A few things of importance

This story out there that Microsoft is canceling AI data center leases according to a Cowen report gives me more reason to believe that a stock market regime change is upon us where the AI trade no longer dominates and the DeepSeek news was a game changer in terms of the global view of it. And maybe the users (like all of us) of generative AI now become more of a focus as businesses integrate it into their businesses to the extent that they can right now as it is still very early. That said, as heard from other hyperscalers, there is still an enormous amount of spend going on. Watch now too the data center REITs and every private equity real estate fund that has gotten into this space even though technology changes fast compared to other areas of CRE.

With respect to the German elections, I don't believe the results, all down the line, were any surprise and the new Chancelor Friedrich Merz still has the challenge of forming a new coalition government without the AfD as he's said. Whenever one is formed, we'll see whether there are changes to the 'debt brake' policy and to what extent which has limited its debt to GDP ratio and how much defense spending ramps up. Either way, we have a new center right government in Germany at the same time the European region as a whole has realized that they've suffocated themselves with too much regulation/bureaucracy/red tape with so many things. Germany also needs to turn its nuclear plants back on because their electricity costs are just too high and not sustainable if they want to better compete with the rest of the world.

The DAX is up .8% today in response and 13% year to date. Interestingly too, the mid cap MDAX index is jumping by 2.5% and by 10% year to date. German bund yields are slightly higher as we watch what will come of that 'debt brake' easing and defense spending possibilities. The euro is little changed but it looks like on the chart that it is carving out a reverse head and shoulders pattern which is bullish for it if realized.