Joel Elconin – Post Rate Hike Market Volatility In US Equity Markets, The AI Infrastructure Buildout Presses On

In this Daily Editorial, we are joined by Joel Elconin, Co-Host of the PreMarket Prep Show and Founder of the Stock Trader Network, to unpack the market volatility the last couple days after the Federal Reserve hiked rates by 25 basis points this week.  We also dive into the continued winners and losers, as the artificial intelligence infrastructure build out presses on.

 

• US Market Volatility: An analysis of which broad market sectors are more immune and which are more sensitive to rising interest rates.
• Rate Sensitive Sectors: Joel highlights recent weakness leading up to this rate hike in consumer staples, utilities, and transportation.  He noted JB Hunt Transport (Nasdaq: JBHT) as a company slipping on the macro news.
• Macro Headwinds and Rising Yields: Potential economic effects of the 10-year Treasury yield approaching 5%, the mounting pressure bond vigilantes are placing on Federal Reserve policy, and the continued decline in (Nasdaq:TLT) highlighting the ongoing weakness in long-duration bonds.
• Hardware versus Software Rotation: There has been a revolving rotation from hardware and software with big moves in both directions over the course of this year. 
  • Joel points out that hardware appears to have rallied of the “Leo-bottom” but that some companies like Micron (Nasdaq: MU), Broadcom (Nasdaq: AVGO), and Nvidia (Nasdaq: NVDA) still look cheap after recent Q2 earnings reports and forward guidance.

• The A.I. Trade Marches On: Despite all the recent industry warnings about the risks of A.I., and pushback from investors on the massive capex numbers for the buildout of datacenters, many companies are still benefiting by the circulation and capital spend.
  • Joel highlights the potential future knock-on effects of the AI buildout that may boost companies like Generac (NYSE: GNRC), Eaton (NYSE: ETN), and Quanta Services (NYSE: PWR).
  • Not all companies tied to A.I. are winning though, as highlighted by the multi-month sell-down in Oracle (NYSE: ORCL) on concerns of high debt loads.

 

Click here to visit Joel’s PreMarket Prep website – https://www.premarketprep.com/

 

Click here to visit the Stock Trader Network – https://www.stocktradernetwork.com/

 

 

 

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Investment disclaimer:

This content is for informational and educational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security. Investing in equities and commodities involves risk, including the possible loss of principal. Do your own research and consult a licensed financial advisor before making any investment decisions. Guests and hosts may own shares in companies mentioned.