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Feb 18
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SHORT
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Adam Vincent
Bloomberg
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Vincent notes that "Europe's previous weakness is lack of exposure to I.T. is now acting as a strength." He highlights that the FTSE 100 ("The Footsie") and European stocks are near record highs because they offer "cyclical, commodity exposure, [and] a strong financial sector." Conversely, "software stocks coming under pressure continues to be a theme" due to fears over AI displacement and CapEx efficacy. Investors are actively rotating capital. They are fleeing the uncertainty of the "AI Displacement" narrative in the US (specifically software/growth) and seeking safety in the "Old Economy" composition of European and UK indices. The lack of tech in Europe protects these indices from the current tech-centric volatility. LONG European/UK Indices (Cyclicals/Financials) and SHORT/AVOID US Software/Growth Tech to play this rotation. A sudden positive shock in AI productivity data or a reversal in US tech sentiment could unwind this rotation rapidly. |
Bloomberg Markets
AI Displacement to Remain a Headwind for US S...
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Feb 11
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LONG
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Claudia Sahm
Economist, Federal Reserve Board
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Sahm notes the -900k/-1M revisions were "not a surprise to the Fed" as preliminary data was known in September. She characterizes the recent January data as "the best possible outcome" with payrolls lifting and unemployment ticking down. The market's fear was that the massive downward revisions indicated the Fed was "behind the curve" on a crashing economy. Sahm clarifies that this is old news and the current data shows stabilization. If the economy is cooling (slowing wages) but not collapsing (positive payrolls), the "Soft Landing" narrative holds. This removes the immediate recession tail-risk, favoring broad equity exposure. LONG. The data supports a Goldilocks scenario where the Fed can cut rates gradually into a stable economy. If the "gradual drift up" in unemployment accelerates into a nonlinear spike (triggering the Sahm Rule for real). |
Bloomberg Markets
What the US Jobs report means for the Fed
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Feb 09
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AVOID
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Barry Bannister
Chief Equity Strategist at Stifel
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The speaker compares speculative tech and the broader market to the risks seen in 2001-2002, warning that current valuation multiples cannot be sustained. The economy is currently "K-shaped," where wealthy consumers drive spending. However, this wealth is entirely leveraged to the stock market. If the market "wobbles" due to high valuations and lack of Fed support, wealthy spending will dry up, removing the economy's only remaining leg of support. The speaker notes that the Fed is no longer the guaranteed "savior" of the market, creating a drag on asset prices that rely on high multiples. Continued resilience in consumer spending despite market volatility. |
CNBC
Bitcoin is not digital gold and behaves like ...
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