Introduces Ed Yardeni and asks for top-level thoughts on the market.
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Ed Yardeni
Happy days are here again. Everybody is buying across asset classes (stocks, Bitcoin, gold). This is driven by $650B in planned hyperscaler spending, which is very stimulative to an already strong economy. Large refund checks are also coming.
Notes the irony of Amazon down 8% while NVIDIA and the AI value chain are up, suggesting a split market reaction.
speaker1
Ed Yardeni
Nobody is talking about a recession. The only question is how big the boom will be from all this spending.
Highlights 5% GDP growth and emphasizes the trickle-down effect of data center spending on hundreds of vendors (steel, concrete, wiring), making it a huge economic stimulus.
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Ed Yardeni
The economy has been amazingly resilient since the pandemic. Despite numerous shocks (supply chain, inflation, rate hikes, tariffs), we are at all-time highs in both markets and the economy.
Asks about falling rates helping AI and references Yardeni's past call that the Mag-7 are turning on each other, losing their protected moats.
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Ed Yardeni
The competition is exciting. Advantages shift daily among hyperscalers and LLM makers, with rapid innovation and one-upmanship.
Expresses optimism because the market has done well even without recent gains from Amazon and NVIDIA, suggesting a healthier, broader rally.
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Ed Yardeni
It's impressive. Past concentration concerns made the market vulnerable. The DeepSeek moment was a stress test. The capital spending will be profitable because smart companies are expanding capacity to meet demand, which will generate future cash flow.
Asks if the Mag-7 competition is a long-term problem or just a near-term issue for investors.
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Ed Yardeni
It's a near-term issue. The Mag-7 need to sell tech to the rest of the S&P 500. The Dow's strength confirms this is positive for the whole economy. Increased tech competition is natural; they 'eat their young' to innovate. I called for a relative correction and market broadening as tech was overdone.