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Feb 17
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$6843
$6881
+0.6%
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LONG
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Ben Carlson
Director of Institutional Asset Management, Ritholtz Wealth Management
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"The Mag 7 is down over 6% this year. The 493 is up almost 4%... the equal weight S&P, that's RSP, is up almost 6%." The market is broadening. Investors are no longer waiting for Tech to recover; they are actively diversifying into the "average" stock. If this spread continues, it will force passive flows and advisor allocations away from market-cap weighted concentration into broader exposure. LONG Equal Weight S&P 500 to capture the rotation into the broader market. A resurgence of Mag 7 dominance reversing the rotation. |
The Compound News
“Unrealized” Capital Gains Tax is Economic Su...
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Feb 17
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—
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LONG
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Marvin Loh
Global Senior Macro Strategist, State Street
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"I would say equal duration makes sense... think through some of the more stable aspects of the technology sector... Gold... is no longer that safety hedge." State Street believes the "Risk On" trade is rotating, not ending. Volatility requires a safety anchor, but Gold and Swiss Franc are too expensive. Therefore, the best risk-adjusted allocation is "Equal Duration" (buying Treasuries to lock in yields as the Fed cuts) and "Stable Tech" (Cash-rich, profitable tech, not speculative AI startups). LONG TLT (Duration) and Quality Tech. AVOID Gold (XAU) as a hedge. Inflation re-accelerating (above 2%) would hurt the long duration bond trade. |
Bloomberg Markets
Stock Futures Slide; US, Iran Hold Talks in G...
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Feb 17
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—
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LONG
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Neil Campling
Tech/TMT Analyst
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"I think at this point there are three or four platforms that had the scale that could be an alternative source... And, of course, the Pentagon has had some deep relationships with of the big tech companies for a number of years." Anthropic's ethical hesitation ("safeguards against basically mass surveillance") creates a friction point in securing government defense contracts. The Pentagon's demand for AI capability is urgent. If Anthropic stalls, the capital and contracts will flow to the "alternative sources" — the legacy Hyperscalers (Microsoft, Google, Amazon) who already possess the required scale and deep, existing security clearances/relationships with the DoD. LONG US Big Tech as the default beneficiary of defense AI spending when ethical pure-plays (like Anthropic) decline participation. Regulatory pressure on Big Tech regarding AI safety could increase; Anthropic might eventually concede to secure revenue. |
Bloomberg Markets
Anthropic in Disagreement With Pentagon Over ...
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Feb 13
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—
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LONG
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John Micklethwait
Editor-in-Chief, Bloomberg
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Micklethwait observes, "Americans are winning white-collar AI, ChatGPT, Anthropic and Gemini." The geopolitical landscape is splitting technology stacks. The US has a distinct lead in the "brain" of AI (LLMs and software). As global instability rises, capital will flow to the winners of the "White Collar" AI race for safety and growth. Long US Big Tech (specifically Model Providers) as the dominant force in generative AI. Regulatory crackdown; AI capex bubble. |
Bloomberg Markets
Poland’s Sikorski Says Europe Deserves Role i...
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Feb 11
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$6941
$6881
-0.9%
|
WATCH
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Carrie Firestone
Investment Committee Member
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"You take it in aggregate... there's a few big things that buoy the whole thing up. You disaggregate it, you look at the other 493, it's not as rosy a picture." While the headline S&P 500 earnings look strong, they are distorted by Mega Caps. The underlying health of the remaining 493 companies is questionable, suggesting the "broadening" narrative faces fundamental headwinds if those companies don't deliver earnings growth. WATCH. Be careful assuming the "average" stock is healthy just because the index is up; stock selection is critical outside the Mega Caps. If the economy accelerates significantly (soft landing achieved), the "493" earnings could catch up rapidly. |
CNBC
Here's how to trade around the hot jobs repor...
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Feb 10
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—
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WATCH
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Deirdre Bosa
Anchor/Reporter, CNBC Tech Check
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US Big Tech is spending over $500B on AI, while Databricks CEO states Chinese models are "right behind us and they're basically free." This highlights a massive ROI risk. If US Tech is spending half a trillion dollars to achieve "Frontier" status, but "Good Enough" models are available for a fraction of the cost, the US Hyperscalers may be over-investing in a commoditized asset. The market is asking, "What if you don't need to spend that much?" WATCH (Negative Bias). If the narrative shifts to "AI is a commodity," the massive capex spend will be viewed as capital destruction, compressing multiples. The "Frontier" models may achieve a capability jump (AGI) that "Good Enough" models cannot replicate, justifying the spend. |
CNBC
U.S. vs. China AI spending gap widens
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Feb 09
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—
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NEUTRAL
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Peter Boockvar
Chief Investment Officer, BFG Wealth Partners
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The trade is "sputtering out." While stocks like Google are up, the group is no longer moving in unison as a guaranteed win. The intense competition for AI dominance is expensive and taking a toll on these companies. Furthermore, foreign investors are increasingly hedging their dollar exposure when buying these stocks, signaling caution on the currency side. The Mag-7 became a "global reserve asset," leading to overcrowding, but momentum is fading as investors look for cheaper alternatives globally. Continued AI breakthroughs could reignite momentum in the sector. |
CNBC
Dollar weakness was a major catalyst for glob...
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Feb 06
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$6932
$6881
-0.7%
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LONG
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Ed Yardeni
President, Yardeni Research
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While the tech giants fight, the rest of the market (the "Impressive 493" and the Dow Jones Industrial Average) is performing extraordinarily well. The $650 billion being spent by the hyperscalers flows directly into the revenues of other companies. Building data centers requires 500 to 1,000 different vendors—including steel, concrete, wiring, and power. This acts as a massive economic stimulus, boosting GDP to ~5% and lifting the earnings of industrial and broader market companies. The Dow Jones is hitting record highs, and the economy has remained resilient despite high interest rates and inflation. A potential realization that the AI capital spending will not be profitable could eventually hurt the broader sentiment. |
CNBC
Market bounce back has to do with spending hy...
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Jan 30
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—
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LONG
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Jeff Park
Chief Investment Officer, Pro Cap Financial
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Jeff Park notes that Amazon laid off 16,000+ workers (30k+ total recently) while simultaneously experiencing massive productivity gains due to AI. This is "Good Deflation" for the corporation. Companies are successfully decoupling revenue growth from headcount. This signals massive margin expansion for tech giants that can effectively replace "bureaucratic administrative management" with AI. Long Big Tech companies executing AI-driven cost reductions. "Occupy AI" social unrest or regulatory backlash against mass displacement of workers. |
The Block
Pompliano: Forget inflation, bitcoin's price ...
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