How Much Higher Can Stock Market Climb? | Jessica Inskip
Summary
TLDRJessica Inip, the director of education and product at OptionsPlay and co-host of the Market Maker podcast, discusses the latest earnings releases, stock market outlooks, and the growing role of AI in financial markets. She emphasizes the importance of focusing on AI and technology sector earnings, despite overall market challenges. Jessica also shares insights on the potential impact of the gig economy and the Fed's role in the market, highlighting the opportunities in tech stocks and the transformative power of AI in various industries.
Takeaways
- 📈 Technical analysis of the market shows upward trends with the 13, 26, and 40 moving averages indicating overall market health.
- 💡 Earnings season and AI advancements are potential catalysts for market movement and growth.
- 🌐 The focus on AI and technology sectors is more significant than other industries for future market performance.
- 🔄 Market consolidation is normal and finding support points is essential for continued upward momentum.
- 📊 Earnings revisions and positive quarters suggest a positive trajectory for the market despite some misses.
- 💭 The gig economy and its impact on labor market data could influence the Fed's decisions and market direction.
- 🏠 Housing market considerations and the potential for rate cuts to stimulate supply are important to watch.
- 📉 Inflation concerns and the Fed's balancing act between controlling inflation and maintaining economic growth.
- 🚀 AI's role in the fifth industrial revolution and its potential to boost productivity and economic growth.
- 🌟 The impact of AI on various sectors, including technology, healthcare, and financial services, and its transformative potential.
- 🎧 Jessica's podcast aims to educate the public, especially women and beginners, on financial concepts and stock market workings in a relatable manner.
Q & A
What is the primary focus of the discussion in the transcript?
-The primary focus of the discussion is on the trends in the technology sector, particularly in relation to earnings, moving averages, and the role of AI in the markets. It also touches on the broader market outlook, the impact of earnings season, and the potential influence of the Federal Reserve's decisions.
How does Jessica view the trend of the NASDAQ 100 based on her analysis?
-Jessica views the trend of the NASDAQ 100 as waning, as it is not hugging the higher end of the band. However, she sees this as a normal consolidation phase before the market goes higher, with a catalyst potentially being the earnings season or developments in AI.
What is Jessica's perspective on the overall stock market performance?
-Jessica believes that the overall stock market performance should not be solely focused on the 'Magnificent Seven' stocks. She emphasizes looking at broader participation, such as the S&P 500 equal weight and the Russell index, to get a more accurate picture of market health.
How does the gig economy factor into the discussion of the labor market and Fed policy?
-The gig economy is seen as a potential wild card in the labor market. It could provide a different picture of employment that may not be fully captured in traditional data, potentially leading to a cooler labor market than realized, which could influence the Fed's decision on interest rates.
What does Jessica think about the yield curve inversion and its implications for a recession?
-Jessica acknowledges the historical correlation between yield curve inversion and recession but suggests that this time might be different due to the Fed's quick responses to economic issues and the advancements in technology that provide more tools for managing the economy.
How does Jessica view the role of AI in the fifth industrial revolution?
-Jessica sees AI as a pivotal element in the fifth industrial revolution, emphasizing its role in increasing productivity and transforming various sectors. She believes that AI's rapid development and integration into workflows will lead to significant changes in how we live and work.
What are some potential catalysts for the market to move higher, according to Jessica?
-Jessica mentions the earnings season and developments in AI as potential catalysts for the market to move higher. She also suggests that a shift in the Federal Reserve's policy could serve as a catalyst later in the year.
How does Jessica analyze the performance of tech stocks?
-Jessica uses a combination of fundamental analysis, looking at earnings and growth narratives, and technical analysis, using moving averages to determine trends. She also takes into account the broader market context and the specific performance of companies within the tech sector.
What is Jessica's take on the impact of AI on productivity and the job market?
-Jessica believes that AI will significantly increase productivity and could change the job market by automating certain tasks. However, she also notes that AI could create new opportunities and demand for skills related to its development and implementation.
What are some of the sectors that Jessica sees benefiting from the AI explosion?
-Jessica highlights sectors such as cloud computing, cybersecurity, and semiconductors as key beneficiaries of the AI explosion. She also mentions that AI will impact the technology sector itself, as it can help streamline coding and other technical processes.
How does Jessica's podcast contribute to financial education?
-Jessica's podcast aims to demystify financial concepts and stock market workings, particularly for those who may be new to investing or find traditional financial jargon intimidating. It focuses on teaching in relatable terms and encourages questions to foster better understanding.
Outlines
📈 Market Trends and Earnings Discussion
The paragraph discusses the impact of tech earnings on market trends, specifically focusing on the 13, 26, and 40 moving averages. These averages indicate whether the market is rising or falling and act as support and resistance levels. The conversation highlights that although the trend may be waning, it signals consolidation rather than a downturn. The speakers welcome Jessica Inip, an expert in education and product at Optionsplay, to discuss earnings releases, market outlooks, and the role of AI in the markets. Jessica shares her insights on the importance of earnings growth in the AI sector and the overall positive consumer resilience. The discussion also touches on the broader market performance beyond the 'Magnificent Seven' stocks and the potential impact of the FED's interest rate decisions.
