James Brodie
Head of Learning & Development, Flux
AI CapEx Booms, BofA Bull/Bear Indicator Hits 9.5, Upcoming Data
AI CapEx surges toward 3% of GDP, gold reserves rise, BofA flashes sell signal, US labour weakens ahead of key data.
AI CapEx from Alphabet, Amazon, Meta, Microsoft, and Oracle is set to hit ~2.5% of US GDP in 2026 (up from 1.5% in 2025), nearing defense spending (~2.7%).
By 2027, it's projected to reach ~3.2% of GDP - surpassing defense spending for the first time ever. Combined CapEx: $800B in 2026, rising to $1.1T in 2027.
Gold Reserves
Central banks now hold ~25% of reserves in gold, up from a 10% low (2015–2020). Still well below historical norms - 40–60% (1970–90), ~80% before that, and near 100% under the gold standard. With rising debt, currency debasement, and de-dollarization trends, 25% looks low by comparison.
EV Sales
No European EV model made the global top 20 sales list.
Sentiment Signal
BofA Bull/Bear Indicator hit 9.5 - a contrarian sell signal (1–3 month horizon), flagging short-term equity risk despite strong flows
Labor Market
US construction hiring rate fell to 3.5% in May (-0.3pp), the lowest since records began in 2000.
This Week's Calendar
- Mon: June Services PMI
- Tue: ADP Employment
- Wed: Fed Minutes
- Thu: Jobless Claims, June Existing Home Sales, Cad employment
- Fri: IEA Monthly Report
- Earnings season starts next week
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