Japan, China return amid tech & trade woes | The Asia Trade 2/24/2026
Speakers
Summary
- AI "Scare Trade" Emerges: A sharp pivot in sentiment is occurring where AI is viewed as a deflationary disruptor rather than just a productivity booster. The release of Anthropic's "Claude Code" (capable of modernizing legacy COBOL systems) triggered a massive sell-off in legacy tech services (IBM) and gig-economy/payment stocks, fearing rapid obsolescence of their moats.
- Tariff Confusion: The US Supreme Court struck down reciprocal tariffs, forcing the Trump administration to pivot to "National Security" justifications (Section 232). This creates a narrower, slower, but potentially stickier tariff regime targeting industrial goods (batteries, grid tech) rather than broad consumer goods.
- Asia Rotation: With US markets jittery over AI disruption and trade policy, capital is flowing back into Asia. China's reopening after the Lunar New Year shows strength (MSCI China up 8% during the break), driven by valuation gaps and a debasing US Dollar.
- Geopolitics: Gold remains the primary hedge against US-Iran tensions and trade uncertainty, as oil markets remain surprisingly range-bound ("boring") due to ample supply.
Trade Ideas
Despite rising US-Iran tensions and a military buildup, oil prices are "boring" and steady. However, Gold continues to gain, marking a run of weekly wins. The market is treating Oil as a supply/demand story (which is bearish due to ample supply) but treating Gold as the true geopolitical and monetary hedge. With the US Dollar weakening and trade policy in chaos (Supreme Court rulings vs. Trump), Gold is the only clean "uncertainty" hedge. LONG. Gold is decoupling from traditional rate correlations and trading on pure uncertainty. A sudden diplomatic resolution with Iran or a sharp spike in the USD.
IBM stock tumbled 13% (worst day since 2000) after Anthropic announced "Claude Code," a tool that can modernize COBOL programming language (used by 90% of Fortune 500s) instantly. Payment and gig firms (Amex, DoorDash) also sold off sharply. IBM's "mainframe maintenance" moat relies on the scarcity of COBOL experts and the difficulty of migration. If AI can automate this migration, IBM's consulting revenue collapses. Similarly, AI agents threaten the business models of intermediaries like DoorDash and Uber. This is the "AI Scare Trade"—selling companies whose services are easily replicated by AI. SHORT. The market is repricing "legacy moats" that are actually vulnerabilities in an AI-native world. AI tools may prove less reliable in enterprise environments than advertised, leading to a reversion trade.
MSCI China gained 8% while mainland markets were closed for Lunar New Year. Hao Hong notes retail sales grew ~8% and capital is flowing back to Hong Kong due to USD depreciation. The "Reciprocal Tariff" threat was struck down by the Supreme Court, implying the effective tariff rate on China might be lower (or delayed) compared to the worst-case scenario. Combined with low valuations and a "catch-up" trade post-holiday, Chinese equities (specifically Tech and Robotics) are positioned for inflows as investors rotate out of expensive US Tech. LONG. Focus on "National Champions" and Robotics/AI hardware in China. Trump's pivot to "National Security" tariffs could specifically target Chinese industrial tech (batteries/EVs) later.
The guest notes that while AI *software* stocks are volatile, the demand for energy to power AI is "not going to change." This is a classic "Picks and Shovels" play. Regardless of whether IBM or Anthropic wins the software war, the data centers require massive power. The lack of historical investment in the grid makes this a supply-constrained bull market. LONG. Focus on grid tech and energy providers. New "National Security" tariffs mentioned by Laura Davison could target imported power grid equipment, potentially raising costs for installers.
Sony's CEO explicitly stated that banks have limited risk appetite for expansion, making Private Equity and Private Credit central to their dealmaking strategy. Japanese corporates are historically conservative. A major CEO publicly embracing Private Credit signals a structural shift in Japan's capital markets. This implies a boom for private credit firms operating in Asia as conglomerates seek to deploy capital for M&A. LONG. Buy Private Credit managers with exposure to Asian corporate deal flow. Rising interest rates in Japan (BOJ policy shift) could increase the cost of leverage.
Nassim Nicholas Taleb
Author, "The Black Swan" (Clip)
Taleb warns of "sliding volatility" and potential bankruptcies in the software sector. He notes that pioneers (like car companies in the early 20th century) are often not the winners. The current AI rally has been driven by a few names (Mag-7). As AI democratizes coding and software creation (as seen with the Anthropic/IBM news), the pricing power of generic SaaS companies collapses. We are entering the "fragile" phase of the AI bubble where profitability matters. SHORT. Avoid generic, high-valuation SaaS stocks that lack a hardware or data moat. The "AI Bubble" may last longer than rational analysis suggests due to liquidity.
Up Next
This Bloomberg Markets video, published February 24, 2026, features Stephen Stapczynski, Annabel Droulers, Hao Hong, Global Wealth MD, Kenichiro Yoshida, Nassim Nicholas Taleb discussing GOLD, IBM, DASH, UBER, AXP, FXI, EWH, ROBO, XLE, BKLN, SONY, IGV. 6 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Stephen Stapczynski, Annabel Droulers, Hao Hong, Global Wealth MD, Kenichiro Yoshida, Nassim Nicholas Taleb · Tickers: GOLD, IBM, DASH, UBER, AXP, FXI, EWH, ROBO, XLE, BKLN, SONY, IGV