Living costs in a stage 4 decline will take over from AI as the driver of the US equity bull market. AI drove it since 2023, but its capital spending and debt loads are in question; falling food prices, rents and housing prices make a bearish view hard to justify. x.com  x.com 

Far less inflated valuations and significant AI earnings make US equities unlike the dot-com market top. AI/SI spending may still be overexuberant. Rates and yields have returned to historical averages; more oil through the Strait of Hormuz and from OPEC and Russia should lower oil and inflation. The market may not have bottomed yet, but falling yields, steady rates and the midterms passing should let it climb the wall of worry. x.com  x.com  x.com 

US stocks face a potentially bigger selloff as rising inflation compounds concerns about AI spending. PCE inflation reached a four-month high of 3.6%, increasing pressure on the Fed to raise rates; Alphabet shares fell after disappointing earnings, slowing ad growth and more than $51 billion of quarterly capital investment. x.com 

Alphabet's AI capex payback is being repriced, making its post-earnings decline more than a one-day mood swing. Guidance and cloud and AI margin commentary are the near-term tests. If growth continues but the multiple compresses, the risk is duration in mega-cap AI, not a collapse in technology growth. x.com 

Inflation and interest-rate fears, not an AI slowdown, are driving the selloff in AI stocks. The market and Fed are reacting wrongly to AI's rapid growth and value creation. Apart from year-end tax-loss harvesting, there is no reason to sell; this should pass and holders should come out stronger than ever. x.com  x.com 

Expensive borrowing makes debt-funded AI projects harder to justify, pressuring AI stocks and the S&P 500. Inflation keeps pressure on rates. If Republicans lose Congress after the midterms, Trump could rely on executive action to speed permits, power projects and existing funding programs, keeping AI investment moving despite expensive money. Tech and risk assets could catch a bid if earnings hold and bond yields settle; Fed cuts remain uncertain. x.com 

US stocks broadly are undervalued because most of AI's economic value flows to the businesses consuming tokens, not the token producers. AI agents do tasks far more cheaply than human labor, so value creation exceeds value capture by 50:1 or more, lifting aggregate earnings. S&P 500 earnings growth should accelerate beyond historical norms, in step with model labs' revenue. 2026 EPS revisions already outpace the norm, inflecting as Claude Code spread in January, even with CAPE at 42x. x.com  … Show more

Debt-funded AI building is making tech stocks vulnerable to a 25-30% pullback as rates and energy prices rise. AI company borrowing reached $466B this year versus $101B a year earlier; weekly default-insurance trading on seven AI names rose from under $2B in July to over $9B in September. Keep cash for lower prices, though 30% earnings growth and a 19x market multiple argue this is not an AI bubble. x.com 

The S&P 500's concentrated, correlated AI exposure makes a large allocation too risky as rates rise. Higher rates could force data-center bondholders to sell AI equities; early AI use appears to be stagnating and unclear ROI may cap demand even if usage grows linearly. Failed lab IPOs or a credit-driven recession could also undermine the market. AI moving on-device or on-premise is another significant risk to data-center capacity demand. x.com  x.com 

Apple's roughly 35x forward earnings premium looks unsustainable. If fear around the AI trade fades, its gains could stall or reverse. x.com  x.com