Another up week on the back of better than expected earnings from Nvidia.
It is impossible to ignore AI these days. I am more concerned about actually gains to productivity than the hype. I do fear that most of those gains will be at a cost to the labor force.
It always has been the argument that this technology will create more new jobs than they eliminate, but I am not so sure this time around.
I feel, however, that there is no going and putting the genie back in the bottle.
I am hopeful that humans will adapt yet again to this change and hopefully move forward.
There is no denying the benefits to investors as the indexes and averages are hitting one new record high after another.
Speaking of averages, the Dow is replacing Walgreens with Amazon. It is long overdue for technology to take the lead on this market measure.
I’m always surprised at how closely the Dow and S&P 500
charts follow each other. They are composed of vastly different companies and are calculated differently.
It goes without saying that the lead pack of seven technology stocks had another great week.
There is so much cash on the sidelines that each and every time we get even the smallest of pullbacks, money comes rushing in and has been rewarded significantly. This market is perfect for short-term traders, such as options.
Moreover, it has done nothing but go up since August. Sure, there have been minor setbacks but they are quickly erased.
All this euphoria is starting to be compared to 2000 and some mention 2008.
In 2008 we had a financial crisis that had nothing to do with equities as its origin.
In 2000, traders decided that things were different.
I actually saw that quote last week in a Wall Street Journal article. It is different than 2000, but the trading optimism is not.
I’m still amazed at how many analysts who have done nothing but make wrong predictions - such as the certainty of a recession last year - still forecast multiple rate cuts.
The recent Fed minutes and inflation reports just don’t support these predictions. Maybe we need time for people to realize that a decade of 0% interest rates is not what is normal.
Our time frame only gets shorter and shorter.
We are quickly approaching March, which historically has not been a good month for stocks.
On the positive side of the ledger, the market usually goes as it does in January and we had a great start to the year.
I am optimistic, but there are so many possible black swans out there lurking. Look at the Middle East and all of the havoc that Iran is causing.
China is not in a good spot economically and they are a significant competitor only looking to control everything.
Russia will not stop causing problems and those are the things we see.
The real deal killer is always what we don’t see coming that takes a bull market out. But spring is full of hope and I saw the first wildflowers blooming this weekend and it baseball is just around the corner.
Life is great, I hope.
