Investor concerns about rising capital costs and debt servicing in the AI sector may pale in comparison to losses from a reported US$6.3 billion cryptocurrency heist at the world’s largest exchange. 

Unlike a traditional bank robbery, the 20-minute theft involved no guns or physical injuries, although digital wallets took quite a beating. All the more reason to hold hard assets like gold.

In the Weekly Market Digest, ahead of the November 4 US midterm elections, technology stocks came under pressure as investors questioned the rising costs of AI, including energy, debt servicing, and SLTO challenges associated with data centers, all of which threaten free cash flow generation. 

The principal macroeconomic event was the FOMC’s 10-2 decision to hold benchmark interest rates steady, which drove real yields lower. However, persistent inflation concerns, partly driven by higher oil prices, kept expectations of a 25-basis-point rate hike before year-end ‘alive and kicking’. The US dollar remained flat, while precious metals and their equity benchmarks weakened. Copper held up relatively better, as did base metal equities. 

The Exploration Insights portfolio declined broadly in line with precious metal equity benchmarks but underperformed base metal ETFs. 

In Stock Talk, the main topic is my site visit to Brazil to visit an advanced PGM-nickel project, but I also cover updates from a precious metal developer in southern Chile, a prospect generator in northern Québec, and a grassroots copper explorer in Perú. I will defer other news until next week.