Recession risk and pockets of strength
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What are the positive stock movements despite bad headlines?
stocks that have been moving up recently despite kind of the bad headlines that we've been facing one is budweiser keeps pushing higher as we're recording it's been up for 10 consecutive sessions it's only been down twice in the last 17 sessions it had results out last week uh they they were obviously taken positive by the market but it was already drifting higher from there.
Why is Budweiser outperforming the market?
So that's one stock that's sort of bucking the overall downward trend that the market has seen.
And what are the highlights there?
So that was more of an execution story. They also said that they didn't see a heavy impact from tariffs. At that point, when they were talking, tariffs were more conceptual than they were, something that was definitely on the horizon. But even in that context, they said that they weren't particularly worried about it. And so coming from a global operation like that, investors took that to heart. But the problem is that that might be very specific to that company. They also showed some signs of weakness. Revenue was up, but volumes were down. So they were taking advantage of higher prices. So that was a situation where inflation was kind of working in their favor. And they were also benefiting from a cost cutting regime, not an aggressive one, but one that sort of was eyeing cost cutting as a goal. So They were helped margin-wise there. So you can't expect that from every company. And I think what we're learning From the recent past is that when you're dealing with high-risk assets, those can go up very quickly, but those also come down.
So a lot of the damage that's been done recently has been done in kind of those higher-risk areas, technology, crypto, those kind of spaces. But there are pockets of strength in the more defensive sectors. If you look at the performance of the major averages so far, This year, you can see the bifurcation.
What are the trends in the tech and AI sectors?
So the NASDAQ is down around 4% year to date, but the Dow is basically flat and you have the worst Dow components are Salesforce and Nvidia, both down about 13% so far this year. But if you flip it around and look at the best Dow components, you have Amgem, you have 3M, You even have IBM as sort of an old fashioned technology play doing well within the Dow.
How are major indices performing amidst market volatility?
So there are pockets of strength, even though the overall sentiment over the past week certainly has been down. On the upside, like I said, it's kind of limited. It's more companies that are sort of holding up despite the news. The downside, you have a very heavy sort of AI market. technology segments moving down. So Nvidia was down 11% in the past week, you have ARM down 10%, Broadcom was down
What are the risks and opportunities in AI investments?
10%. Oracle, which has earnings next week, was down 6%. Oracle is a good one to look at because they have the results coming out early next week. They're a company that has been spotlighted as a kind of an AI name. So look for commentary from them about their AI progress. I would also look at their spending, their CapEx, which has been going up lately as they kind of lay the infrastructure for the push, a bigger AI push. And I think that's a theme that we'll be looking at a lot with the excitement of, say, NVIDIA in the first sort of year and a half of the AI boom rising significantly. All those chips are being bought by somebody. So one of the things to watch out for is just cost that AI has in actual dollar terms as these companies try and sort of get ready, gird up for the battle ahead.
And is that why tech led the sell-off this week, is because of the higher expenses likely coming?
Is the economic outlook affecting tech and crypto markets?
I mean, I think that's a worry. I think the worry is that the revenue from additional AI investments is not going to come as fast as we had hoped. Meanwhile, the costs are happening now. So the idea that the profits from this are going to be delayed In terms of actual trading, I think it's more just sort of a high risk, low risk situation.
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Chapters
6 chapters
1
What are the positive stock movements despite bad headlines?
0:30–0:52
2
Why is Budweiser outperforming the market?
0:52–2:30
3
What are the trends in the tech and AI sectors?
2:30–2:53
4
How are major indices performing amidst market volatility?
2:53–3:22
5
What are the risks and opportunities in AI investments?
3:22–4:20
6
Is the economic outlook affecting tech and crypto markets?
4:20–10:39