Optimism Abounds!
Market Commentary

The Markets

Enthusiasm for everything related to artificial intelligence (AI) drove a global stock market rally last month. Equity markets in the United States, Europe, and Japan hit highs after a leading chipmaker reported better-than-expected earnings and an extraordinary surge in demand for its artificial intelligence-targeted processors.

Investors took the news “as evidence that the generative AI boom is both real and spreading. Nvidia’s spectacular earnings report and forward guidance are spurring investors to buy shares of almost any company with a stake in the AI race—everything from computer and networking hardware providers to cloud computing plays to enterprise application software,” reported Eric J. Savitz of Barron’s.

Investors weren’t the only ones feeling optimistic. Economists who participated in a February Bloomberg survey expect the U.S. economy to grow this year and next year, although a significant minority say that a recession is possible in 2025, reported Augusta Saraiva and Kyungjin Yoo of Bloomberg. They cited a source who stated:

“The U.S. economy remains the envy of the world…Both real economic growth and employment growth remain strong while inflation rates and interest rates are falling.”

Chief executive officers (CEOs) are feeling optimistic, too. The Conference Board Measure of CEO Confidence™ survey found that CEOs are feeling much better than they did at the end of last year.

32% said economic conditions were better than they were six months ago (up from 18% in the fourth quarter).

31% said conditions in their industries were better than they were six months ago (up from 27% in the fourth quarter).

36% expect economic conditions to improve over the next six months (up from 19% in the fourth quarter).


People use all kinds of information to make investment decisions. Benjamin Graham, who was Warren Buffett’s mentor, thought the proper approach was to evaluate company fundamentals. Graham wrote, “The stock investor is neither right nor wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”

British economist John Maynard Keynes cautioned that how “others” think about stocks can have a significant effect on performance. Keynes is famous for saying, “Markets can remain irrational longer than you can remain solvent.”

Meme stocks, which are shares of companies that become popular through social media, demonstrated Keynes’ point. These companies often have poor fundamentals, but their stock prices soar because they are well-liked online. Social sentiment indicators use aggregated social media data to evaluate how people feel about companies. This data can be valuable to asset managers because digital influence can affect stock prices.

Many factors affect the value of stocks and stock markets. “…Investor confidence is only one of many forces on the market. Stock prices are of course determined by supply and demand, and numerous factors affect these, fundamental factors, legal, tax-related, demographic, technological, and international, as well as other psychological factors related to attention, regret, anchoring, and availability,” explained the International Center for Finance at Yale University.

Stock market performance also can be affected by geopolitical factors, like the conflict in Ukraine and the Middle East.

Focus – Think About It

“A long habit of not thinking a thing wrong gives it a superficial appearance of being right.”
Thomas Paine, founding father

(That sounds about right to me!)

IMPORTANT REMINDER: I have a FIVE Star Fund that is yielding 6.65% and pays income monthly. It’s also liquid and could be an option to discuss if you are holding CDs. Please, reach out to me if you’d like to add some underperforming cash, savings, or CDs that you’d like to blend in with your holdings.

Best regards,


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(or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/02-26-24_Bloomberg_Stocks%20Around%20World%20Are%20Swept%20Up%20in%20AI%20Rally_1.pdf)

(or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/02-26-24_Barrons_Nvidias%20AI%20Boom%20Spurs%20Other%20Stocks_2.pdf)

(or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/02-26-24_Bloomberg_Economists%20Lower%20Recession%20Forecasts%20to%2040%25_3.pdf)


(or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/02-26-24_Barrons%20Data_5.pdf)













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