Takaichi and the AI trade in focus this week

There’s nearly nothing that apparently can’t be deployed as a trading strategy. We have the “TACO” trade, the Fed put trade, the artificial intelligence trade and, now, capturing traders’ attention is the “Takaichi trade” — fueled by Japan’s Prime Minister Sanae Takaichi’s landslide victory in Sunday’s elections.

The Takaichi trade is fueled by expectations that the prime minister’s economic policies will boost equities, while weakening the yen as she prefers a looser monetary policy and higher government spending.

Indeed, Japanese stocks hit a record high on Monday, and extended gains on Tuesday. “The strong LDP win is warming the hearts of investors,” said Frederic Neumann, chief Asia economist at HSBC.

U.S. markets also closed higher overnight. Big Tech stocks mostly rebounded, with Oracle jumping 9.6% and Microsoft advancing 3.1%. That helped the S&P 500 climb 0.47% and the tech-heavy Nasdaq Composite jump 0.9%. The Dow Jones Industrial Average ticked up 0.04% — but that still lifted it to another record close.

Heavy capex and financing concerns still swirl around Big Tech, however. Alphabet warned in its annual financial report last week that it could be left with “excess capacity” of data centers in a less-than-ideal scenario.

That said, the Google-parent is still planning to raise $20 billion from a U.S. dollar bond sale — with one bond having a 100-year tenor and denominated in sterling — according to people familiar with the matter, who asked to remain unnamed because the details are confidential.

In other tech news, ChatGPT is “back to exceeding 10% monthly growth,” according to CEO Sam Altman’s memo to employees. If the broader industry can enjoy such expansion over the long term, Alphabet is unlikely to face any “excess capacity” issues.

— CNBC’s Lim Hui Jie and Jennifer Elias contributed to this report.

Gold and silver price swings are powering algo traders and machine-learning funds

As gold and silver prices continue to seesaw, one corner of the hedge-fund industry is mining an opportunity from the huge swings in precious metals.

Commodity trading advisors, also known as trend-following or managed futures funds, are computer-driven investment strategies that trade investment trends across different futures markets, including equities, bonds, currencies, and commodities.

— Hugh Leask