Tech on steroids: AI the savior, or?
What's your AI hedge?
Hartnett with the quote of the week: "I mean, if you're going to lose your job and be replaced by AI in the next few years, might as well own some AI as a hedge, no?"
Tech is king
The NASDAQ/Russell ratio extending the squeeze, trading at another all time high level as of writing.
Source: Refinitiv
SOXuberance
Will the semis squeeze mood spill over eventually?
Source: Refinitiv
Spot up, volatility up kicks in
So do we see the next phase of the tech melt up start here, where people underweight tech start bidding up calls in order to get some "desperate" exposure to tech? VXN up on a Friday is not your normal volatility behavior...
Source: Refinitiv
Must have tech
Spot up, volatility up in tech, but zoom out and you will realize we are far from the August 2020 and late 2021 must have tech options mania...although we are seeing the early signs of it here.
Source: Refinitiv
On that huge SPX short
Yes, the SPX spec short is very short, but as we have outlined on several occasions, there are offsetting positions against this short. One of them is the NASDAQ long. Overlay the spec NASDAQ - SPX positioning vs the NASDAQ/SPX ratio and you understand some of the dynamics behind this market.
Source: Refinitiv
Put hate makes a comeback
The crowd tends to love puts at local market lows, and hate them at local market highs. Put hate is back in fashion here...
Source: Tradingview
Yields popping bubbles
Friday poetry by Hartnett: "4% real yields popped internet bubble, 3% popped subprime, crypto crashed on real yield rip from -100bps to 150bps. But market telling you real rates may need to rise another 100-150 bps from here to pop ‘baby bubble’ in AI."
Source: BiofA
Could AI make tech less rate-dependent?
MSCI World Value and Growth P/E.
Source: Macrobond
AI adoption: the 10 year macro case
Bullish! GS global economists estimate widespread AI adoption could boost global annual productivity growth by 1.4pp over a 10-year.
Source: Goldman
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