Will ChatGPT prevent a recession or is AI a baby bubble?
A return to Big Tech stocks while has helped the broader market through the year.
The $SPDR S&P 500 ETF (SPY.US)$ is up nearly 10%, while the equal-weighted S&P has gained a little more than 1%.
The Big Tech really has enjoyed the enthusiasm for AI, especially with the quick use of ChatGPT.
The $SPDR S&P 500 ETF (SPY.US)$ is up nearly 10%, while the equal-weighted S&P has gained a little more than 1%.
The Big Tech really has enjoyed the enthusiasm for AI, especially with the quick use of ChatGPT.
"The SPX seems increasingly divorced from decelerating consumer trends and other major indices (except the $Invesco QQQ Trust (QQQ.US)$ ) due to the uber-cap AI premium for some of the SPX's largest weightings (top 5 stocks: 21%)," Wells Fargo's Chris Harvey wrote. "This reminds us of 1999/2000, when Growth ( $Ishares Russell 1000 Growth ETF (IWF.US)$ ) outperformed Value ( $Ishares Russell 1000 Value Etf (IWD.US)$ ) but Fed tightenings rolled the economy - and ultimately, Tech stocks."
"We are strongly of the view that AI will change the world," Deutsche Bank's Jim Reid wrote. "The things we’ve seen from chatGPT and read about with regards to the technology suggests its going to be a game changer. ChatGPT was launched on November 30th last year and as you can see this closely coincides with the surge in the ten US mega-cap tech stocks."
Deutsche Bank designates those 10 as $Microsoft (MSFT.US)$ $Apple (AAPL.US)$ both shares of $Alphabet-C (GOOG.US)$ $Alphabet-A (GOOGL.US)$ $Meta Platforms (META.US)$ $Visa (V.US)$ $MasterCard (MA.US)$ $NVIDIA (NVDA.US)$ $Netflix (NFLX.US)$ and $Adobe (ADBE.US)$
"We are strongly of the view that AI will change the world," Deutsche Bank's Jim Reid wrote. "The things we’ve seen from chatGPT and read about with regards to the technology suggests its going to be a game changer. ChatGPT was launched on November 30th last year and as you can see this closely coincides with the surge in the ten US mega-cap tech stocks."
Deutsche Bank designates those 10 as $Microsoft (MSFT.US)$ $Apple (AAPL.US)$ both shares of $Alphabet-C (GOOG.US)$ $Alphabet-A (GOOGL.US)$ $Meta Platforms (META.US)$ $Visa (V.US)$ $MasterCard (MA.US)$ $NVIDIA (NVDA.US)$ $Netflix (NFLX.US)$ and $Adobe (ADBE.US)$
Baby bubble
"The Biggest Picture: AI for now (is) a 'baby bubble,'" BofA strategist Michael Hartnett wrote.
There are "bubbles in right things (e.g. internet) & wrong things (e.g. housing) always started by easy money, always ended by rate hikes," Hartnett said.
With the "new AI mania + 5% inflation, 3% unemployment, 7% budget deficits in ‘23" the "biggest 'pain trade' next 12 months is fed funds rate at 6% not 3%."
"The Biggest Picture: AI for now (is) a 'baby bubble,'" BofA strategist Michael Hartnett wrote.
There are "bubbles in right things (e.g. internet) & wrong things (e.g. housing) always started by easy money, always ended by rate hikes," Hartnett said.
With the "new AI mania + 5% inflation, 3% unemployment, 7% budget deficits in ‘23" the "biggest 'pain trade' next 12 months is fed funds rate at 6% not 3%."
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