See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week trial to Bespoke Premium. CLICK HERE to learn more and start your trial.
“Having been trained as a computer scientist in the 90s, everybody knew that AI didn’t work.” – Sergey Brin, 1/19/2017
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Bulls may have breathed a sigh yesterday that the market was able to hold its gains through the opening bell, but it hasn’t been able to hold them into today’s open as S&P 500 futures fall 0.40%, and the Nasdaq is set to open nearly a full percentage point lower. Treasury yields continue to march higher with the 10-year yield at 4.64%.
The culprit for both moves has largely been oil. WTI is up over 3% and back above $87 per barrel while Brent is back over $94. Gold prices are up over 1% to $4,131 per ounce, and Bitcoin is down about 1% but still above $65K.
Asian stocks had a mixed session overnight. Japan and Hong Kong both traded lower while China and South Korea were fractionally higher. Don’t let the modest gains in the KOSPI fool you, though. For most of the day, the index was up over 5% before succumbing to selling pressure into the close.
In Europe, stocks are higher across the board, though gains are modest, with most major benchmarks up less than 1%. The UK is the one exception, gaining 1.2% as CPI for June was right in line with forecasts.
In the US today, there’s no economic data on the calendar, but there have been several earnings reports in the pre-market, and the main event after the close will be Alphabet (GOOGL) and Tesla (TSLA).
Speaking of Alphabet, since the launch of ChatGPT in late 2022, the consensus has repeatedly concluded that Google had missed the boat on AI. It started with the initial release of ChatGPT when everyone said, “Where’s Google?” The company’s response was a “Code Red” all-hands-on-deck meeting to address the threat of ChatGPT and devise a strategy to respond. Internally, Google had its own LaMDA chatbot, but the company was reticent to release it over questions regarding the accuracy of its responses. ChatGPT had its own issues, but given the start-up nature of that company, they recognized that cool was just as important as accuracy.
The following February, after months of preparation, Google finally unveiled its response to ChatGPT, and in a much-ballyhooed presentation, they came up with Bard, which was anything but cool and landed on the market like New Coke. The stock plunged nearly 10% in response for its worst two-day decline since the Financial Crisis. As Google executives reeled, Sam Altman and the rest of management at OpenAI were popping champagne bottles.
Google shares didn’t do much on a relative basis for most of the current bull market, and up until last July, the stock had performed exactly in line with the S&P 500 over the trailing four years. Over the last year, though, shares have massively outperformed the S&P 500 in one of the best yearly runs in its history.
Besides impressive growth in the cloud business, the company’s efforts to monetize AI have proved successful. AI not only hasn’t displaced search, but growth in that business has accelerated. Gemini has also been a success as last year’s launch of Gemini 3 was seen as a formidable competitor to the market’s other leading models. Google has even gotten the Berkshire Hathaway stamp of approval with Warren Buffett initiating a $40+ billion equity investment in the company.
In the market, you’re only as good as your latest product, and Google is once again under the gun. The main battleground of AI now is coding, and the market once again finds itself asking “Where’s Google?” Bloomberg recently reported that Google is woefully behind in launching Gemini 3.5 Pro as star employees gripe about and even leave the company over its glacial pace in moving projects forward. Just as it took months to respond to ChatGPT, with the rise of agentic coding, Google once again looks flat-footed.
The repeated instances of the market viewing Google as behind the AI curve are even more remarkable when you read the headline below from Google founder Sergey Brin, where he admits that he didn’t see AI coming. Given the recent history, you may think it was from late 2022 or after that, but it’s not. Brin made those comments in January 2017! And that was more than a year after Sundar Pichai declared that Google was an AI-first company when he first became CEO of the company in 2015.
For a company that saw the fundamental importance of AI more than six years before the launch of ChatGPT, you would think that AI would be the company’s north star. Therefore, it’s surprising that it has repeatedly found itself forced to play catch-up with where the market was going. Then again, it’s always managed to catch up. Maybe they just recognize that the race is much more than a sprint.
The company reports earnings tonight after the close, and the stock has had a relatively rough go heading into the report with a decline of more than 10% from its peak. Just last week, the stock tried to get back above its 50-DMA, but the Bloomberg story stopped that rally right in its tracks, and now the stock is as directionless as the market’s view of the company’s strategy with respect to the launch of its long-awaited Gemini 3.5 model. In the long run, it’s never paid to bet against Google, and tonight’s earnings report could go a long way in telling investors if that’s still the case.
Start a two-week trial to Bespoke Premium to continue reading today’s full Morning Lineup.
