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BCA Research warns the AI boom's massive capital expenditure may require $10 trillion in annual revenue to be justified 🔗. Chief Economist Peter Berezin highlights severe long-term monetization hurdles and overvalued corporate profit margins, suggesting market enthusiasm is masking underlying risks 🔗. Investors should scrutinize AI valuations amid these concerns.

The Federal Reserve raised interest rates for the first time since July 2023, causing an initial dip in the S&P 500. The move comes as inflation persists above the 2% target, driven by rising oil prices and increasing memory costs due to AI demand 🔗. Despite higher prices, Fed Chairman Kevin Warsh noted the economy's strength and robust labor markets, indicating confidence in handling the hike without recession. Investors are warned that lower consumer spending due to inflation could impact corporate sales 🔗.

US consumer sentiment remains depressed, with the University of Michigan index falling 13% YoY and 8% MoM in September 🔗. Goldman Sachs suggests the persistent disconnect between sentiment and a solid economy is driven by a broader decline in 'happiness' rather than purely economic factors 🔗. This indicates a more fundamental societal pessimism, potentially influencing future consumer behavior despite strong GDP or market performance 🔗.

Paramount and states seeking to block its $110 billion acquisition of Warner Bros. are reportedly nearing a settlement. Discussions include independent content monitoring for CNN and commitments on theatrical releases. A settlement could be reached as soon as this weekend, potentially allowing Paramount to avoid significant fees. Paramount shares rose nearly 7% and Warner Bros Discovery shares were up 8.4% in after-market trading on the news 🔗.

This development is a critical step for Paramount's ambition to rival Netflix and Disney, and could remove a major regulatory hurdle for the media giant.

Eli Lilly (LLY) has received full FDA approval for its Inluriyo (imlunestrant) and Verzenio (abemaciclib) combination therapy for ESR1-mutated, ER-positive, HER2-negative metastatic breast cancer 🔗.

Key details:

• Approved for patients whose disease progressed after at least one line of endocrine therapy.
• Based on Phase 3 EMBER-3 trial, the combo doubled median progression-free survival to 11.1 months vs. 5.5 months for Inluriyo alone (HR 0.53).
• This marks Inluriyo's second FDA approval in less than a year, expanding its market potential.
• The combination targets two drivers of tumor growth, offering a new treatment option.

Federal Reserve Chairman Kevin Warsh described the recent rate hike as merely removing 'a dose of accommodation,' rather than a policy tightening 🔗. This phrasing, repeated multiple times, suggests a deliberate shift from previous Fed communication and could signal a more open-ended approach to future rate increases 🔗.

Key implications:

• Hawkish Signal: Markets are interpreting this as a hawkish stance, implying the Fed may be prepared for more hikes than previously anticipated.
• Policy Framework Shift: Moves away from calibrating policy relative to a neutral rate, potentially indicating a willingness to push rates higher to control inflation 🔗.

Volkswagen AG (ETR:VOW) shares dropped 7.5% after the automaker significantly cut its fiscal year 2026 operating return on sales guidance to up to 1%, down from a previous forecast of 4% to 5.5% 🔗.

Key factors cited for the reduced outlook include:

• A €6 billion non-cash goodwill impairment related to Porsche AG.
• A challenging market environment, particularly in China.
• Additional restructuring expenses and asset impairments in China, totaling around €2 billion in H2 2026.

The company now expects group sales revenue of around €315 billion, maintaining its net cash flow guidance 🔗.

Legendary investor Warren Buffett, 96, has stepped down as Chairman of Berkshire Hathaway (BRK.A, BRK.B), effective immediately. His son, Howard Buffett, will succeed him as Chairman, while Buffett will remain a director and Greg Abel continues as CEO. This marks a significant leadership transition for the $1 trillion conglomerate, with Buffett stating, 'Father Time always wins.' 🔗

Legendary investor Warren Buffett, 96, has stepped down as Chairman of Berkshire Hathaway (BRK.A, BRK.B), effective immediately. His son, Howard Buffett, will succeed him as chairman, while Greg Abel remains CEO. Buffett will continue as a director. This marks a significant leadership transition for the $1 trillion conglomerate, with Howard Buffett tasked with guarding the company's culture and values 🔗.

Key points:

• Warren Buffett transitions to Chairman Emeritus.
• Howard Buffett appointed Chairman, fulfilling a long-standing succession plan.
• Greg Abel continues as CEO, managing operations.
• Buffett's tenure saw BRK.A achieve a 19.7% compounded annual return 🔗.

Tigress Financial Partners has raised its price target on Alphabet (GOOGL) to $485 from $415, maintaining a Strong Buy rating. The firm cites Alphabet's AI leadership as a key driver for growth across its Search, Cloud, and YouTube businesses 🔗.

Key points:

• AI investments are expanding Search capabilities and strengthening advertising performance.
• Google Cloud and AI platforms (Gemini, TPUs) are creating new monetization channels.
• Strong Q2 results showed Search momentum, rising Cloud growth, and margin expansion.
• The company's revenue surged 20% over the last twelve months to $445.87 billion 🔗.