]: Budget Day

The federal government is set to unveil its budget today. It will be the Liberals’ first fiscal update in almost a year and the first summary of Prime Minister Mark Carney’s agenda since he was elected in the spring. The government says this budget is focused on boosting investment in Canada and shifting trade away from the United States. . Economists surveyed by Bloomberg expect Canada’s budget deficit to surge to $70 billion this fiscal year, and some see it rising to $100 billion. The Carney government is three votes shy of a majority, so it will need some opposition MPs to either support the budget or abstain from voting to avoid an early election.

Bitcoin slides

Bitcoin dropped to the lowest level since late June as a range of indicators underscored the bleak mood among crypto traders. The original cryptocurrency fell by more than 3% in early trading. One market veteran says that while bitcoin continues to be boosted by government support, growing institutional infrastructure, and continued retail inflows, recent selling by long-time holders resembles an “IPO-style distribution,” where early investors diversify after years of outsized gains.

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2025-11-03

[BNN Bloomberg, Terry Cain - Canada]: OPEC+ pauses output hikes: OPEC+ will pause output increases during the first quarter — after making another modest hike next month — as the group balances its push for market share against signs of an emerging surplus. Key members led by Saudi Arabia agreed during a video conference on Sunday to revive 137,000 barrels a day next month, matching increases scheduled for October and November, then take a January-to-March hiatus. The first quarter is normally a period of weaker demand, and delegates said the decision to pause from January reflects an expectation for a seasonal slowdown.

Microsoft US$10B data centre deal: Shares of Australian data centre owner and operator Iren traded sharply higher in the pre-market. Microsoft is signing a deal worth about US$10 billion with the company to purchase AI cloud capacity. The five-year agreement will provide Microsoft access to Nvidia accelerator systems in Texas. Once the deal is implemented, Iren’s CEO says it’s expected to generate about US$2 billion in revenue per year.

Buffett’s cash pile growing: Warren Buffett’s cash pile has hit a record high. The Oracle of Omaha’s firm, Berkshire Hathaway, reported its cash position rose to US$381.7 billion in the third quarter. Operating earnings surged 34 per cent to US$13.5 billion, as the firm’s insurance underwriting profit more than tripled in a period marked by unusually low disaster activity. The 95-year-old Buffett plans to step down as CEO at year-end, with Canadian Greg Abel set to take over.

[Investopedia, USA]: When Nvidia became the world's first $5 trillion company last week, the milestone underscored how much AI has come to dominate the economy. The chipmaker, along with six other big tech companies, now makes up nearly a third of the entire stock market.

Nvidia's market cap is 7% of all 3,265 publicly traded U.S. companies tracked by marketcap.com.

When you add Nvidia to the other top six companies by market cap—Apple, Microsoft, Alphabet, Amazon, Broadcom, and Meta, all of which are heavily involved in AI—they make up 32% of the total value of the stock market.

Nvidia's value has surged because it manufactures chips that power the AI expansion.The statistic highlights how heavily the future of the U.S. economy is now invested in the success of AI technology. While the stock market is not exactly the same thing as the economy, the high concentration of investment in AI is evident in other figures as well.

Companies are pouring money into AI on a massive scale: Silicon Valley plans to invest $400 billion in the technology this year, according to The Wall Street Journal.

In the first half of 2025, investment in computer equipment accounted for 92% of the GDP's growth, according to an analysis by Harvard economics professor and former Obama economic advisor Jason Furman.

What This Means For The Economy

The stock market's heavy concentration in AI could pay off for investors if the technology lives up to its promise, but risks wrecking the economy if it does not.

AI developers say the technology promises to spur a world-altering surge of productivity and wealth. However, as more and more eggs are added to the basket of the AI ecosystem, concerns about a potential bubble have grown louder.

With so many bets concentrated in such a narrow field, more economists are speculating about the potential damage to the broader economy if the technology fails to live up to the hype and the market collapses. Those worries have intensified as AI companies become increasingly entangled in complex, circular multibillion-dollar deals with one another.

AI Chatbot, Generative AI

To be sure, many experts don't see AI as a dotcom-like bubble. Federal Reserve Chair Jerome Powell dismissed the comparison this week when speaking with reporters at a press conference, saying that today's AI darlings are much more solid business propositions than their dotcom forerunners.

"This is different in the sense that these companies that are so highly valued actually have earnings and stuff like that," Powell said.

Still, if Powell and others are wrong, a market crash on the scale of the dotcom bubble collapse could be far more devastating in today's economy than it was a quarter-century ago.

A dotcom-like flameout would wipe out $20 trillion of wealth for American households, Gita Gopinath, former chief economist at the International Monetary Fund, wrote in The Economist this month. And with trade wars fueling uncertainty and the U.S. government burdened by a mountain of debt, the economy may be less able to bounce back than it was at the turn of the millennium.

"A market crash today is unlikely to result in the brief and relatively benign economic downturn that followed the dotcom bust," Gopinath wrote. "We should prepare for more severe global consequences."