We're Alright as Long as AI Is Okay: 3-Minutes MLIV
Speakers
Mark Cudmore
— Executive Editor, Bloomberg Live / Macro Strategist
Summary
The panel discusses global equity resilience despite Middle East tensions and rising oil yields. The AI trade dominates, with the KOSPI rallying sharply while remaining cheap. Hosts advise buying dips in AI stocks until the bubble eventually bursts.
- Global equities unfazed by Iran conflict and oil price rise.
- Bond yields are rising but markets remain AI-driven.
- KOSPI up 230% since last April, yet forward P/E near historic lows.
- AI bubble is in its inflation stage, expected to last a long time.
- All dips in AI trade are to be bought until the bubble collapses.
- Trump-Xi summit could create headline risk but not derail the AI theme.
- FX markets are relatively inactive, not a focus for excitement.
Trade Ideas
KOSPI cheap despite huge rally
The KOSPI has surged 230% since April last year, yet on a forward P/E basis it is near the cheapest it has ever been because earnings growth has outpaced the price gains. This unique combination of a strong rally and cheap valuation makes Korean equities attractive.
Buy AI dips until bubble collapses
We are in an AI bubble in the inflation stage, and this is a golden era of bullishness around the AI trade. Volatility from events like the Trump-Xi summit or Iran should be bought as dips, and the AI trade will only truly collapse when earnings disappoint. Until then, all dips are to be bought.
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