The Economist (October 21)
“Two spectres stalk financial markets. One is the fear that surging bond yields will make the rich world’s shaky public finances unsustainable, triggering a nasty fiscal crisis. The other is the worry that the revenues from artificial intelligence needed to keep the data-centre boom going will fail to arrive.” On the upside, it’s unlikely to be both. “If AI stocks collapse, bond yields will fall.”
Tags: AI, Bond yields, Boom, Data centers, Fear, Financial markets, Fiscal crisis, Public finances, Revenues, Rich world, Shaky, Stalk, Stocks, Surging, Triggering, Unsustainable
Wall Street Journal (October 16)
“It’s too soon to call what happened this week to artificial intelligence stocks a correction. Call it instead a reminder: Hype about new technologies is an inevitable human temptation, and sometimes it pays off, but eventually investors demand returns on capital.”
Tags: Artificial intelligence, Correction, Human temptation, Hype, Inevitable, Investors, Pays off, Reminder, Returns on capital, Stocks, Technologies
Barron’s (September 14)
“AI stocks aren’t alone when it comes to being sensitive to interest rates; equities in general tend to be reactive” and they also averse to the “potential chilling effect on demand” of higher rates. Though expectations are that “the Fed will raise rates when the FOMC announces its monetary policy decision,” the resilience of the economy this year provides “a hopeful thought for anyone dreading a rate hike.”
Tags: AI, Averse, Chilling effect, Demand, Dreading, Economy, Equities, Expectations, Fed, FOMC, Hike, Interest rates, Monetary policy, Reactive, Resilience, Sensitive, Stocks
The Economist (August 19)
“Bond markets are unnerving rich-world politicians. As stocks rise ever higher, yields have been climbing ominously.” Deutsche Bank analysts believe the U.S. Treasury’s latest move indicates “increasing administration unease” as the Treasury has announced plans to “increase its own purchases of longer-dated debt” from next month. “Bond markets are unsettled, and so, in turn, is America’s government.”
Tags: Analysts, Bond markets, Deutsche Bank, Government, Longer-dated debt, Ominously, Rich-world politicians, Stocks, Treasury, U.S., Unease, Unnerving, Unsettled, Yields
MarketWatch (July 30)
“One of the wildest months in recent memory for the U.S. stock market is ending on yet another remarkable note: A highflying hedge fund run by an AI wunderkind in his mid-20s has apparently just been carried out on a stretcher.” Before offloading “the bulk of its public-equity portfolio after suffering heavy losses over the past month,” Situational Awareness “had posted dazzling returns by using leverage to bet on AI-related stocks, reportedly tallying a more than 2,000% gain since its launch in September 2024.”
Tags: AI, Bet, Dazzling, Gain, Hedge-fund, Leverage, Losses, Market, Offloading, Public-equity portfolio, Remarkable, Returns, Situational Awareness, Stocks, Stretcher, U.S., Wildest, Wunderkind
Barron’s (June 5)
“Markets have soared toward the rare air last breathed by investors in the mid-1980s, but the stalling tech rally is bringing stocks back down to Earth.” It was “a series of quarterly updates on Wednesday that punctured a hole in the AI trade that has powered markets higher since the end of March.” The “market’s angst” was compounded by “stubbornly high Treasury yields, the lack of an agreement on ending the U.S. war with Iran, and a near 10% gain for global crude prices since last Friday’s close.”
Tags: 1980s, AI trade, Angst, Crude, Investors, Iran, Markets, Punctured, Quarterly updates, Rare air, Soared, Stalling, Stocks, Tech rally, Treasury yields, U.S., War
MarketWatch (May 30)
“Rising gas prices and inflation are causing a majority of U.S. households to fall behind financially… and the longer the situation goes on, the more stress it will place on the economy.” According to Gregory Daco, chief economist at EY Parthenon, the U.S. expansion is supported by a fragile pillar formed by “Three A’s,” namely “Affluent consumers, AI investment and Asset appreciation.” This pillar “masks an important reality. A huge swath of middle-class and lower-income families with little or no savings in stocks have not benefited much from the bull market or the AI boom.”
Tags: Affluent consumers, AI boom, AI investment, Asset appreciation Savings, Bull market, Daco, Economist, Economy, Expansion, Fragile, Gas prices, Households, Inflation, Pillar, Stocks, Stress, Three A’s, U.S.
Barron’s (May 27)
“Stocks are near their all-time highs.” Moreover, “investors are nervous about the numerous risks that could hit stocks and the economy. High oil prices and persistent inflation fears. The possibility that this will push the Federal Reserve to raise interest rates. Worries about artificial-intelligence disrupting software and other sectors.” Nevertheless, Goldman Sachs believes equities “are still good investments” because “rapidly rising earnings could keep pushing up stock prices” and, rather than dumping equities, investors can manage risk in other ways.
Tags: AI, All-time highs, Earnings, Economy, Equities, Fears, Fed, Goldman Sachs, Inflation, Interest rates, Investors, Nervous, Numerous, Oil prices, Stock prices, Stocks
The Times (May 27)
“Corporate leaders who think decades ahead in business become incredibly short-sighted in advocacy, financing ideas that become roadblocks to innovation and growth.” Big Tech is currently finding out about the phenomena that Milton Friedman dubbed “the suicidal impulse of the business community.” For years, Big Tech “helped fund climate activism,” but they now face “backlash as AI data centres drive demand for energy and infrastructure growth.”
Tags: AI, All-time highs, Earnings, Economy, Equities, Fears, Fed, Goldman Sachs, Inflation, Interest rates, Investors, Nervous, Numerous, Oil prices, Risk, Stock prices, Stocks
Barron’s (April 20)
“Stock investors might be fretting over the final stages of peace talks between Washington and Tehran but they aren’t prepared to relinquish the hard-won gains of the past three weeks nor the record highs reached in U.S. equity markets over the past few days…. The on-again, off-again nature of peace talks slated for this week in Pakistan were testing investors again Monday, but the broader market reaction suggests investors remain optimistic on a near-term conclusion to the conflict.”
Tags: Conclusion, Conflict, Equity markets, Final stages, Fretting, Hard-won gains, Market reaction, Near term, Optimistic, Pakistan, Peace talks, Record highs, Relinquish, Stocks, Tehran, U.S., Washington