📊 Technical Analysis and Market Participation
This paragraph delves into Jessica's approach to technical analysis, emphasizing the use of 13, 26, and 40 moving averages on weekly charts to gauge market health. She explains that these averages represent one, two, and three quarters, respectively, and their upward slope indicates positive earnings growth. Jessica notes that while the NASDAQ 100 has seen a significant rise, some consolidation is normal. She also discusses the importance of broader market participation, comparing the S&P 500 equal weight index favorably to the NASDAQ 100. The conversation then shifts to potential market narratives supporting bullish sentiment, such as the gig economy and the possibility of a FED pivot. Jessica also shares her thoughts on the implications of the increasing number of people holding multiple jobs, suggesting it could indicate a more resilient consumer base.
💡 The Yield Curve and Economic Indicators
The discussion in this paragraph revolves around the yield curve's inversion and its traditional indication of an impending recession. However, Jessica suggests that this time might be different due to the Fed's quick response to economic issues and the use of technology in resolving banking system crises. She also considers the impact of AI on productivity and labor supply, and how these factors could influence the Fed's decisions. The conversation touches on the potential for a rate cut and its implications for the housing market and inflation. Jessica provides a nuanced view of the economic indicators, highlighting the complexity of interpreting current market signals.
🌐 The Fifth Industrial Revolution and AI's Role
In this paragraph, Jessica introduces the concept of the fifth industrial revolution, characterized by the rise of AI and machine learning. She explains how these technologies build upon previous industrial advancements and are poised to transform various sectors. Jessica emphasizes the rapid pace of AI development and its potential to increase productivity significantly. She also discusses the challenges of integrating AI into legacy systems and the need for guardrails to ensure ethical use. The conversation explores the future implications of AI, including the potential for virtual assistants and the shift in valuable job skills, such as coding. Jessica argues that AI is still underestimated and has vast potential for growth and innovation.
🚀 Tech Stocks and AI's Impact on Subsectors
The focus of this paragraph is on the performance of tech stocks, particularly in relation to AI. Jessica references a Morgan Stanley report that suggests tech earnings have historically been underestimated, leading to significant earnings surprises. She discusses the potential for further growth in AI-related stocks, including those in the semiconductor industry. Jessica also highlights the importance of cloud computing and cybersecurity in the AI ecosystem. She mentions the strategic moves by major tech companies to capture market share in AI and the opportunities for companies like IBM and Google. The conversation underscores the broad impact of AI across various technology subsectors and the potential for continued innovation and growth.
🎙️ Launching a Podcast for Financial Education
Jessica shares the story behind launching her podcast, which aims to educate the masses on financial concepts in a relatable manner. She explains her motivation to shift from traditional financial roles to a platform where she can speak freely about investing. The podcast, co-hosted by a friend, focuses on making complex financial topics accessible, especially to women and those new to the world of finance. Jessica discusses the importance of understanding fundamental concepts like the role of the FED, yield curves, and inflation before engaging in specific investment strategies. She expresses her satisfaction in helping listeners have 'light bulb' moments and emphasizes the podcast's goal to empower individuals through financial literacy.
🔗 Connecting with Jessica's Podcast
In the final paragraph, Jessica provides information on how to access her podcast for those interested in learning more about finance. She mentions that the podcast is available on all major podcast platforms, including Spotify, Apple Podcasts, and Good Pods, and also on YouTube. Jessica encourages listeners to visit their website, marketmakak herp podcast.com, for additional resources and episode equity. The conversation concludes with gratitude for the opportunity to share her insights and a reminder for viewers to follow her work across platforms.
Mindmap
Keywords
💡Tech Earnings
💡Moving Averages
💡AI (Artificial Intelligence)
💡Earnings Season
💡Market Outlook
💡Support and Resistance
💡Gig Economy
💡Fed Pivot
💡Yield Curve
💡Inflation
Highlights
The discussion focuses on the impact of technology earnings on moving averages, which reflect market trends and act as support and resistance levels.
The current market trend is considered waning, but this is seen as a period of consolidation rather than a decline, with the potential for a catalyst like earnings season to push the market higher.
AI and technology stocks are pivotal to market focus, with demand and earnings within this sector viewed as particularly important.
The overall market performance may be skewed by a few large stocks, with broader market indices like the Russell showing a flatter performance over the last two years.
Market participation is key, with technical indicators like the S&P 500 equal weight showing more positive positioning than the standard S&P 500.
The NASDAQ 100 has seen a significant run-up since the beginning of 2023, with the potential for a pullback on the horizon.
The use of moving averages on a weekly basis provides a qualitative quantitative approach to technical analysis, with the 13, 26, and 40-week averages used to gauge market health.
AI is expected to play an increasingly significant role in the markets, with productivity gains potentially leading to a shift in the labor market and Fed policy.
