A Capital Revolution: From AI to EM

Falling bond yields and the value rotation reflect AI-capex demand expectations, not inflation, says Siegel, as Eternal Capital turns short China.

• Value-growth rotation: Russell Value and S&P BARRA Value hit all-time highs amid a sharp NASDAQ selloff, a pattern Siegel compares to the dot-com unwind where Value rose 10-20% while NASDAQ fell ~60% post-March 2000 peak.
• AI debt drives rates: Siegel argues the 10-year yield dropping below 5% is almost entirely AI capex/growth expectations, not inflation or deficits, making bonds and value stocks a hedge against an AI slowdown.

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