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Feb 11
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LONG
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Alexandra Semenova
Bloomberg Reporter
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While Tech/Software sold off, the S&P 500 Equal Weight Index (RSP) hit a new all-time high. Deutsche Bank reported $62 billion in inflows to non-tech sectors in the first five weeks of 2026 (more than all of 2025). Investors are not leaving the market; they are rotating. The "Golden Age" narrative (Trump administration) combined with sticky inflation/rates favors Value, Industrials, and Cyclicals over long-duration Tech growth. The Equal Weight index captures this rotation perfectly, avoiding the drag from the Mag-7 correction. LONG. This confirms the breadth of the rally is improving, decoupling from the Mega-Cap Tech dominance. A hard landing recession would drag down cyclicals regardless of rotation. |
Bloomberg Markets
Strong Jobs Report Curbs Fed-Cut Bets | Balan...
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Feb 10
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AVOID
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Komal Sri-Kumar
President, Sri-Kumar Global Strategies
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The speaker draws a direct parallel between the current AI narrative and the 1999 dot-com era, warning that the "productivity boom" promise may fail to squash inflation. If a new Fed Chair (specifically mentioning Kevin Warsh) assumes AI will lower inflation via productivity (like Greenspan in the 90s) and refuses to raise rates, inflation will run hot. Eventually, the Fed will be forced to either hike rates or shrink the balance sheet. Historical precedents—the 2000 stock market crash, the 2001 recession, the September 2019 cash shortage, and the March 2023 regional banking crisis. The speaker warns this policy path leads to a "cash shortage problem" or a crash, forcing the Fed to eventually reverse course back to Quantitative Easing (QE). |
CNBC
Experts break down the December retail sales ...
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Feb 10
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LONG
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Bob Elliott
Substack author, Nonconsensus
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"It seems the asset markets are driving the real economy these days, not the other way around." This leads to a "jobless expansion favoring companies fed by an ongoing flow of dissaving." If asset markets are driving the real economy, continued strength in asset values (equities) can create a positive feedback loop, encouraging further dissaving and consumption. This environment is generally supportive of broad market indices and growth-oriented companies that benefit from sustained demand and wealth effects. Long broad market ETFs (like SPY) or growth-focused ETFs (like QQQ) to benefit from the positive feedback loop where asset markets drive the real economy, supported by ongoing household dissaving. A significant correction in equity markets would directly undermine the "asset markets driving the real economy" thesis. Unexpectedly aggressive Fed tightening due to persistent inflation could also dampen market sentiment. |
Nonconsensus
Dissaving Drives Decent Demand
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Feb 09
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LONG
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Kevin Hassett
Director, White House National Economic Council
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The economy is in a "productivity boom" similar to the 1990s. AI allows companies to maintain or increase output with fewer employees (lower costs). When productivity rises, profit margins expand. Since profits are the "mother's milk of stocks," this supports a continued rally in equity valuations. Software engineer productivity has increased 50-80% in the last year; GDP growth is tracking at 3-4%. If the labor market contracts too sharply (mass unemployment due to AI) before new roles are created, consumer spending could collapse. |
CNBC
Watch CNBC's full interview with White House ...
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Feb 06
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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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