Last week US equity markets continued to move higher. Healthcare was the big outperformer with the sector up nearly 7% after Pfizer’s announcement with the White House around drug pricing and the US R&D and manufacturing investments. The most favored nation framework and avoidance of tariffs were both better than feared helping to trigger a sharp rally in the sector, that was the worst performing of the year coming into the week (the Yankees will need a similar kind of comeback). With the lack of economic data due to the shutdown there was some extra time to debate the state of the AI trade as OpenAI announced a series of partnerships/deals. Well, it’s a new week but the story remains the same. This morning the company announced a partnership with AMD to purchase GPUs to power 6gw of AI infrastructure. As part of the deal OpenAI will receive warrants to purchase up to 160ml shares, or nearly 10% of the company (recall Nvidia announced it would invest $100B in OpenAI as part of its recent partnership). AMD is up >30% in the pre-market while Nvidia and Broadcom are slightly lower. This isn’t the only deal announced this morning, Fifth Third Bancorp announced it would acquire Comerica in an all-stock transaction for >$10B. There has been an increasing amount of M&A announced recently and this one of the first in the long-awaited regional bank consolidation. US futures are continuing to push higher ahead of the open.

Expand article