Trading update : 27 February 2026

The global market is currently navigating a high-stakes rebalancing as a staggering $646 billion AI capex boom clashes with “GFC 2.0” warnings from industry titans like Jamie Dimon. While massive foreign inflows bolstered US assets in 2025, the tide is turning, with the “Mag 7” are faltering while active managers and European indices hit record highs, signalling the broadest market participation in decades.

Peak US equities

According to data released by the Treasury Department, purchases by foreign investors of US financial assets accelerated in 2025, led by demand for stocks and US Treasuries. Bloomberg reports that overseas investors poured $658.5 billion into equities. Europe accounted for $872.8 billion of the net influx of money to long-term financial assets while China was a notable net seller of US long-term financial assets, selling $208.6 billion.

GFC 2.0?

When asked about fierce competition across the financial industry, JPMorgan Chase & Co. CEO Jamie Dimon said he’s starting to see parallels to the era before the 2008 financial crisis, when a rush to make loans ended disastrously. Quoted in Bloomberg, Dimon said: “Unfortunately, we did see this in ’05, ’06 and ’07, almost the same thing — the rising tide was lifting all boats, everyone was making a lot of money.” While JPMorgan isn’t willing to make riskier loans to boost net interest income, he said, “I see a couple of people doing some dumb things … to create NII (net interest income).”

 AI contagion

In a continuation of the AI scare selloff, delivery, payments, and software stocks slid sharply after Citrini Research published a report on the potential risks the technology poses for various sectors. Bloomberg reports that analysts, strategists, and investors have warned that many reactions to the report are exaggerated and are likely overestimating any AI-related risks at this point.

Software bear

Black Swan author Nassim Taleb has warned investors to brace for escalating volatility and potential bankruptcies in the software sector as the AI-driven rally enters a more fragile phase. Quoted by Bloomberg, Taleb says the markets are underpricing structural risks while overestimating the durability of today’s AI leaders, and that bankruptcies in parts of the software space are likely.

Buyer interest

PayPal Holdings Inc. (PYPL-NASQ) is attracting takeover interest from potential buyers after a stock slide wiped out almost half of its value. However, buyer interest in PayPal is still at a preliminary stage and may not lead to a transaction, according to Bloomberg.

AI capex by the numbers

According to data released by Apollo, hyperscaler capex is expected in 2026 to be at approximately $646 billion, or about 2% of US GDP and roughly equivalent to the size of GDP for Singapore, Sweden and Argentina. For comparison, annual growth in consumer spending is currently around $1 trillion, and total US bank loan growth in 2025 was around $700 billion.

Transatlantic moves

Europe’s blue-chip Stoxx Europe 600 index and indices in the UK, France and Spain punched through a series of record highs in February. European bourses have benefited from the desire among big investors to diversify away from the US market and its massive technology sector, which has been buffeted this year by concerns over a potential AI bubble.

Active investing

More than half of large-cap mutual funds (also known as unit trusts) are outperforming their benchmark index so far this year. According to analysts at Goldman Sachs, this is the highest level in almost two decades.

Active funds have tended to lag passive trackers in recent years due to the relentless gains for tech mega caps with a high concentration within the index. However, the Financial Times reports that more than 60% of stocks on the S&P 500 (VOO-NASQ) have outperformed the index as a whole so far this year – the broadest range in decades.

The Magnificent 7 tech stocks that dominate the market-cap weighted index have fallen 5.6% since the start of January, while seven of the S&P 500’s 11 sectors have risen.

Weighing in

According to the Q4 2025 ASISA general unit trust survey, domestic fund managers were, on average, most underweight (relative to the Capped SWIX index) in the following sectors: Mining, Real Estate, Telecoms, Insurance, and Technology. Discretionary Retail was the most overweight sector, followed by Industrials, Beverages, Banks, and Food Producers.

Gold rush

Gold miners are set to take a greater share of the FTSE/JSE Top 40 (FNBT40-JSE) index after the bourse’s quarterly review in March, representing an eighth of the index. Mid-tier gold miner Pan African Resources (PAN-JSE) is on course to break into the top 40 largest companies listed on the JSE after a 1,000% surge in the group’s market value over the past three years on high gold prices.

Business Day reports that a broader precious metal price run in the past six months has seen most mining giants recovering their position in the index after platinum group metals (PGM) prices also surged, with 13 of the 40 biggest companies now in the mining sector.

Stock focus: Dis-Chem

In its 2H trading update, Dis-Chem’s latest figures show the pharmacy giant is in good health, with overall revenue climbing 10.1%, beating analyst expectations. The most encouraging sign isn’t just the higher sales, but how consumers are shopping. The pharmacy chain is moving 5.0% more physical products rather than just relying on price hikes.

This growth is largely due to their Better Rewards program and their partnership with Capitec, which is helping them secure a greater market share from competitors. While retail stores grew a solid 9.5%, the wholesale division (selling to other pharmacies) stole the show with a massive 15.7% jump.

Even though Dis-Chem’s stock price has been dragged down recently due to the struggles of the entire retail sector, this update suggests that the company itself is firing on all cylinders.