AI and energy mask broader S&P weakness
The guest highlighted analysis showing that backing out AI and energy companies reveals the rest of the S&P 500 is down for the year, exposing a highly lopsided market.
The argument
Citing Apollo's chief economist Torsten Slock, the discussion noted that 84 AI-related companies and energy stocks are driving the index's positive performance, making the S&P 500 a difficult benchmark for active managers to beat despite underlying weakness in the average stock.
The thesis, stress-tested
✓ What validates it
- ✓Equal-weighted S&P 500 performance continues to diverge from the market-cap-weighted index
- ✓Earnings growth outside of tech and energy remains flat or negative
▸ Risks discussed
- ▸Broadening of market participation could lift the rest of the index
- ▸A sharp correction in AI leaders could disproportionately drag down the index
Hear it yourself
"So that's why I think it's timely because we're in a time where, I don't know, seems like a lot of stock prices have moved around an awful lot for reasons of the moment. And we're in the middle of an AI fueled boom, which I'm sure we'll get to. We've just seen the initial public offering of SpaceX for not just 1,000,000,000,000, but 2,000,000,000,000. The ultimate really historic. Yeah. Really historic. The sirens the sirens, Pete. I wanna come back to that. Let's let's start off here. If anything says siren call, it's it's freshly minted shares of of equity, of shares of a company. It's a big market. Certainly would."
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