Korea Set for Record Surge as Global AI Momentum Returns | Daybreak Europe 7/31/2026

Record Rally in Korean Stocks [00:00:00]

• The Korean KOSPI is on track for its biggest ever gain, surging by a record 18%.
• This rebound follows a significant drop earlier in the week and the activation of circuit breakers.
• Analysts describe the movement as a genuine relief rally, more fundamental than bargain hunting.
• The surge is supported by a bounce in U.S. tech stocks and upbeat earnings from companies like Amazon.

  Analysts saying that this is more fundamental than bargain hunting, more of a genuine relief rally.

AI Trade Revival and Chip Stock Performance [00:01:15]

• Aggressive spending forecasts from Amazon are driving a powerful rally in global chip stocks.
• Citadel reportedly bought a large portion of AI stocks previously held by the hedge fund Situational Awareness.
• Samsung and SK Hynix saw gains of over 20%, underpinned by these developments.
• Domestic developments, including sovereign wealth fund investments in AI, are also contributing.

  Aggressive spending forecast from Amazon helping drive a powerful rally in global chip stocks.

Bank of Japan's Decision and Yen Intervention [00:01:30]

• The Bank of Japan raised its growth outlook while keeping interest rates on hold.
• This decision came a day after the Japanese government intervened to support the yen.
• The yen experienced its biggest intraday move higher in over two years following the reported intervention.
• Despite intervention, the yen is trading weaker, with analysts awaiting Governor Ueda's comments for hawkish messaging.

  The Bank of Japan raises its growth outlook as rates remain on hold, a day after the country's government stepped in to support its currency.

Amazon's AI Investment and Apple's Challenges [00:03:45]

• Amazon's cloud revenue growth was strong, with AWS sales jumping 37% to over $42 billion.
• The company boosted its capital expenditure forecast to approximately $220 billion by 2026, primarily for AI spending.
• CEO Andy Jassy stated that even this increased spending might not meet all demand in 2026 and 2027.
• Apple forecasted lower-than-expected revenue growth, citing supply shortages, particularly for memory, which CEO Tim Cook described as a "100-year flood."

  We now believe we will spend approximately $220 billion in cash CapEx in 2026, the higher cost of memory pushing this number up from our prior estimate of about $200 billion.

Middle East Peace Deal and Lingering Questions [00:05:30]

• President Trump announced that the U.S.-led Board of Peace has reached a deal for Hamas to disarm.
• However, significant questions remain regarding the extent of the agreement and its implementation timeline.
• Hamas officials stated they will not disarm until Israel withdraws, a condition with unclear feasibility from the Israeli side.
• Analysts suggest the announcement may be driven by President Trump's need for a win ahead of midterm elections and Benjamin Netanyahu's re-election prospects.

  President Trump says the U.S.-led Board of Peace has reached a deal for Hamas to disarm.

AXA's Financial Performance and Wildfire Impact [00:07:30]

• French insurer AXA reported a 2% increase in first-half profit, meeting expectations.
• The CEO, Thomas Boubel, emphasized the company's diversification and solid track record in managing events like wildfires.
• While acknowledging the tragedy of wildfires, Boubel stated it's too early to quantify their cost, assuring that AXA has managed such events within its numbers previously.
• He stressed the importance of prevention and adapting human behavior to mitigate risks associated with climate change and natural catastrophes.

  These fires are always very tragic events. And when I think about them, my thoughts first go to the victims of these wildfires, in particular to firefighters who have lost their life.

Citadel's Investment in Situational Awareness [00:11:30]

• Ken Griffin's Citadel has purchased a significant portion of AI stocks held by the hedge fund Situational Awareness.
• Situational Awareness, led by a former OpenAI researcher, experienced a sharp decline in assets this month due to volatility and leverage.
• The fund grew from $225 million to over $20 billion at its peak with concentrated bets on AI.
• Citadel's acquisition is seen as easing selling pressure on AI names, contributing to the market's positive sentiment.

  Bloomberg has learned that Ken Griffin's Citadel has bought a big chunk of the AI stocks held by situational awareness.

Central Bank Actions and Market Reactions [00:15:00]

• The Bank of England kept interest rates steady at 3.75%, with Governor Andrew Bailey stating the committee is not nearing a hike, despite three members voting for tighter policy.
• Bailey expressed concern about rising youth unemployment and a "low-hire, low-fire economy."
• Market pricing for 2026 tightening by the Bank of England is considered too aggressive by some analysts.
• The Fed is navigating inflation data, with some suggesting a need for more disinflationary prints to adjust market expectations.

  I think we're seeing a slow softening of the labour market. We're seeing a slow disinflation in underlying inflation.

Forvia's Performance and Diversification Strategy [00:20:00]

• French car parts maker Forvia reported better-than-expected first-half operating profit and reaffirmed its annual guidance.
• The company improved its operating margin to 6% and increased cash flow, further deleveraging to 1.6 times.
• Forvia is actively engaging with Chinese OEMs, with 17% of its global order intake coming from Chinese customers.
• The company is also diversifying into adjacencies, including defense, and has secured its first contract for drone production.

  And all that also, auto intake was good with 15 percent up over prior year.

Climate Change and Wildfire Likelihood [00:22:30]

• A group of scientists warns that climate change has made weather conditions fueling recent European wildfires at least twice as likely in France and 20 times as likely in Spain.
• These wildfires have consumed hundreds of square miles, with fire crews battling blazes across Europe.
• The World Weather Attribution Group highlighted the severity and rapid spread of these fires, some producing fire storms.
• Experts emphasize the need for prevention, land management, and adapting human behavior to mitigate the increasing risks.

  A group of scientists warning that climate change may made the weather that's fueled Europe's recent wildfires at least twice as likely in France and at least 20 times as likely in Spain.