AI Fear Drives Rout & Goldman Lawyer Quits Over Epstein Ties | Daybreak Europe 02/13/2026
Speakers
Summary
- The "AI Scare Trade" has evolved from a general boom to a sector-specific dismantling of trust. Investors are aggressively rotating out of industries perceived as vulnerable to AI disruption (Software, Wealth Management, and now Logistics) and crowding into AI Hardware (Upstream Tech).
- Global bond markets are at a tipping point ahead of US CPI. A "bad news is bad news" regime is forming for equities, where soft data fuels bond rallies but signals recession risk for stocks.
- European luxury continues to struggle with the China slowdown, evidenced by L'Oreal's miss, while defense spending in Europe is ramping up ($35B pledged to Ukraine) amidst doubts about US reliability.
- Invesco notes that technicals in Investment Grade credit are turning; the market is heavy with supply, and investors are "selling first, asking questions later" regarding credits exposed to AI disruption risks.
Trade Ideas
"Japanese Yen... headed for its strongest week since 2024... concerns continue to ease around fiscal year policy." As the "AI Scare" drives risk-off sentiment globally, the Yen is reclaiming its status as a safe haven. Coupled with easing fiscal concerns in Japan, the currency is strengthening against the dollar. LONG. The BOJ maintains an ultra-loose policy that disappoints hawkish expectations.
Mark Cranfield
Cross Asset Strategist, Bloomberg
"Gradually, we moved into a situation where anything with AI software seemed to be at risk... sticking to the AI hardware makers, the big guys like Taiwan Semiconductor, Samsung." Cranfield notes "Logistics" is the latest sector to sell off due to fears AI will "dismantle some of the workforce." The market is bifurcating the AI theme. It is no longer a rising tide lifting all boats. The trade is now a pair: Long the "Pick and Shovel" hardware providers (TSM, SAMSUNG, AMAT - the latter mentioned in headlines as surging) while Shorting the "Disrupted" sectors where AI replaces labor or reduces pricing power (Logistics like UPS/FDX and generic AI SOFTWARE). LONG Hardware / SHORT Disrupted Sectors (Logistics/Software). A broader tech selloff drags down hardware despite the structural demand; AI disruption fears in logistics prove overblown in the short term.
Alexandra Ivanova
Fund Manager, IFI Europe Team at Invesco
"J.P. Morgan strategists recommending 2-year Treasuries as a tactical trade... I actually agree." She also notes that "technicals that have been so strong [in credit] are starting to turn." With economic data softening and the "AI Scare" driving risk-off sentiment, the front end of the curve (2-Year) offers protection. Ivanova suggests the market is pricing in perfection for rate cuts, but the 2-year is the safer spot compared to the volatile long end or crowded corporate credit. LONG. A hot CPI print forces the Fed to hold rates higher for longer, damaging the short-end trade.
Up Next
This Bloomberg Markets video, published February 13, 2026, features Winnie Hsu, Mark Cranfield, Alexandra Ivanova discussing JPY, UPS, FDX, TLT. 3 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Winnie Hsu, Mark Cranfield, Alexandra Ivanova · Tickers: JPY, UPS, FDX, TLT