The gig economy may present a wildcard in the labor market, with data on its impact still limited, potentially affecting Fed policy and market sentiment.
The yield curve's inversion and subsequent reversion to normal may not necessarily indicate an imminent recession, as past patterns suggest, due to rapid responses to economic issues.
Inflation remains a concern, with the Fed's actions and statements suggesting a continued focus on reaching the 2% target, despite current rates remaining above 3%.
The potential for the Fed to cut rates is discussed, with the implications for growth and market performance hinging on the underlying reasons for such a move.
AI's impact on productivity and the potential for it to transform various sectors, including financial services and healthcare, is highlighted, with the expectation that it will streamline and enhance many processes.
The importance of cybersecurity and the need for innovative solutions in this area, as AI and technology continue to advance, is noted.
Jessica's podcast aims to educate and demystify financial concepts for a broader audience, particularly focusing on making complex topics more relatable and understandable.
The podcast covers a range of topics from basic financial education to current market updates, providing a comprehensive resource for those interested in finance and self-directed investing.
Jessica's shift from working for larger brokerage firms to her current role reflects a desire to communicate more freely and accessibly about finance and investing.
Transcripts
but as soon as we start ramping up into
Tech earnings that's what's driving that
13 26 and 40 moving averages which
essentially just shows the trend is is
it going up is it going down and it acts
as a means of support and resistance as
well and that right that right now says
the trend is waning because it's not
hugging that higher end of the band but
that just means a little bit of
consolidation we'll find some support
then we just need a catalyst to push us
higher and normally that catalyst is is
the earning season or somebody could
tweet something who knows well we're
joined today by Jessica inip she is the
director of education and product at
optionsplay and the co-host and founder
of the market maker podcast we'll be
talking about uh the latest earnings
releases as well as stock uh Market
outlooks and uh how AI is going to be
playing a bigger role in our markets
welcome to the show Jessica thank you
for being here yeah absolutely it's a
pleasure to be here glad we can connect
and excited for today's conversation uh
thank you very much I've seen you on um
CNBC and Yahoo and yeah you you were
great on other media so I wanted to get
you on my show so thanks for being here
you've also got your own show which we
can uh chat about towards the end of the
um uh interview so stay tuned to learn
more about uh Jessica's uh podcast as
well and uh I want to talk first about
earning so uh a lot of disappointments
from yesterday we're speaking on
Thursday today but the markets didn't do
well yesterday we have a bit of a bounce
today um are you concerned about uh
earnings missing a lot of estimates this
quarter no not necessarily because the
focus is more more on AI and technology
and I want to make sure that I see the
demand there and earnings within that
sector specifically so that is okay
whereas if I see earnings misses and
more and retailers and things like that
that all goes into the broader picture
of the all overall macro environment
where I want to see what the FED is
pulsating so meaning when we go through
earning season not only is it are we
still seeing earnings growth so for
example when we're we finalized q1 and
now getting into Q2 getting those q1
earnings we've had earnings revisions
down but it's not as much and that's
normal so that's a positive sign and
earnings have also bottomed as of last
year since we have positive quarters and
we're still on that trajectory of
positive Porters that still is good so
overall I focus more from the earnings
perspective on that growth picture in
the AI narrative which is seemingly
positive and then I just want to see the
broader participation and then earning
can give us an insight into company's
Health overall consumer spending and
awareness and that that to me still
seems positive we keep saying they're
hanging in there the consumers and they
they certainly are resilient is the word
yeah and certainly you've heard this
before but if you take away the
Magnificent Seven stocks I think it's
maybe just five of them now uh the
broader Market hasn't done as well so
even just looking at the Russell it's
been pretty much flat for the last two
years um bit of a rebound the last year
so how would you how would you respond
to the argument that the overall stock
market isn't really doing that great
it's just a few stocks and you have to
be it's an environment to be really
selective right now yeah so I think if
you're looking at the earnings it we can
pull data and I think paint any picture
we want which is so interesting with the
market mechanics but I I do agree in the
sense from the earnings view but we have
to remember that the Market's
forward-looking and when we look at
broader participation that's when I
focus more on a technical view so
looking at the S&P 500 equal weight for
example that is definitely more
positively positioned from that Ford PE
ratio than the S&P 500 and same with the
russle and so I see broader
participation as in there's demand for
those Securities looking at the
functions of supply and demand versus
the solely just that Magnificent Seven
or that narrow rally that we saw within
the NASDAQ 100 having that natural
rotation as is definitely good now
within the Russell I know earlier in the
year and I was inclusive of this or the
famous Tom Lee coming in and saying
value value value that of course is with
the indication that the FED is going to
cut rates those smaller businesses that
dep are a little more Capital intensive
or need those funds are going to
positively benefit from a less
restrictive Fed so that I I there is
certainly risk there depending on what
the FED does but we still have a lot of
data until we till we get to that point
and really understand it but I still I
see this
as I don't see what we're in this
euphoric phase it's just this natural
rotation that we're having and that's
healthy and I think that's a good sign
and I've really I'm I'm pounding the
