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‘Peak Goldilocks’: Why The Party May Be Over
It's "tempting," one bank says, to believe "peak Goldilocks" has come and gone.
The combination of fading inflation, nascent signs of cooler wage growth and a robust US jobs market (despite daily layoff announcements), was conducive to risk-taking in the new year.
Importantly, it's all an extension of what began on October 13, when an upside US CPI print was accompanied by a sharp, bullish intraday market reversal. Subsequently, all concerned parties acquiesced to the idea of a ~5% terminal ra
I hope all these bearish analysts and banks are right. I would love one more pullback before the generative AI bubble kicks off in earnest. Obviously some of the big tech names are already up big in the last two months, but I’d love to open up a significant position in companies that will help build the infrastructure to support the massive increase in computing power required for generative AI. Nvidia has already doubled from its low in October and AMD is up quite a bit as well. Heck, maybe Intel can even get their act together given that this will be an all-hands on deck effort to supply the processing power that will be needed.
Given all that, I hope Powell gives tech one more big scare because we might already be seeing the impact to the tech market of the potential that generative AI has. Rates are probably still the primary driver, but we will be seeing a new driver take the wheel soon if it hasn’t already.
Thanks for Saturday morning tongue-in-cheek humor.
Be careful what you wish for. Studies have already demonstrated that an AI system can be hacked by changing the order in which training data is fed to it. Cybersecurity experts have only a glimmer of the security vulnerabilities in AI systems and little to no idea how to mitigate those threats.
No doubt this will have massive implications for society that we have barely begun to understand, but the genie is out of the bottle. Companies and governments are plowing full speed ahead because this is happening fast and no one wants to be left behind. Markets will respond accordingly.
Neal Stephenson had a pretty good idea when he penned “Snow Crash” and it wasn’t pretty. Remember auto-correct is AI and we all know how that works. Once and a while it can be stubborn and refuse to write what you want. Imagine stubborn, contrary AI in your car’s computer.
I’m enjoying the AI art platform H is using.
Not convinced it will be earthshaking in other realms.
2yr went from 4% to 4.50% in a very short span. Market is tense and fragile. For an I vector the best policy is to stay diversified and be conservative with risk.