Kevin Gordon 5.0 4 ideas

We came into the year relatively constructive outside of the U.S. from a stock market perspective... given growth around the world higher to this. Especially in Europe and parts of Asia. The weak dollar story was a huge support to ex-U.S. stocks. International developed markets are benefiting from a combination of accelerating relative economic growth and a weakening US dollar, which boosts the value of foreign earnings when translated back to USD. Long broad international or developed market ETFs to capture the geographic diversification and currency tailwinds that are currently outpacing US domestic growth. A sudden spike in the US dollar due to geopolitical safe-haven flows, or a severe escalation in the Middle East conflict that disproportionately hurts European energy markets.

If you believe it is starting to diffuse throughout the economy, you're seeing benefits of this technology, it may not be the best from a cap weighted index perspective. If you thought tech and communication services with the big drivers and players... they are taking more of a backseat giving way to the rest of the market. The initial phase of the AI trade heavily rewarded the mega-cap tech companies building the infrastructure. The next phase will benefit the broader economy (non-tech sectors) that adopt AI to increase productivity and expand profit margins. Long equal-weight S&P 500 indices to reduce concentration risk in mega-cap tech and gain exposure to the broader market's impending productivity boost. AI adoption in non-tech sectors takes longer than expected to materialize into actual earnings growth, or mega-cap tech continues to monopolize all AI-related profits.

Brent crude creeping back up in the 80 to 90 range but hovering there and I think that puts more of a pinch on the consumer... I think it starts to eat into stimulus coming to the consumer. Despite massive tax refunds averaging $3,700 from new legislation, elevated energy prices act as a regressive tax. Lower and middle-income consumers will be forced to spend their tax stimulus on gasoline rather than discretionary retail goods. Neutral on consumer discretionary stocks. The bullish catalyst of government tax stimulus is being directly neutralized by the bearish reality of $80-$90 oil prices at the pump. If oil prices collapse due to a sudden end to the Middle East conflict, the consumer discretionary sector could see a massive rally as the tax stimulus is freed up for retail spending.