February 22, 2024
By Peter Bower
For most of this past week, the future of our stock market rally hung on the Nvidia earnings report. If it was good, then the rally would continue, fueled by the assurance that broad adoption of generative artificial intelligence, AI, would continue. If not, then the market would likely have corrected with a need to find a new narrative as to why stock prices should continue to advance. As it turned out, the report was fantastic, signaling that outsized technology investments in this capability would continue.
Below the surface of all this hoopla surrounding Nvidia, is an economy that is not only doing well, but may be accelerating. Despite all the fears, businesses are reshoring, (bringing production back to our shores), and investing in new products and services. Yes, many of these investments are to include or make use of AI in existing products and services or use it to invent new ones. In short, a new industrial revolution is underway.
In addition, the United States is embarking on a refresh of much of its infrastructure. Money spent on these projects will accelerate throughout this year. Remember, this is an election year and there is great incentive by the incumbent party to have accelerating growth. Biology is also undergoing its own revolution. Drug development may be aided by AI, but also messenger RNA (MRNA), and CRISPR, a gene editing technology, are leading the way.
Warren Buffet often cautioned to never count the United States out. That seems truer than ever today. Accelerating growth and earnings should drive the stock market higher. Enjoy and stay steady my friends.
The Lonely Bull
