JPMorgan's Marko Kolanovic warns that the hype around AI is creating a bubble that could burst due to various macroeconomic factors. Scott Wren of Wells Fargo believes that the risk of inflation rebounding is too high, making the current market entry point risky. BlackRock predicts volatile inflation ahead, which could squeeze corporate margins. David Rosenberg of Rosenberg Research compares the current market situation to the Dow's 13-day winning streak in 1987, which was followed by a significant drop. He warns that falling inflation could lead to lower profits for businesses, negatively impacting stocks.
Key takeaways:
- Some Wall Street analysts are predicting a sell-off in stocks, despite the S&P 500 having its best year since 1927, largely due to excitement for artificial intelligence.
- JPMorgan's Marko Kolanovic warns that the hype for AI is creating a stock bubble that could burst due to factors such as the global interest rate shock and erosion of consumer savings.
- Wells Fargo's Scott Wren believes there's a high risk of inflation rebounding, which could lead to sharp pullbacks in the sectors that have driven the recent rally.
- BlackRock predicts volatile inflation ahead, which could squeeze corporate margins, while Rosenberg Research's David Rosenberg warns that falling inflation could mean lower profits for businesses, potentially weighing on stocks.