Asks for thoughts on recent market rotation and volatility, noting a wild week with green after sideways action.
Marley
Dale Smothers
Attributes market action to 'AI angel of death' fears causing sector selloffs (software, financial services, trucking). Calls it investor overreaction yielding long-term opportunities, as incumbents with cash flow will acquire AI startups.
Questions whether the AI-driven sector declines represent permanent 'death' or a temporary, knee-jerk market sentiment.
Marley
Dale Smothers
Believes it's the latter (temporary). Expects knee-jerk selloffs in any sector AI looks to replace, but long-term it will work out, especially for companies with significant cash flow.
Asks Dale to explain his comparison of the market to a Rorschach/inkblot test.
Marley
Dale Smothers
Says market/economic data is politicized and interpreted based on philosophy. Uses January jobs report (strong headline) vs. downward revisions to prior year as example of mixed signals. Notes GDP growth could be seen as bullish or as AI-driven productivity leading to a K-shaped economy.
Asks how much current volatility is tied to the Fed moving slower than the market wants.
Marley
Dale Smothers
Agrees Fed reaction has been slower than desired. Notes labor market weakening but no rate cuts. Suggests AI will change how the Fed looks at rate cuts, potentially making them less effective for sparring the labor market.