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.
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%."
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