All the major stock indices were essentially unchanged yesterday, until late in the session. After the close, we realized those small ripples in the water could be harbingers for more turbulent waves heading our way.

The debt ceiling timetable changed big time, and now the clock strikes midnight in four or five weeks.

The Canary Shrills

Stocks exuded calmness, but the bond market made big moves, as the ten-year yield moved 16-basis points (BPS) to 3.58. It was the biggest one-day move since September 26, 2022. The yield is bouncing around in a narrow range, but I suspect a move above 3.65% could clear the path to fill the gap at 3.90%.

Quiet Session

Amazon (AMZN) and Tesla (TSLA) continued to struggle among mega-cap names, as buyers returned to Materials (XLB) and Health Care (XLV).

Sector Performance

Energy (XLE) and Consumer Discretionary (XLY) traded as if the recession had already arrived.

There has been a lot of chatter and debate over the potential of Artificial Intelligence (AI), and most of it seemed to be centered on the impact in the years to come – not right now. But yesterday, a tidal wave of headlines underscored the potential and threat of A.I. here and now.

The Godfather of A.I. has left Google and warns of danger ahead. This was on the heels of Elon Musk’s public crusade to get a hold on the situation with a six-month pause.

While we brace for what A.I. means for humans’ existence, we see its destruction of human jobs.

CHGG was down 37% in after-hours trading.

A.I. is another wrinkle that is going to be very hard to handicap.

Heck, we can’t get our arms around what the Fed thinks, even though evidence and trends say Powell & Company should be thinking about a pause.

Portfolio Approach

We added a new position in Technology yesterday to our Hotline Model Portfolio.

Today’s Session

Lots of companies reporting this morning.  Plus, investors are awaiting tomorrow’s FOMC decision and Powell’s comments. 

The markets are down but modesty so far this session.

Comments

Maybe AI should replace the Fed!? What could go wrong (besides everything)! Charles Lucente on 5/2/2023 10:13:37 AM

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