Technology “sale”

Good morning. He was mostly a work as usual in the market yesterday: President Donald Trump wants to shoot someone In the federal reserve, the target shares He fallsAnd everyone was wandering around what Jay Powell wanted He says In Jackson Hall tomorrow, especially after some correct sounding minutes From the last federal reserve bank meeting. Some of the most rescued technical stocks hit an air pocket, however-more than that below. As a reminder, DongD will be on the beach next week, but it will be folded, comfortable and returned in your inbox on September 3. Our correspondent email: (Email protected).

“Selling” is not stations

This is what passes for sale in 2025:

One of the common interpretations of the sale-if we really insist on its name-is a paper issued by Nanda, an artificial intelligence initiative from the Institute of Media at the Massachusetts Institute. foot Reports:

Traders suspended some declines in the United States in a monetary report on Monday a branch of the Massachusetts Institute of Technology. The researchers said that “95 percent of organizations get a zero return” from their investments in artificial intelligence, “the researchers said. . .

“The story wanders around people,” said one of the traders close to the US Technology Fund by billions of dollars.

Nanda’s report is a very ridiculous thing that we must get stuck in.

“The state of artificial intelligence in business 2025” reads as something given on the “research” page in large consultations. The authors analyzed a set of general reports on AI’s implementation of business, sent polls to a group of companies, conducted an interview with a group of executives and summarized the results, adding some quantities and graphic fees that are somewhat meaningless. The basic conclusions, which were significantly reasonable, include:

• People who like to use AI tools out of the box like Chatgpt for Grunt Work, and use them even if their Information Technology Department tells them not to do so.

• People do not like large and complex industry systems that are difficult to prepare and integrate badly with old technology and work operations.

• A good artificial intelligence system solves a good small problem and expands from there. Artificial intelligence systems that do modest work in many things,

• The good artificial intelligence system learns its successes and failures.

• Companies that try to build their artificial intelligence systems tend to chaos.

Nothing of this means that Amnesty International It will not be a profitable product; Just to earn money, it needs to help the businessmen who are sold. But everyone has been issued zero on the title “95 percent get zero.” Is this even a bad success rate for a new technology at this stage of its history? who knows.

Nanda Kerfuffle is an ideal example of what happens when expensive markets or sub -markets are slightly. After the truth, everyone is looking for an explanation, and sometimes stupid interpretations are the only available – because the markets are expensive, do not need a good reason to sway.

House builders shares

Yesterday books About the low expectations for housing construction in the United States. What we did not mention after that, but needs some interpretation, is the reason that the stock builders’ shares were gathering despite the miserable background:

Partially, stocks simply expect interest rate cuts. John Lovalo of UBS indicated that even if the mortgage rates decrease slightly, the positive impact on home building margins can be large. Builders use mortgage subsidies or “purchases” as a sales tool, and with these purchases increasing, profits increase.

But for reasons we discussed yesterday, the rate of federal reserves may not be less than low mortgage rates, which differ (mostly) with the closet rate for 10 years. However, Rick Palacius of John Burns for Research and Consulting indicated that there is an exception: adjustable mortgages. Weapons are registered with SOFR (overnight financing rate), which tracks the FBI. The adjustable real estate mortgage is due to a simple return – it now represents 8.5 percent of all real estate loans, according to the Mortgage Banking Association. Therefore, the rate of Federal Reserve is less on the market.

It may also be that the market has concluded that things are now bad and can get the housing industry – from the point of view of inflation in costs, rates and consumer morale. With a periodic industry, the stroke in the middle of the night is exactly when you want to buy. But are we sure that this is dark as it happens?

More on focus

For this week letter About TECH’s dominance on the markets, it was filmed on a hot blackbala for hours to reach a scheme showing the value of the 10 American stocks as a percentage of the best 500, at five -year periods. As it turned out, someone did the same work, and did it better. We sent a reader to this scheme, from NED Davis Research, which shows the weight of the market for the best 10 shares during the S&P 500 over time, return to 50 years, on a monthly basis:

We already knew that the sharp height of focusing before this, in 2000, followed the decrease in a bad market. The NED DAVIS scheme explains to us that the focus also reached its climax in 1973. What the chart does not show is that the S&P 500 reached its climax in January of that year, decreased by about half of September of 1974, and did not regain its old levels until 1980.

Is this rhyme with the Dotcom bubble for 2000, and perhaps the Mag 7/AI cycle of noise for 2025? It is tempting to say that. In the late 1960s and early 1970s, the noise focused on the shares of “Nifty Fifty”, which, like major technologies today, was a stake in one direction on the future. But there were many other factors in “73-74”, from the oil crisis, to the collapse of the Bretton Woods system, to the Nixon price control tools.

In a similar note, Logan of De Shaw wrote to say that the team there is a view of the market weight of the top 10 shares inside the largest market and compared them to weighing their profits over time. Here are their scheme:

They argue that the graph shows an important difference between 2000 and today:

In the period preceding the year 2000, these companies have increased significantly while the share of profits remained the same. During the last update in the weight of the index (starting in 2016), the profit share increased from the best 10. We were discussing that the two periods are not compared directly, and the current period of the market concentration revolves around the basic economic focus more than it was.

This is true, meaning that the weight of the larger index is supported by an increase in the share of profits. But it should be noted that the gap is between Levels Through the weighing the index and the profit share in both cases: about 10 degrees Celsius in 2000 and about 8 degrees Celsius now. So how to read this graph comes to a classic question about all financial information. Do you care more about the level, or the direction of change?

One good reading

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