Fiona Cincotta, senior analyst from City Index, says worries around Nvidia's circular financing are here to stay as they announced a $2 billion investment in Synopsys. She speaks with Caroline Hyde and Ed Ludlow on "Bloomberg Tech."

California

Nvidia has come under market pressure due to concerns about circular financing, where the company invests in firms that are or will become major customers. This has raised questions about the fragility of such financial ecosystems, especially as broader markets experience volatility from shifting global monetary policies, including a more hawkish stance from the Bank of Japan.

The tech and crypto sectors, both sensitive to liquidity, have seen risk-off sentiment as investors worry about the potential unwinding of the yen carry trade and reduced liquidity. Despite recent strong earnings from Nvidia and optimism about AI's long-term potential, institutional demand for crypto remains weak, with significant outflows from ETFs reported.

Circular financing worries surround Nvidia

It is the first day of December and actually a couple of hours ago we started things looking pretty bleak and video is turned a corner which has kind of changed a little bit the tone. But basically tech lower crypto lower. We started December and risk off mode. Why. Yeah I mean we had a really solid rally last week. You know on those expectations that the Federal Reserve will be cutting interest rates in December. But as we start off this new week there's been a turnaround in that sentiment. I think the catalyst for that for me came from Japan. So we had Bank of Japan Governor Ueda adopting a more hawkish tone really ramping up sort of expectations for a December rate hike. Now what does this mean and why is it important. Basically there are concerns now that we might see the unwinding of the carry trade. So that's when we sort of have institutions investors borrowing in the low interest yen in order to invest in higher yielding riskier assets. Now if we're seeing the Bank of Japan raise interest rates we've got yields in Japan 10 year yields at 17 year high. There is this concern that we're going to start to see the repatriation of those funds back to Japan. Now this is important because liquidity changes and those sort of sectors of the market such as crypto such as tech which are really sensitive to liquidity are where we're seeing that sort of risk off come through. December historically strong particularly for technology. Right. And when I was on vacation last week what a week to pick. We had the Thanksgiving holiday. Circular financing was a factor in video in particular weighing on the index level. You just heard the reporting about how the synopsis and video deal is not circular financing to the mind of the leaders of those companies. Do you buy it. And how big a factor is that in this market right now. Really good question. I mean this is front and central I think in a lot of investors minds at the moment particularly as soon as we hear the name and video and video has been investing in firms that you know are or will be major customers of its products. So you know that has raised concerns within sort of the markets. And we've seen that play out in previous weeks where Nvidia really has come under a lot of pressure. It does feel like that that is sort of starting to turn a little bit of a corner. Obviously those comments today I think will help a little bit to ease those concerns. But at the end of the day there is this sort of worries surrounding circular financing and they're not going to disappear overnight. And that's because circular financing makes an ecosystem fragile. You know it just takes one disappointment for for the whole loop to fall apart. So I think it is right that the market does question and question whether this circular financing could be a problem. Meanwhile Fiona you could think that these are companies that are strategically thinking of how they can ride extra upside should the A.I. wins really come to bear. We're going to be digging into how opening eyes backing a fund of its own VC partner that is looking at integrating its technology into portfolio companies into service companies for example. It wins not only by adoption of its technology but on seeing some equity upside. Fiona it's what do you need to see to vindicate that the productivity gains are there. Yeah. This is why it's so difficult because I think sometimes or often if you're in that bubble and it's falling apart you won't often realize when it's actually too late. So you know I think the numbers that we've been seeing from Nvidia have been encouraging. You know the latest reports earnings report was was extremely positive. There weren't really any faults there. I think this is just a nervousness that we're saying. But I think at the end of the day we know that A.I. technology is solid. We know that it exists. It's going to increase productivity. There are obviously concerns over monetization and circular funding revenue lagging investment. But I think you know longer term this technology does have a broad use. And I think that's why over the longer term this trade is still one that has upside. You know if we just think about the horizontally or to my automation R&D customer service vertically different sectors and then infrastructure level as well. So this is a very broad broad technology which which sort of helps ease those concerns over the bubble phase I guess. What about crypto. Crypto. I mean what. Every every every Monday I feel I wake up and something else is happening in crypto. You know we saw that rejection at that ninety two thou just above that ninety two thousand level which was a pretty key level. And I think again this is that unwinding or fears over the unwinding of the yen carry trade. Crypto is very sensitive to liquidity and that fear that there might be a slight reduction in liquidity. If that unwinding of the carry trade happens is what I see pulling on crypto institutional demand is still very weak. You know we saw November ETFs. They saw outflows of three point four eight billion. So huge outflows. I think the second largest second worst month that we've seen so far. That really does need to turn around before we can expect to see any sort of recovery or solid recovery in the Bitcoin price or crypto prices.

