My friend Cameron Dawson at NewEdge Wealth had a great chart over the weekend breaking down the earnings growth contribution from AI infrastructure vs everything else. I will add, that ex AI infrastructure includes financials where the big money center banks are benefiting from robust capital markets, which includes AI financing and also energy stocks that of course was helped by higher crude and product prices.
I bring this up to highlight again how much economic growth, earnings, margins and stock prices depends on this GenAI data center construction.
Another chart I saw over the weekend that resonated and something discussed here in the past was from my friend Barry Knapp at Ironsides Macro as we all debate the hedge fund like move by Scott Bessent who essentially shorted long dated US Treasuries because he didn’t like the rise in rates, whether due to excessive supply, both corporate and Treasury, or something else, like JGB yields or inflation, I’ll add. With respect to the deficit side, it’s not politics to say that we cannot tax our way out of this; it is the math instead as the biggest problem is our spending largesse. That is seen in this chart.
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