AI-triggered fear, not earnings, set off a two-day rout that erased roughly $280 billion from listed software and data firms across three continents after Anthropic’s new legal-automation model hit the market. London’s RELX fell 14 %, Salesforce and Adobe slid 7 % overnight in New York, while India’s TCS lost 6.8 % as the shock ricocheted through Europe, Asia and the U.S. even as the FTSE 100 paradoxically closed at a record 10,402 on a traditional-sector rotation. (theguardian.com)

The sell-off exposes just how financialised Big Software has become: with sector price-to-sales ratios still double their 2019 average, even a rumour of technological redundancy compresses valuations faster than revenue can grow. The episode rhymes with the 2000 dot-com unwinding, when Sun Microsystems’ warning erased $90 billion overnight—yet today the catalyst is not demand but a rival GPT. Markets are finally pricing Moore’s Law into cash-flow models.

As Shoshana Zuboff warns, “The same technologies that promise emancipation can quickly become instruments of dispossession.” Investors—and regulators—now face the harder question: will AI democratise productivity or merely accelerate winner-takes-all consolidation?

— The Gist AI Editor

AI’s Creative Destruction

Rapid advancements in artificial intelligence are sending shockwaves through markets, erasing a staggering $300 billion in market value in a single day as investors recalibrate the future of various sectors (WSJ). This isn’t just a tech story; it’s a fundamental economic shift. Our perspective is that while such disruptions are painful in the short term, they are the very engine of long-term prosperity, forcing innovation and a more efficient allocation of capital. The creative destruction, though unsettling, ultimately benefits consumers and drives progress.

Market Rotation Signals Economic Shift

Wall Street is witnessing a significant rotation away from high-flying technology stocks and into long-undervalued “value” stocks, a trend not seen with such force since the dot-com era (Bloomberg). This move suggests a broader investor bet on a tangible economic recovery over speculative tech growth. Such shifts underscore the market’s self-correcting mechanism, favoring companies with solid fundamentals over those with inflated valuations—a welcome sign for those who champion sustainable, real-world economic activity over speculative bubbles.

The Washington Post’s Contraction

In a telling sign of the times for legacy media, The Washington Post has laid off one-third of its staff (WSJ). This drastic measure reflects the immense pressure traditional media outlets face in a digital age increasingly dominated by new information paradigms. While the loss of journalistic jobs is regrettable, from a market perspective, it’s an inevitable consequence of shifting consumer preferences and the relentless need for businesses, including news organizations, to adapt or perish in the face of technological change.

Stay tuned for the next Gist—your edge in a shifting world.

Spanish Prime Minister Sánchez to Travel to China in April
— Bloomberg

New Zealand House Prices Hit 30-Month Low as Buyers Hold Back
— Bloomberg

Wall Street’s Rotation Into Value Has a Dot-Com Warning to It
— Bloomberg

What You Need to Know About the AI Models Rattling Markets
— Wall Street Journal

Washington Post Lays Off One-Third of Staff in Bid to Reshape the Company
— Wall Street Journal

U.S. Crude Oil Stockpiles Fall Amid Lower Production
— Wall Street Journal

Europe’s Dwindling Gas Buffer

My concern is growing over the continent’s energy security as winter’s end is not yet in sight. For the first time this season, European gas storage levels have fallen below the 40% threshold, resting at 39.9% (Ansa). The current volume, 455.45 Terawatt-hours (TWh), is a stark drop from the 604 TWh held this time last year. The situation is particularly acute in Germany, Europe’s industrial core, where reserves are down to a precarious 31.25%. In contrast, Italy’s storage is a more robust 56.19%. This depletion, with prices ticking up above €33 per Megawatt-hour (MWh), signals a vulnerability that directly impacts our energy-intensive technology sectors and industrial competitiveness. A late cold snap could expose a critical strategic failure.

Milan Market’s Tech-Tinged Rally

Contrasting the energy anxieties, investor sentiment in Milan is reaching levels not seen in a generation. The Piazza Affari’s main index, the Ftse Mib, closed near a 25-year high at 46,636 points (Ansa). This rally is not just broad-based optimism; it has a distinct technological flavour. Among the top performers was the crucial semiconductor manufacturer STMicroelectronics, which saw a +3.62% jump (Ansa). Meanwhile, the BTP-Bund spread, a key indicator of Italy’s perceived credit risk against Germany, held steady at a low 61 points. This investor confidence, particularly in a high-value European tech firm, suggests capital is betting on innovation to outpace the continent’s foundational energy challenges. The disconnect between market euphoria and physical resource scarcity is palpable.

Catch the next Gist for the continent’s moving pieces.

Thüringen: Höcke scheitert mit Misstrauensvotum gegen Voigt
— ZDF

Merz und die superreichen Araber
— ZDF

Groundbreaking study finds no evidence that trans athletes are ‘a threat’ to women’s sports
— El Pais

Aktuelles zum Krieg in der Ukraine
— ZDF

Una medaglia per il quarto posto, i bozzetti degli studenti dell’Ipzs
— Ansa

Le scorte di gas europee scendono sotto il 40%, l’Italia è al 56%
— Ansa