MARKET CALL: Nothing To Fear But Overvaluation & A Shutdown

The financial markets have become jittery lately due to concerns about high valuation multiples, particularly among AI stocks, and a potential government shutdown. President Donald Trump reportedly will meet with the top four congressional leaders at the White House on Monday as the threat of a government shutdown on October 1 looms.

Meanwhile, investors are once again wondering whether the massive spending on AI infrastructure by the "hyperscalers" will ever pay off. It's a reasonable concern, as AI is an application that generates increased demand for data processing and storage to infinity and beyond. If so, that will require lots of capital spending to infinity and beyond. Alternatively, the novelty of AI might wear off once everyone has had a chance to discover its applications or to abandon its usefulness. That might leave hyperscalers with excessive data center capacity.