AI Fears Shake Tech Stocks, Dow Hits Record High

0:00 Speaker 1 Sunday morning. Let’s get an update what happens in the financial markets last week? Well, it’s Sunday morning, John Charity is, where does John give us an update?

0:11 Speaker 2 Well, it was a real rollercoaster, the like of which we have seldom seen, and of course it ended on a high note. But let me go back a step or two, because there was a big tech sell off, as you know, and the reason for that was that there’s a fear on walltreet that AI is now going

0:25 to take our jobs sooner than we thought and reduce the need for quite so many software companies. Now, these software companies who either make software or use it cause of very high value companies on walltreet, and clearly they’re not all going to survive over time, just like some of them didn’t back in the dot com bubble era

0:43 in two thousand and one two thousand and two. And Wallstreet Warrior is that some of these companies are spending too much on capital expenditure on their AI things like data centers and micro chips and other paraphernalia. But at the same time, wallfreet is concerned that there might be a fear of missing out. You know, they wonder if

0:59 these companies arise and they invest all this money, you know, will we be left holding the baby as it were? Now, what happened last week? A company called Anthropic from San Francisco basically put out an update to earn AI legal tool that it has. And this legal tool is so sophisticated it can distract basically all the other legal software

1:18 out there. You know, it’s better than they are, and it’s AI, and it also reduces the need for so many lawyers as well. So this sparked the selloff, But it’s not a new fear because we’ve been talking about this for the last two years. So I’m not really sure why caught fire last week in the way that

1:33 it did, but Anthropics seem to have been the starting point. And then on top of that, you’ve got Alphabet, Google and Amazon beating their earnings expectations or coming in in line, but again their expenditure on AI capital expenditure completely overshadowed.

1:48 They’re very good earnings, and Wall Street marked them down sharply. That dilemma again, are they spending too much money on this or not? In total, they’re spending about six hundred and fifty billion dollars by the way in the next couple of years, all these tech companies together. So that marked the beginning of quite a bad sell off last week.

2:06 Of course, the other story was Bitcoin, which was about half the value of its highs from last year. Now, the crypto community says, look, don’t worry about it. This wasn’t the biggest four we’ve seen with bitcoin. We called it a crypto winter. Everything’s going to be okay. And so we turned to Friday, and it turns out that

2:21 things were okay because Bitcoin shot up by about twelve percent. It was around seventy thousand dollars per token, whereas it had been down to sixty two sixty three something like that. And of course, as you predicted, and I know that you’re always right, but as you predict.

2:37 Speaker 1 It not always, not always more so than that, now did it well?

2:44 Speaker 2 They did it? I mean you told me this was going to happen, and I’ve been agreeing with you for the last three months. And then on Friday at two twenty three pm in the afternoon, the Dow crossed over fifty thousand for the very first time. So there was a strong recovery on Friday in stock. So that’s why

3:00 I say, it’s been quite a roller coaster of a week, and then just quickly looking ahead to the week to come. Tuesday we hear from Coca Cola, Harley Davidson hasbro matel the toy companies and fought. On Wednesday, we’ve got CBS Health and McDonald’s and the jobs report of course, Jobs Wednesday coming up very unusual Thursday, Coinbase, which is a

3:17 cryptocurrency exchange, and next Friday we get CPI the inflation data. I wonder where exciting?

3:24 Speaker 1 What? Why was the pulse? Why did bitcoin fall so much? What is the rumors industry?

3:31 Speaker 2 Well, the problem is that, unfortunately bitcoine, as you well know, is not really tethered to anything. So the dollar, for example, is tethered to the full faith and credibility of the United States and the United States government. Crypto is just where it is because people want it to be where it is, and it’s all based on sentimentality with crypto,

3:53 and unfortunately, the sentimentality just ran out in the middle of last week, along with all the other geopolitical stuff that’s going on the world. People just lost their nerves and enough big investors just decided to cash out. But the important thing to remember is the crypto community, the die hards. They don’t care, they reckon. This is just

4:11 a crypto winter. We’ve seen it before. Everything’s going to be okay.

4:16 Speaker 1 Thank you so much, and we’ll catch up with you again real soon.

4:20 Speaker 2 Yep, see you next Sunday. Thank you, John, thank you