Julia Coronado

"We've got the AI tailwinds on investment." While the consumer and broader jobs market are slowing, corporate capital expenditure on Artificial Intelligence remains a robust pillar supporting the economy, preventing a recessionary spiral. Long AI infrastructure and investment themes as the primary growth engine in a slowing macro environment. Overinvestment or lack of ROI in AI projects could remove this economic prop.

While the consumer struggles, Coronado observes that "the stock market and anything tied to AI is, you know, everything's coming up roses." This highlights the "K-Shaped" economy. Capital expenditure on AI infrastructure is decoupled from the average consumer's wallet. Investors should remain long the winners of the "K" (AI/Tech) while avoiding the losers (Consumer Cyclicals). LONG AI beneficiaries as they are insulated from the labor market "bleed" affecting the broader economy. Valuation compression if the broader economic slowdown eventually impacts enterprise tech spending.

While the consumer struggles, Coronado observes that "the stock market and anything tied to AI is, you know, everything's coming up roses." This highlights the "K-Shaped" economy. Capital expenditure on AI infrastructure is decoupled from the average consumer's wallet. Investors should remain long the winners of the "K" (AI/Tech) while avoiding the losers (Consumer Cyclicals). LONG AI beneficiaries as they are insulated from the labor market "bleed" affecting the broader economy. Valuation compression if the broader economic slowdown eventually impacts enterprise tech spending.

While the consumer struggles, Coronado observes that "the stock market and anything tied to AI is, you know, everything's coming up roses." This highlights the "K-Shaped" economy. Capital expenditure on AI infrastructure is decoupled from the average consumer's wallet. Investors should remain long the winners of the "K" (AI/Tech) while avoiding the losers (Consumer Cyclicals). LONG AI beneficiaries as they are insulated from the labor market "bleed" affecting the broader economy. Valuation compression if the broader economic slowdown eventually impacts enterprise tech spending.

Coronado forecasts an "upward drift in the unemployment rate" and states this data supports a baseline of "another cut or two as the year unfolds." Bond prices are inversely correlated to interest rates. If the labor market weakens ("slow bleed") and the Fed cuts rates to support employment, yields will fall, causing long-duration Treasuries (TLT) to rally. LONG bonds as a hedge against the deteriorating labor market. Inflation re-accelerating, preventing the Fed from cutting despite labor weakness (Stagflation).