César Pérez Ruiz, Chief Investments Officer Pictet Wealth Management.
The week in review
Investors ran for safety last week, concerned about the sustainability of the artificial intelligence (AI) boom, social unrest in France, and fresh Middle East tensions. The flight to safety sent US 10-year Treasury yields — inversely related to their price — down 9 basis points. In this market, lower yields represent a growth warning, while higher yields raise valuation concerns as they put pressure on the equity risk premium. Adding to growth concerns, Brent crude hit a near-six-month high on Friday.
The S&P 500 [1] fell 0.5% on the week. Markets are scrutinising the fast-accelerating size and cost of AI data centres and questioning the timing of returns.
Meta’s CFO, Susan Li, said the company’s new personal agent, Muse, has compute intensity that means “expanding its user base will require significant investment, and we expect total serving costs to rise.” Neocloud companies — specialist providers of computing capacity for AI workloads — sold off on concerns about their balance sheets. Separately, Amazon scrapped plans to build four data centres on a USD 427 million site in Northern Virginia following local opposition.
In France, Carrefour shares plunged after a profit warning due to riots, and luxury goods group Hermès reported a slowdown in revenue growth.
In more positive news, EU policymakers agreed a provisional market securitisation deal that would unleash billions of euros to finance initiatives.
Quote of the week
Ken Griffin, founder of hedge fund Citadel, said “there are almost certainly bubbles within this moment in time”.
Key data
The National Association of Home Builders (NAHB) Housing Market Index fell 3 points to 29 in October 2026, marking the lowest reading since June 2012. The US pending home sales index fell 7.3% to 66.0 in September, compared with expectations for a fall of 0.5%. The final October University of Michigan Index of Consumer Sentiment came in at 48.0, compared to 46.3 forecast.
Source: Pictet WM AA&MR, Thomson Reuters. Past performance, S&P 500 Composite (net 12-month return in USD): 2021, 28.7%; 2022, -18.1%; 2023, 26.3%; 2024, 25%; 2025, 17.9%.
