Tyler Crowe

It's kind of been bubbling under the surface because, like we said, the market's rallying.

S&P 500, as we'll call a representative sample of the entire market, is doing well.

I mean, it's up 8% this year.

The NAX 100 is up 16%.

But if you start to look down into the components, there is really like a have and have nots aspect to this, mostly related to AI infrastructure spending and kind of that all the trickle down effects when you get into that.

Because right now, only 52% of the stocks in the S&P 500 are now above their 50 day moving average, which basically means you have a almost half, 48% of them are basically like trending down and probably headed down further in the sense of like,

Consumer spending, we're seeing margins compression, we're seeing lack of sales.

We discussed this a little bit yesterday, Travis, talking about consumer goods stocks like Nike, where we're seeing having to go to discounting and things like that to drive sales, but it's also just leading to margin pressure for them.

And that's also because consumers are feeling it as well on these particular companies.

In this strange sense of like, yeah, we feel...

From the wallet perspective, we feel what's going on with inflation, but the market doesn't seem to care because you have this weird place of AI infrastructure spending with these gigantic companies that are either spending on the cash on hand or spending it from cash from operations where they don't have to take on debt.

They're not worried too much about inflation rates or anything like that because it's not like there's going to be long-term consequences to what they're doing.

PPI, you could say, is the leading indicator of CPI because it's higher up the supply chain.

You know, your distributors, your manufacturers that are going to add value and then finally get it to the customer eventually.

This is where they're seeing the pricing pressure from a lot of things that we were just talking about.

You have basically this supply bottleneck talking about AI hyperscaler infrastructure spending.

It feels like every discussion we have these days comes back in some way or another to AI infrastructure spending because it's so large.

But you look at a lot of suppliers in these industries, they're looking at book-to-bill ratios where the amount of orders coming in the door is...

70% more than the equipment that they're shipping out in any given month.

Backlogs for stuff multiple years.