The White House confirmed it authorized a second airstrike on an alleged Venezuelan drug boat in September, but denied it ordered everyone on board be killed, which would be considered a war crime.

Washington

U.S. authorization of second strike of Venezuelan ship questioned

Monday is World AIDS Day. It has been recognized globally since 1988, but this year, the U.S. government is not commemorating it for the first time.

U.S. not recognizing World AIDS Day this year

Operation "Swamp Sweep," a monthslong immigration crackdown centered in New Orleans, is set to begin Monday. CBS News national reporter Kati Weis has the details.

New Orleans

Immigration enforcement operation set to begin in New Orleans

Luigi Mangione, the man charged with murdering UnitedHealthcare CEO Brian Thompson, was in a New York City courtroom on Monday for a pre-trial hearing focused on what evidence the jury will see. CBS News' Anna Schecter has the details.

New York

Luigi Mangione's lawyers seek to toss evidence in state murder case

West Virginia Gov. Patrick Morrisey said Monday that Andrew Wolfe, the second National Guardsman shot in Washington, D.C., last week, has woken up from an induced coma.

National Guardsman injured in shooting has woken up from coma

Lawmakers are questioning the massive mobilization in the Caribbean as President Trump announced airlines and pilots should consider "the airspace above and surrounding Venezuela to be closed in its entirety." It comes amid new controversy over the strikes on suspected Venezuelan drug boats that has some lawmakers raising questions over whether the Pentagon committed a war crime.

Caracas

Pentagon 'may have' committed war crime amid questions over drug boats

Steve Witkoff, one of President Trump's key envoys helping negotiate a peace proposal between Russia and Ukraine, is set to meet with President Vladimir Putin in Moscow, the Kremlin says. CBS News' Ramy Inocencio reports.

Moscow

Trump envoy set to meet with Putin in Moscow, Russia confirms

Russian missiles and drones continue to hit Ukrainian cities even as U.S. negotiators try to broker a deal between the two countries. Some Ukrainians have expressed anger over President Trump's original peace plan put forward last month, saying it does not guarantee their safety.

Kyiv

Ukraine Invasion

Ukrainians express anger over Trump peace proposal as strikes continue

Luigi Mangione, the man accused of killing UnitedHealthcare CEO Brian Thompson last December, is set to appear in court for hearings on evidence for his upcoming trial. CBS News' Katrina Kaufman reports.

Luigi Mangione headed to court on what evidence should be allowed

Thousands rallied outside President Isaac Herzog’s residence in Tel Aviv, urging him to reject a pardon request from Prime Minister Benjamin Netanyahu, who faces fraud charges. Demonstrators held signs demanding accountability and warned that approval could undermine justice in Israel.

Tel Aviv-Yafo

Protests in Tel Aviv after Netanyahu seeks pardon in fraud cases

The Ukrainian delegation met with U.S. officials in Miami on Sunday ahead of scheduled talks between the U.S. and Russian officials, including Vladimir Putin, later this week.

Miami

Rubio calls U.S.-Ukraine talks productive but says more work ahead

Israeli Prime Minister Benjamin Netanyahu submitted a formal pardon request in his long-running corruption cases to the Israeli president. Herzog says he will "sincerely consider the request."

Netanyahu asks president to grant him pardon from corruption charges

Two men and two women from the Paris region have been taken into custody in connection with the theft at the Louvre last month, prosecutors said.

Paris

Four more suspects arrested over Louvre jewelery heist

Entire areas of Sri Lanka's capital were flooded on Sunday after a powerful cyclone triggered heavy rains and mudslides across the island, with authorities reporting nearly 200 dead and dozens more missing.

