Artificial Intelligence Is Rampant
This is the morning report for March 1st, 2024.
From Barron's this morning:
"The Nasdaq Composite finished the month with a flourish, closing at a new all-time high Thursday—surpassing its previous record set in November 2021. It jumped an impressive 6.1% in February for its fourth consecutive monthly gain"
"Markets would normally have been spooked by core PCE, the Federal Reserve’s preferred inflation metric, rising 0.4% in January from the previous month. While that was in line with expectations, it’s not a great inflation reading and only points to the central bank waiting longer before cutting interest rates"
"...investors only really have eyes for the artificial-intelligence frenzy right now"
FR: Sounds familiar, except, as I've noted recently it's not only AI stocks that are in a frenzy right now.
As we see in the Bitcoin Trust chart below, the speculative frenzy began after FOMC, hiccupped at CPI and then went vertical.
By the way, did the Nasdaq really surpass its November 2021 high in February as Barron's asserts above?
No.
That's one story I got out ahead of the media.
Here's another one: Overnight we just learned NYCB NOT fixed:
"The turmoil surrounding New York Community Bancorp (NYCB) is intensifying again after it disclosed the exit of CEO Thomas Cangemi, weaknesses in its internal controls and a tenfold increase in its fourth-quarter loss to $2.7 billion"
NYCB is making new 2024 lows in the pre-market:
Another thing that doesn't make any sense in a "higher for longer" rate environment is homebuilders making a new all time high. These are the most interest rate sensitive industrial stocks.
In summary, artificial intelligence is the only plausible explanation for irrational markets.