table on AI I have for quite some time
and I know we'll talk about that in a
little bit as well yeah we will um let's
talk about the NASDAQ so um a big runup
since all the way extending to the
beginning of
2023 and um I know you've you know
analyzed Trends a lot are we due for a
pullback Jessica yeah so I like to look
at the NASDAQ 100 rather than the NASDAQ
Composite just because the NASDAQ
Composite is a little more diverse now
so if we want it but it tends to leaps
so from a technical perspective I have a
very different charting view than most
people but it it's because it's a I like
to call it qualitative quantitative if
you will okay so I I use the 13 26 and
40 moving averages on a weekly basis i'
normally look minimum to two to two to
three years on a chart and the reason
why I use the 1326 and 40 if you look at
that time frame 13 weeks represents one
quarter 26 is 2 and then 40 is three so
since we look at the markets quarterly
we kicked this off stop talking about
earnings I want to look at the charts
technically from that same type of lens
so if you look at my charts you'll see
the 13 26 and 40 moving averages I want
to see them very simple at this point
just sloping upwards if they slope
upwards that means pric is increasing on
a rolling quarter basis and that is good
indicative of earnings without even
looking at the fundamental aspect I
still see that on the NASDAQ 100 it's
gone a little far and that's okay so on
top of that what I do is I add a simple
actually first technical indicator I
ever learned over a decade ago Ballinger
bands it's it represents two standard
deviations from a price so if you take
the math behind it and you have an
upwards Trend you can utilize that for
strength of a trend because it's hugging
the higher end of the range that's
waning a little bit so consolida
is absolutely normal before we go higher
but if we pull when we started earnings
and what's really accelerated us into
those rally modes it tends to be that
ramp up as we consume that data but as
soon as we start ramping up into Tech
earnings that's what's driving that 13
26 and 40 moving averages which
essentially just shows the trend is is
it going up is it going down and it acts
as a means of support and resistance as
well and that right that right now says
the trend is waning because it's not
hugging that higher end of the band but
that just means a little bit of
consolidation we'll find some support
then we just need a catalyst to push us
higher and normally that catalyst is is
the earning season or somebody could
tweet something who knows what will
happen with AI um we okay so besides Ai
and potentially a Fed pivot later on in
the year uh which we'll talk about what
other narratives are there that could
support this bullish sentiment going
into the rest of uh Q you know Q3 and Q4
yeah so I think there is certainly a lot
with the domestication that we have of
Industrials I think that could certainly
serve as a bullish narrative and also
the gig economy that's something we
haven't talked about I we talk about it
often but there actually isn't a lot of
data on it so I I try to do my research
and dig down through these rabbit holes
and the FED hasn't done a research
report or have the good enough data to
do some analysis since it it was I I
don't have the exact dat off top of my
mind I apologize but it was in the early
2000s area so it's been too much time
but now the gig economy is so much more
prevalent meaning it's all related in in
a way besides I think it's hard to say
besides fed pivot and AI because I think
AI increases productivity which gives us
more balance in the labor market which
could lead to a Fed pivot but then also
the gig economy is could be a different
picture of the labor market that we're
not seeing that could also lead to Fed
stance so it's this big puzzle that
comes together but the gig economy could
be the wild card because we don't have
the exact data of when that filters into
the employment picture because if if you
have that you may your side hustle could
be 1099 and a means of income so you're
not collecting unemployment because
you're not eligible for it and if you're
not collecting unemployment and you're
not eligible for it we're not going to
see you come into the data but if you
lose your W2 income versus your side
hustle or gig economy or those
Freelancers that has a much larger impct
impact on your expenses than the W2 or
then you get what I'm saying so that
that right there could be a bigger
bigger issue that would emerge meaning
we might have a cooler labor market than
we realize which would lead to more to a
a a more likelihood of a Fed pivot and
cutting of rates but it's hard to see
that and that to me is
our something I'm watching it's the
biggest risk but it could also be the
biggest Catalyst um I've seen reports
that uh the US economy has seen the most
number of people holding multiple jobs
at the same time I think you've alluded
to this just now a lot of economists
I've talked to don't see this as a great
sign though Jessica because if you need
multiple jobs you're clearly not doing
as well as you could and the broader
economy isn't supporting that kind of
wage growth that many people would like
to see which is why people need multiple
jobs uh what do you think about that
yeah I mean it's some instances so it
depends on what that is so if you have
multiple W2 income I would argue that
but if you hold multiple as in that 1099
income or you're going into freelancer
that to me is a different type of
consumer base that we have right now
it's a different type of economy jenz is
a completely different animal they are
entrepreneural spirits and they they
don't they're just very different they
consume content differently they aren't
necessarily looking for that normal
corporate job that my generation was
used to and perhaps they saw what we
experience you Millennials are the most
educated generation they also have the
most debt they have the least assets
whereas the entrepreneurs and anything
that could come out of that did better
and they have more easier access to that
due to technology I mean even thinking
about the great financial crisis in 2008
you lost your job you couldn't go you
know get sell affiliate links or get
things like that with on the social
media platforms you couldn't go drive
for Uber you couldn't do these things so
that creates more of a resilient
consumer so I could I could definitely
argue it both ways if you don't have
