Thoughts on the Market

The current gold rush in the investing world is the battle to win the artificial intelligence race. The pot of gold for the eventual winner(s) is beyond calculation. While we continue to own some of the industry leaders such as Microsoft and Amazon, we are starting to be a bit concerned about valuations. At this point, we are looking more at companies that are essential to the build out of AI data centers, the essential picks and shovels, which trade at much lower price/earnings multiples, but will still participate in the growth of the sector. We will also examine the key drivers of the economy to see where there is value to be had. This month, we will review the geography of the AI and economic landscapes and explore where future pitfalls and veins of profit may be.

Fall is upon us, to the delight of nature lovers and North American sports fans. You can enjoy a drive to see the fall colours and watch baseball, basketball, football and hockey in the same weekend. It is also the time of our favourite season of all: third quarter US earnings season.

Cat Stevens’ emotional ballad is about lost love, but one thing remains true as it relates to the stock market: investors love interest rate cuts. So why is the first cut important? One interest rate cut does not make a trend as it is only a simple data point. However, if more interest rate cuts happen, a trend begins, and the market gains momentum. This month, we will focus on North American interest rates and their projected impact on both the market and the economy.