Bloomberg Daybreak: Europe Edition
AI’s ‘Healthy’ Reality Check, US Midterm Countdown, UK's Slave Trade Legacy
· Summarized
Key takeaways
- Howard Marks said the AI trade’s recent losses have usefully weakened investors’ belief that AI-related companies are infallible, while Mark Cudmore argued that selective buying—not indiscriminate enthusiasm—could still work.
- Cudmore expects the next beneficiaries of AI to include consumer and service companies that gain productivity improvements, rather than only the large technology firms building AI infrastructure.
- Russia and Ukraine each reported cyberattacks on public-warning applications, including a false Ukrainian nuclear alert and an attack on Russia’s drone-warning system.
- Britain still rejects financial reparations for slavery, but Starmer has opened the possibility of structured talks and King Charles is expected to speak with unusually direct sorrow about the trade.
- The episode reported that fears of AI-generated writing are already changing human authors’ choices, with some avoiding repetition, the rule of three and em dashes because detectors or readers may associate them with AI.
Summary
AI stocks lose their aura of infallibility
Markets were stabilizing after Friday’s technology sell-off: Nasdaq futures were up about 1%, S&P 500 futures about 0.5%, and most Asian stocks gained. The Nasdaq had fallen 3.5% Friday and the Philadelphia Semiconductor Index more than 7% as investors questioned companies whose core businesses are slowing while AI spending rises. Oaktree co-chair Howard Marks said the retreat had “burst the bubble of infallibility,” making investors more thoughtful and skeptical. He and Morgan Stanley’s Mike Wilson expected near-term volatility around the US midterms, but Wilson saw a possible buying opportunity.
Cyberattacks hit Russian and Ukrainian public-warning apps
Russia and Ukraine reported separate attacks on systems intended to warn civilians about danger. Russia’s emergencies ministry said a “massive” attack struck its app for alerts about incoming drones, while Ukraine said its alert app had been hacked and falsely displayed warnings of a nuclear threat. Ukraine blamed Russia for its incident; Moscow had not identified a culprit for the attack on its own systems. The reports came alongside news that US officials were promoting a plan for Russia to sell gas to an American entity, which would then resell it to Europe while bypassing sanctions.
European unrest, a Democratic split and an F1 milestone
Protests organized by Germany’s Gen Z Regelt, calling for education, health care, climate protection and an affordable life, turned violent in Frankfurt, Berlin and Cologne; more than 30 people were arrested in Frankfurt, while similar youth-led demonstrations have spread across France, Belgium, Portugal and Albania. In a key Michigan Senate race, Democrat Haley Stevens endorsed Republican Mike Rogers after breaking with nominee Abdul El-Sayed over Israel, highlighting tensions between progressives and moderates. Separately, 20-year-old Mercedes driver Kimi Antonelli became Formula One’s youngest world champion after finishing third in Mexico behind Max Verstappen and Lewis Hamilton, with nine wins in the season.
AI suspicion is changing how writers write
The hosts discussed Bloomberg reporting on Mia Ballard’s novel Shy Girl, which was accused of being AI-written. Ballard denies using AI, experienced a public backlash and mental-health problems, and is now self-publishing a new novella, Polly. The controversy centers partly on Pangram, an AI-detection tool whose score can influence how a book is perceived, much as university users worry about automated AI detectors. Writers are reportedly avoiding devices they associate with machine-generated prose, including rhetorical repetition, the rule of three and em dashes, changing both their writing process and their style.
Cudmore says the AI pullback is selective, not the bubble bursting
Bloomberg’s Mark Cudmore said Howard Marks’s skepticism and Mike Wilson’s “buy the dip” view are compatible: AI-linked stocks have lost their automatic appeal, but longer-term growth and earnings remain supportive. He expects funding costs and credit markets to reveal which companies can survive, noting that hyperscalers spend heavily while generating substantial cash. Cudmore also expects AI’s next phase to benefit consumer and service companies through productivity gains, widening the rally beyond expensive technology names; non-US indexes with less AI exposure could outperform. China may keep drip-feeding support until its market responds, but he said its next major lift-off had not arrived.
Britain rejects slavery reparations but opens a dialogue
Prime Minister Keir Starmer continues to reject financial compensation for Britain’s role in the transatlantic slave trade, but an opinion piece in The Guardian said he was open to conversations about “reparatory justice” and a structured dialogue with affected communities. King Charles was expected to address Commonwealth leaders in Antigua with “unflinching honesty and sincere sorrow,” though palace officials stressed that policy and any apology belong to the government. Caribbean nations are pursuing a coordinated approach through CARICOM, seeking not only compensation but cultural restitution, debt relief and climate justice; their updated plan also addresses gender-based violence, citing estimates that women comprised about 30% of the 20 million Africans forcibly transported across the Atlantic.
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Show notes
Your morning briefing. All the news you need to start your day.
On today's podcast:
(1) Recent artificial intelligence related market stumbles have somewhat burst the bubble of infallibility around the sector, said Howard Marks, co-chair of Oaktree Capital Management.
(2) Russia's emergencies ministry said on Monday that a "massive cyberattack" hit its application, designed to warn people of incoming drone attacks and other threats.
(3) US officials are promoting a plan for Russia to resume sales of natural gas to Europe via pipelines running through Ukraine, the Wall Street Journal reported.
(4) Mass demonstrations in Germany that passed largely peacefully on Saturday erupted in violence as night fell and rioters faced off against police in Frankfurt, Cologne, Hamburg and Berlin.
(5) Representative Haley Stevens, who lost the Democratic primary for Michigan’s US Senate seat, backed Republican candidate Mike Rogers, breaking with Democratic nominee Abdul El-Sayed and exacerbating a split between progressives and moderate party members.
(6) After crossing the finish line of the Mexico City Grand Prix behind race winner Max Verstappen and Lewis Hamilton, F1 history-maker Kimi Antonelli placed his hands on the steering wheel and his voice cracked as he said, “We did it, we did it.”
Podcast Conversation: Trying Not To Sound Like AI Is Changing How We Write
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