enough to eat to meet your ends meet and
you have to get another job to support
you that is absolutely bad and I would
see that terrible however if you're on
the younger generation side where you
are on this financial literacy train and
the intent of you getting another job
isn't for W2 but to create a the word is
side hustle for yourself then that
that's a not a bad thing at all yeah
Millennials have pretty much everything
going for them now except homes but
that's a topic for a different
discussion that's so true um how do you
feel about the yield curve having
inverted and then now it's rein verting
if you take a look at just how it's
behaved throughout history every not
every single time but in most instances
in the past whenever the yield curve I'm
taking the 10-year MTH as a two-year as
an example whenever the yield curve has
um inverted to negative territory a
recession usually follows a few months
after that um now the yield curve has
tended to had to reinert back to zero
before a recession officially hits we're
almost there it's almost back to zero uh
is that cause for concern for you at
least as an indicator that a recession
is coming yeah you know it's hard to
argue the the data there and I believe
the average time is 13 months when it
first inverts before we head into that
recession territory but I think it makes
sense to take a step back and I I hate
saying the words this time is different
because I I just I absolutely despise
that but I'm saying it now so uh
thinking about what the yield curve
inversion causes is that credit crunch
or that crisis there or the FED just
moves too far too fast and they tip us
into a recession because they affect the
front end of the curve and what I'm
thinking about what happened is is we
had that with svb and we fixed that in a
weekend I mean I didn't do anything but
the FED fixed it in a weekend yeah
and that's different than past
recessions we've had some time aside
from covid and it it's we do have more
technology we do have access to data the
FED is being more transparent than usual
I think Powell even said this in one of
his earlier speeches where the FED is
really shifting their market dynamics
and I love reading their studies when
you pull them out when that they they
really suff so quietly sometimes but one
of his statements was you know the
market is anticipating our every move
and I chuckled I said well the Market's
forward looking we always anticipating
everyone's every move but it was
something that clicked to him and the
person who is making the decisions about
the rates it's important to take his
mindset aside from my own because he's
going to have the bigger impact meaning
I I think this time is different because
we have had some
negative negative connotation negative
things happen within the economy within
the banking system and they've been
resolved really really quickly and now
since we've have this restrictive
environment the FED has a toolbox so
it's possible that we'll hit that
recession territory but if that happens
I really think that the the fed's gonna
they will step in very quickly and now
they can and that is definitely a good
sign but everything points back to AI
increase in productivity if you started
this hiking cycle with saying we've got
an overheated labor market and all of
the sudden you have this new technology
that increases productivity and we have
a labor Supply issue and now all of the
sudden we have immigration come in I
really think Powell should just play the
lotto at this point is he keeps having
things work for
him he might say that a lottery winning
is only transitory like inflation is oh
there we go speaking of inflation um is
that are we heading down towards 2%
because the data hasn't been indicating
a steepening trend downwards right we're
still above 3% um for both headline and
core and uh I'm looking at the CM fed
watch tool there isn't a significant
probability of a cut even by June I mean
it's it's over 50% but it's not
significant so what's your take on
inflation and ultimately what the fed's
going to do yeah that was interesting we
got the ECB data there was their their
flash numbers and theirs came down
considerably and they also had some
surprises in January and February so
when we get our information perhaps
especially with the Manu manufacturing
that we got yesterday it would be a
little better I don't like being in the
business of predicting that we're going
to get there but what I do want to
consider is his stance and what he's
looking at is he balancing credibility
or what is the give and take at this
point so he does consistently say we're
on emission to 2% I like to call it
Powell for swifties because if you're a
Taylor Swift fan I apologize I'm
bringing it to this but you analyze
everything that that woman says to
understand because they she just caters
to those stem girls we do the same thing
with fed Powell the way that he says
something to indicate what he's going to
do he has consistently said 2% but my
question is what is he willing to give
up in order to get to that place and I
see him
shifting language just ever so SL
slightly which is why I like to relate
it to that
analogy it's a marathon or yeah it is a
marathon we're at that last leg that
last leg perhaps might be the hardest I
don't run a marathon but that's what
people say I'm more of a weights person
but I I that to me is is the hardest
part but we're still on the right track
and he said on the last meeting he wants
to see continuation of the trend that
we're on which means to me that he'll
cut as long as he thinks we're getting
to that 2% and what I think The
Balancing Act and the chess game that
has to happen here he made that
statement that he feels like rents is
going to because of the lag effects that
you're very aware of rents are going to
come in to that data and that's what's
going to help contribute to inflation
actually coming down because we might we
we're seeing that service and perhaps
goods are normalizing at this moment so
services to me is is the risk as they
have been with stickiness but if rents
comes down which really hits people's
expenses that could be really good for
the inflation picture he just didn't
know what the timing was but The
Balancing Act is this housing Supply
issue that we have arguably you're I
mean I I do own a home and I have a 3%
mortgage rate there is no way I'm
selling it I'm going to live here
forever because I don't why would I I'd
