META AR Glasses, Monetary Easing Cycles and The Dynamics of the Expanding Bull Market
META AR Glasses, Monetary Easing Cycles and The Dynamics of the Expanding Bull Market
Jobs report smashes expectations, Chinese bull market, and commodity narrative shifts
Market Update📈📉
Welcome back.
Meta is at an all-time high after a successful demo for its roadmap on AI.
Long-time readers will know that within Mag 7, Meta and Amazon tend to be our favorite plays.
I recommend folks listen to the most recent interview between Ben Thompson and META CTO Andrew Bosworth.
There’s a lot to say about Meta - distribution, embedded real options, Founder leadership, cheap valuation relative to peer group.
The single most important is this: Meta is not priced in for AI. AI leaders have much higher multiples than Meta.
And Meta has a credible shot on goal for taking attention away from Apple and Microsoft.
We believe AI is real - and that conventional operating systems and hardware experience are at risk of disruption over the next few years.
Meta is up 61% YTD. Hope you are enjoying the ride.
We get it. Mark gets it. Now, markets are starting to get it too.
Thoughts on Easing cycles into soft landings. And is it bullish for stocks.
History tells us that why the Fed is cutting matters. Asset performance around the start of the easing cycle has differed depending on what motivated Fed cuts.
Whether this cutting cycle will ultimately be accompanied by a "growth scare" or a "recessionary" episode is the major question for investors today.
Asset behavior leading into the start of the cutting cycle – say 3 to 6 months prior – has not substantially differed in advance under these different environments, so market performance into the first cut does not seem to help in identifying what comes next.
Meaningful differences in asset performance come only after cuts have begun. In recessionary episodes, yields continue to decline more clearly after the first cut. But, it is in equities where different growth backdrops matter most. In recessions, equities have continued to decline after the first cut, while stocks have rallied strongly in soft landing / no landing episodes.
Best Twitter Links:
Podcast & YouTube Recommendations🎙
Nick Colas goes on CNBC:
Awesome Ted Siedes interview on Invest Like The Best: Investment Industry Paradigms
The Future of Intellegent Machines - Invest Like The Best
Best Links of The Week🔮
The best read on what has gone down in the the middle east over the last month. Source: Tablet Piece from Lee Smith
Who was Hassan Nasrallah, the Hezbollah leader killed in Beirut strike - Source: CNBC
"China said Sunday that it would allow home buyers to refinance their mortgages, the latest in a weeklong torrent of policy moves aimed at supporting the struggling economy. The move marks a shift in how Chinese pay off their home loans and could allow policies aimed at addressing a prolonged property-sector slowdown to more effectively filter through to the market. Before this, many Chinese home buyers with existing mortgages have been unable to immediately benefit from interest-rate cuts." Source: WSJ
"Apple is no longer in talks to participate in an OpenAI funding round expected to raise as much as $6.5 billion, an 11th hour end to what would have been a rare investment by the iPhone maker in another major Silicon Valley company." Source: WSJ
"Shigeru Ishiba’s election as leader of Japan’s ruling Liberal Democratic party is expected to put pressure on the country’s stocks on Monday morning after Nikkei 225 futures fell 6 per cent following his victory this week. Ishiba, a former defence and agriculture minister who is set to take over as prime minister on October 1, is a China hawk who has vowed to prevent the nation from falling back into deflation... investors are concerned about his support for heavier taxes on companies and investment income." Source: FT
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