Colombo

Sri Lanka reels from Cyclone Ditwah as death toll nears 200

Top Trump administration officials are meeting Ukrainian negotiators in Florida this weekend, pushing to broker an end to Russia's war in Ukraine.

Florida

Rubio and Witkoff to meet with Ukraine's negotiators in Florida

President Trump intensified his pressure campaign on Venezuela on Saturday. He posted that the airspace around the country is "closed in its entirety." It comes amid growing pressure on Venezuelan leader Nicolás Maduro to step down.

Trump declares Venezuela's airspace closed

Negotiators for Ukraine are headed to Florida for further peace talks with Trump administration officials. The visit comes amid new deadly air assaults across Ukraine.

Deadly Russian air assaults hit Ukraine amid peace talks

Approximately 24 million people across the U.S. are under winter storm alerts. Dave Malkoff and Andrew Kozak have the details on this holiday weekend's forecast and the impact.

Chicago

Major storm blasts Midwest, impacting holiday travel

Ukraine’s security services say that domestically made naval drones struck two Russian oil tankers in the Black Sea, involving vessels described as part of Russia’s “shadow fleet.”

Ukraine strikes Russian oil tankers in the Black Sea

From Rome to Berlin, from São Paulo to Istanbul: the demonstration in the Italian capital, led by Global Movement to Gaza, reflects a global protest for Gaza, with thousands of people united in solidarity and justice

Rome

Thunberg joins pro-Palestine march in Rome

US President Donald Trump has said the airspace above Venezuela is to be closed. With a US task force already in the Caribbean, land operations against suspected Venezuelan drug traffickers could soon begin.

US military threat fuels fear and uncertainty in Venezuela

More than 150 people have been killed as Cyclone Ditwah has been battering Sri Lanka with torrential rains that triggered flooding and landslides. Authorities declared a state of emergency.

Cyclone Ditwah pounds Sri Lanka with deadly force

Investigators in Hong Kong are gathering evidence at the site of the apartment block fire that killed at least 128 people. At least 150 are missing, and 11 people involved in the renovation of the complex have been arrested.

Tsim Sha Tsui

Hong Kong apartment fire survivors share how they escaped

United States President Donald Trump has said the airspace above and surrounding Venezuela is to be closed “in its entirety”, as tensions between the countries escalate. There was no immediate response by Venezuela to Trump’s social media post on Saturday.

Trump says Venezuela airspace to be shut as tensions rise

Pope Leo XIV visited Istanbul's historic Blue Mosque, officially known as the Sultan Ahmed Mosque, as part of his trip to Turkey.

Istanbul

Pope Leo XIV visits Istanbul's iconic Blue Mosque on Turkey trip

The Afghan man accused of shooting two National Guard members will face first-degree murder charges for an attack that prompted President Donald Trump to declare he would freeze migration from "Third World Countries" to the U.S.

National Guard shooting suspect to face murder charges

President Trump announced Thursday that he would "permanently pause" immigration from "Third-World Countries." The declaration comes as the Trump administration takes aim at U.S. immigration policies in the wake of the shooting of two National Guard members in Washington, D.C.

Trump says he plans to end immigration from "Third-World Countries"

Europe's Airbus says it is ordering immediate repairs to 6,000 of its widely-used A320 family of jets in a sweeping recall affecting more than half the global fleet, threatening upheaval during the busiest travel weekend of the year in the United States.

Leiden

Airbus issues major A320 recall, threatening holiday travel

Hong Kong firefighters found dozens more bodies in an intensive search of a high-rise complex where a massive fire engulfed seven buildings, bringing the death toll to 128 with many more unaccounted for. Authorities arrested another eight people involved in the towers' renovation.

Hong Kong Island

More arrests made in Hong Kong as fire's death toll rises to 128

Ukrainian President Volodymyr Zelenskiy's powerful chief of staff, a close ally of the president who has headed Ukraine's negotiation team at fraught U.S.-backed peace talks, quit on Friday (November 28), after anti-corruption agents searched his home.

Breakdown