end up cost me 40% more to buy the home
that's for sale across the street in my
neighborhood that just logically doesn't
make sense and then you multiply people
like me plus the older generation that
has most of the wealth until they
downgrade which I'm sure will happen an
interest rate cut arguably could help
the inflation situation by creating a
housing Supply well okay
so we're not going to talk about housing
too much but would you be interested in
selling your home suppose mortgage rates
come down to maybe not as close to 3%
but maybe closer to 5% or 4% and
assuming the value of your home has
appreciated significantly you're going
to lock in your capital gains yes you
might pay a little bit more and morgage
uh uh expenses from buying a home across
the street but you're still locking in
gains would you consider that if
mortgage rates come down a bit
more yeah I mean I I personally I'm not
looking to move but if I was absolutely
because that Balancing Act makes sense
okay and and I think that will certainly
help so which which argues could we
could make the argument there that
cutting interest rates getting that
tenure down a little more will
definitely definitely help the housing
market for that reason alone yeah it'll
soften some assets I've heard the
argument as well that the fed may only
cut when he sees signs of a Slowdown in
the economy or when the unemployment
rate goes up and so cutting may not be
actually indicative of growth it could
be indicative of the opposite which
would signal perhaps a correction in the
stock markets if he's cutting for bad
reasons right yeah that's such a great
statement it's the why there's I get so
many questions on that do you so if the
fed's going to cut Jessica are are the
markets going to Surge well it depends
on the why why are they cutting
get absolutely very beautiful Point
speaking of Taylor Swit I think her AOS
tour generated five billion dollar for
the for the economy could be funny if
that's the reason fed's the fed's not
cutting it's because Taylor Swift is you
know actually contributing to growth um
but I digress um okay there's studies on
that there's studies on that okay I'm
sure you've looked into those studies um
so ultimately um okay let's talk about
AI now you uh you submitted a piece to
me thank you for that and you've talked
about how we're currently in the fifth
Industrial Revolution tell us about your
thesis
there yeah so there has
been so thinking about the revolutions
that we've had it's
compounding where if you look at the
movement that we have had when we just
had railroads or water steam and
mechanization and those assembly lines
they were building on one another that
ultimately grow in compounds so going
back to the 1800s I don't think we have
to go through them all individually but
perhaps the 2000s there we had a dotom
bubble in the 2000s is because we had
companies we did not understand somebody
put.com behind their company name
everyone was excited about the internet
from a valuation perspective it was very
difficult to valuate because we didn't
understand the revenue drivers that were
there fast forward to today we use the
internet in the worldwide web absolutely
everywhere in every single vertical with
every way every shape and formed which
is proves that point of compounding
2010s is when we got to that networking
and machine learning meaning now we're
at this different place where has
compounded where the framework has been
built via the Internet computers
electronics and introducing Automation
and now we have machine learning and now
we have extremely smart now we're
getting in the 2020s of self-learning
cognitive collaboration of machines and
there is so much that that can do was
coding is being taken away and that l
language will soon be human I think it's
interesting it used to be so valuable to
have the skill python on your resume
that's of the shift and we have to shift
with those revolutions meaning there's
this wonderful piece that I sent to you
or the screenshot from Morgan Stanley
where they were going through these
previous revolutionary periods and it
was 38% that analyst weren't projecting
because it's difficult to evaluate but I
think the difference of difficult
evaluation vers versus the 2000s and now
is these are mature companies not with
clear paths to profitability not
companies that are in a garage with DOT
trying to figure it out which we know
Apple started there at some point but
this this is different for that reason
alone and we are seeing real demand
which translates to real Revenue yes a
lot of it is forward-looking and there's
the supply chain issues and things of
that nature but there is so much
underestimation I believe within this
entire entire AI because it also moves
so fast once I feel like I learn how to
do something within AI there's a new
Plug-In or feature that I have to figure
out and that is good but that also means
that we have we haven't even tapped into
it
yet can you give us a glimpse of the
future I think most people watching the
show who aren't content creators or
maybe work in finance professionally
haven't really integrated their workflow
with AI yet um think about if you're
working in an office and you've got
Legacy systems that are in place you
don't have to switch right away and so
most people don't use AI as much as um
some others and so uh it's difficult for
many people to understand exactly why
there's this big hype around it can you
just give us a sense of how our lives
could change in the next 5 to 10 years
absolutely so having a your own virtual
assist would be a piece of it but having
guard rails as well where you can make
your own type of collaborative type of
experiences so think about let's go real
back in time if you're a member on
Microsoft products I'm also advocating
for this if you remember clippy yeah I I
I knew you were going to say that as
soon as you said
Microsoft clippy I loved clippy I really
think they should be bring clippy back
that's where copilot should be be be
amazing um nonetheless I digress but
clippy help that that was a new
iteration within a magical tool that we
had where you could instead of a
typewriter we're writing on the computer
it's saving time that's why it's a
productivity increase so if we moved
from a typewriter to a computer to
utilizing a Word document you don't have
to erase things you just backspace it so
now we're very quick and then if you
don't understand how to use it oh you've
