It’s time to ‘show me the money’ on the AI trades: Strategist
July 29, 2024
Big names in tech including Amazon (AMZN) and Microsoft (MSFT) will report their latest quarterly earnings this week. Investors will be watching the results closely following some mixed results from Tesla (TSLA) and Alphabet (GOOG,GOOGL). Allspring Global Investments Senior Portfolio Manager Bryant VanCronkhite joins Wealth! to give insight into the upcoming tech earnings from Big Tech names and what investors should keep in mind moving forward. VanCronkhite explains that though the AI trade has fueled the market gains, right now, the developments aren't really showing up in quarterly results, leaving some investors questioning when it will happen. In terms of the tech sector, and the rotation into small caps that has been seen in markets the last few weeks, VanCronkhite states: "I've been calling for this value rotation going back a couple of weeks now, and it's starting to play out well. There could be more legs to this, and it makes a lot of sense. With the amount of money being concentrated in a narrow market, we only get there for one of two reasons. We either get there because of greed or exuberance, which we have today around the AI trade, or you get there out of fear. When you're worried about the overall economy, maybe the Fed being late to react, pushing us into a recession, you want to get more and more capital around a fewer and fewer set of companies where you have the most visibility." He continues with: "So both fear and greed have pushed capital into a narrow market, but those will both get resolved eventually. And I think that the cool inflation prints is giving the market the belief the Fed can begin to act, giving them the chance to jump through that ever closing window to avoid a recession. And as that happens, the natural rotation is out of the concentrate names into the value trade into the broader markets." For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Nicholas Jacobino Read More...
Big names in tech including Amazon (AMZN) and Microsoft (MSFT) will report their latest quarterly earnings this week. Investors will be watching the results closely following some mixed results from Tesla (TSLA) and Alphabet (GOOG,GOOGL).
Allspring Global Investments Senior Portfolio Manager Bryant VanCronkhite joins Wealth! to give insight into the upcoming tech earnings from Big Tech names and what investors should keep in mind moving forward.
VanCronkhite explains that though the AI trade has fueled the market gains, right now, the developments aren’t really showing up in quarterly results, leaving some investors questioning when it will happen.
In terms of the tech sector, and the rotation into small caps that has been seen in markets the last few weeks, VanCronkhite states: “I’ve been calling for this value rotation going back a couple of weeks now, and it’s starting to play out well. There could be more legs to this, and it makes a lot of sense. With the amount of money being concentrated in a narrow market, we only get there for one of two reasons. We either get there because of greed or exuberance, which we have today around the AI trade, or you get there out of fear. When you’re worried about the overall economy, maybe the Fed being late to react, pushing us into a recession, you want to get more and more capital around a fewer and fewer set of companies where you have the most visibility.”
He continues with: “So both fear and greed have pushed capital into a narrow market, but those will both get resolved eventually. And I think that the cool inflation prints is giving the market the belief the Fed can begin to act, giving them the chance to jump through that ever closing window to avoid a recession. And as that happens, the natural rotation is out of the concentrate names into the value trade into the broader markets.”
For more expert insight and the latest market action, click here to watch this full episode of Wealth!
Add Comment