got clippy who can help you when you
search and ask but you have to be very
specific within the commands clippy is
not a person so now there is a tool
where if you want to learn think about
it integrated onto your computer and
there are versions of that already and
you could set that up if you know how to
integrate very well where you could just
speak to someone that could go through
your data and understand what's needed
there or you could say I have all of
these files on my desktop and you could
do this today if you want can you please
find any research that I have done on
artificial intelligence put that
together on a Word document and then
summarize the bullet points for me that
is incredible and that that is a very
small use case there's Automation and
triggers where you can have it do one
task learn to do another you can give it
guard rails and then it can train itself
so where that's where AI is right now is
on that inference and acceleration piece
where it it you teach it to train itself
which is scary in its own way shape or
form but if you think about what it is
it mimics human behavior so so even for
I was working on some research yesterday
I had it create an infinite um and I got
this from somebody uh I I wish I
remembered his name so I can give him
credibility right now but I I'll send it
to you afterwards called it the infinite
focus group where I had chat gbt give me
uh for something I was looking to work
on a list of people that would be in
that focus group and it was my podcast
and I said okay what are they going to
why would they want to listen to my
podcast give me their demographic where
they are their family things like that
then I said hey very humanely very
humanely it be nice to to chat GPT I
want you to inject some truth serum in
them and we're going to have a
conversation and I want to know what
their trepidations are really that they
wouldn't tell in in front of that Focus
Group in front of people and then I got
a very different response which turns
into marketing gold so meaning there's
just so many use cases that you can
utilize purely from its implications
today but it it can analyze
very very quickly which is such an aid
to productivity and I believe there was
uh this this study was about six months
ago the people who use AI tools right
now are 40% more productive and that's a
very small use case of people so imagine
when that's more widely adopted and put
into those bigger corporations which is
in the works that takes some time if you
ever worked on the procurement side it
takes a while while to to get those
things across the line but once they do
then we're going to really see some
changes ultimately investment
appications yeah I mean have we missed a
boat on companies like Nvidia perhaps we
haven't gotten in but are the
fundamentals still there for
growth I I think so I mean there is
definitely some demand Po and they're
constantly constantly innovating and I
think that is good to see their uh uh
the uh their their blackw chip that
looks promising they also another one
that could integrate directly onto your
computer so now your computer is AI that
the cooling of chips so they're taking
all of their problems and they're also
looking to solve them as well and so
it's not just one product that is
necessary and also the AI pool is a
really big pie and we have a sliver of
that pie which means there's still
market share to go around there's still
lots of innovation that's needed and as
long as they're still innovating then I
do believe that there's still
opportunity there well you've done
actually some calculations uh you've you
basically have a table of tech stocks
and it says here the average of every
stock mentioned has beat earnings by
32% and um the conclusion is based on
the underestimation average we have
another 11% on average of earning
surprises to the already revised higher
can you just tell us walk us through
what you did
there yeah absolutely so that was based
on the Morgan Stanley report where they
said the earnings estimates were
constantly beat for previous Evolutions
or revolutions if you will so going back
to that do area that was about
38% so if we're at and this so I used
the 32% is including penist because they
were an early adopter I want to take
that out because that was a skew of aund
or two 200% and that that just Skuse the
data so um if you take that out we've
got about another 11% focusing just on
AMD Nvidia Microsoft Google meta and
Amazon so that that's where that came
from since those are 177% all right now
and if the average is a 38% surprise
yeah the difference there is 11% of
growth ultimately which Subs sector of
tech would benefit most from the AI
explosion besides let's say
semiconductors yeah so I actually still
like Google Amazon is just popped up on
my list as late um because of the
different touch points that are there so
Google was my first pick a while ago
because when you look at how to build a
large language model they had most of
the touch points and what I find very
interesting is the VC funding and I I
don't know if you've um seen any
research on this but they basically fund
themselves in a way it's this circular
Capital as in they're investing in those
companies that have ai and they give
them Cloud credits and since they're
investing in them then they capture the
revenue on it as well so it's like
circular Capital within that way the
major ones are doing that but and and
all of them require Nvidia which I find
very interesting if you have the cloud
you know you have to have so either
you're going to pay that really high
price point for the Nvidia chip or
you're going to use something that has
Cloud that already buys that Nvidia chip
that you're going to need for those
large language models so there's lots of
solutions that are there those are the
obvious but I think it's going to shift
so we start with building those models
that is that that that starting point
the infrastructure and then it's the
implementation so those that I think are
going to emerge are the ones that take
the headwinds and make them Tailwinds so
now that we've got this grid issue
there's opportunity there cyber security
is going to be extremely important
opportunity there the cooling that we
need it requires a lot of Commodities
that's opportunity I I flagged IBM uh I
feel like that was about yeah that was
last
year
yeah um IBM I think is also a really
good opportunity because the way that
they've researched Watson X they they've
had some earning surprises but they also
have a lot more demand and that just the
increas is is amazing so besides just
the semiconductors there is a lot of sub
seor s that will fees out really really
well for AI but I think the biggest
sector that's going to have an impact on
AI and this not for the reasons that you
think is technology meaning because it
can write code itself it's going to
streamline technology even more so not
just AI itself it's the implementation
because now I'm looking into the
implementation into Financial Services
into Healthcare and and with the largest
data set but the largest data set is in
fact technology I I know so I I know
Engineers are working on ways that AI
can help us code in English in plain
English which would be a complete Game
Changer because you no longer have to
learn a language anybody can code uh
that would really re yeah that would
really change things speaking of jobs
that could be taken away from AI I hope
podcast hosts isn't one of them um and
that leads to our next discussion you
have a podcast yourself so you know not
a robot can't replace Jessica and your
co-host uh at least not yet tell us why
you launched your podcast and what
that's all about yeah absolutely and
thank you for asking I I sincerely
appreciate that so I I've worked in
finance now for about 15 years which is
unbelievable to me and I made this
really big career shift never forget the
day February 22nd of 2022 where I uh
stopped working for the bigger brokerage
firms and I I work for a vendor called
options play and that allowed me the
opportunity to not be constrained by
Financial licenses and for lack of a
better word say whatever I want sure so
so uh my friend I've always taught her
about self-directed investing but
obviously you can't talk about that on
social media when holding those type of
licenses that I did so I'm I'm no longer
licensed voluntarily and she had this
idea that said hey Jessica every time
you tell me something I tell other
people and I know more people can
benefit from this and on top of that
I've been the first female in a lot of
places
and where I find that the investing Gap
is derived from it's not
that it yes it is an oversaturated
Market with men but men have to talk
about stock market do not if you ever
meet a a Wall Street bro as they call it
they don't they don't shut up but what
happens when they try to explain it to
you it's in relatable terms not to me I
don't know anything about football and I
don't really care about it I I I don't
get it because it's not my language and
so that's what our podcast is is it
shifts it from that type of language to
just something that's a little more
relatable to women on the the mass and
he she's the as well anyone is is here
to listen but we break down how the
stock market works in those type of
terms so I teach her I she says that I
made the biggest risk because I gave up
my licenses and talk about it but I
think she took an even bigger risk
because she sits there live and say is I
don't understand how this works break it
down again and it takes a lot of Courage
for someone to say I don't understand
that I don't understand that but the
results been and all of our feedback is
thank you for asking the questions that
I'm too afraid to ask I finally get how
it works and it's been so rewarding not
only getting that feedback but watching
her progress even we did a recent
episode on how to lock in higher rates
using a CD ladder and using treasuries
and things of that nature but before we
even and that's the first time we
physically placed a trade because it's a
self-directing investing education
podcast that was episode 31 she needed
all of that primer beforehand to
understand who the FED is what they do
what an inverted yield curve is even
what the treasury is with supply and
demand and the debt ceiling and and all
of that and understanding inflation to
get to that point as to why that's
needed and I just love those light bulb
moments so if you tune into to that I
know that was a long answer so I
apologize corrupted your friended now
all that all she's going to talk about
at dinner parties is the fed and then
inverted y curves and CD ladders so yeah
that it's possible yeah you've changed
her life For Better or Worse who knows
um but certainly we'll tune into that uh
that is so but but I mean presumably
this could be for anybody who is
interested in finance who is just
starting to learn right it doesn't um it
sounds like you're just educating the
masses about basic Financial
Concepts yeah we still do stock market
updates absolutely absolutely so so we
bring it all together so this is how it
works but here's also how it works today
and then also what's happened in the
past so it's definitely ramping up there
and it and she comes with questions so
there was a uh question that she had
about dark pools and how they work so we
went into detail and we talk about dark
PS we so it it's definitely relevant to
today we haven't gotten any technicals
or anything too deep just yet but if you
want to learn how the stock market works
from start to finish that's absolutely
the in the intent of it okay well uh
where can we uh where can we find this
podcast and follow your work on other
platforms as well yeah thank you for
asking so it's available everywhere that
a podcast is streaming on your favorite
podcast app I probably can't even name
them all so it's on all the major ones
of course Apple
Spotify uh good pods even Google podcast
just went away so you can find us on
YouTube music and we do also upload to
Youtube We haven't put our RSS feed into
YouTube music because we want to keep
the video there so know that so I
definitely recommend the best place
would be Spotify or good pods but we
also have a website it's called Market
makak herp podcast.com and there every
episode we include what's called episode
Equity where if it needs a supporting
article we'll put that there anytime
that we have additional takeaways that
goes into our blog which is called our
dividends we have lots of fun with the
names you can see okay
okay yeah I'll definitely will put the
links in the description down below so
make sure to follow Jessica and her work
there thank you very much for your time
we'll speak again soon yeah thank you so
much it was a pleasure I really enjoyed
it yeah thank you for watching don't
forget to like And
subscribe
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