Join our daily newsletter At The Bell to receive exclusive market insights
The President of the United States has made much of the Dow Jones notching a fresh record high of 50,000 recently; too bad it’s a basket of 30 bluechip companies. What really matters is the S&P 500 and the NASDAQ, and there, we’re seeing some cracks start to appear.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
What the hell is an AI agent?
‘Agentic AI’ – which is what you get when you combine ChatGPT with a program that allows it to go out and do stuff on its own, say, collate data without being prompted to do so – is currently the big investing topic for the yanks (and, thus, ourselves too).
I’ve already written, a few times, that what we’re seeing is a perceived risk that the rise of Agentic AI will ultimately impact a litany of software companies raking it in on SaaS models – Salesforce, and, yes, Australia’s own Wisetech.
So the tech trade is cannibalising itself; and the golem that was created by the Mag7 is now coming not only for software makers, but its originators, too. Check out this ETF’s 6mth performance:
Possibility becomes truth
This fear is, basically, unfounded. But the world of AI has long been waiting for something other than a chatbot (autocorrect on crack) to rear its head, and it looks like ‘AI agents’ might be getting to a point where they don’t stumble through basic tasks.
Perhaps because the average intellectual bar is so low, the idea of this being a real threat to software margins isn’t entirely irrational. But that’s only if the bar is at eye-level.
(I don’t mean to sound arrogant, but it really is something.)
Still, maybe these jitters are compounded by the fact the gold price appears to have decided that US$5,000/oz is enough silliness for now.
We haven’t heard about a fresh gold ATH in the last two weeks or so, and while some point to a slightly-cheaper USD, I’d argue the market collectively might be deciding that Trump 2.0 might not threaten America’s future.
Of course, Trump has tried to ink a deal with Russia that would see the latter step away from BRICS this week, but I’ll wait to see if that turns into more than just fluff before I waste time thinking too much about it.
Rare earths could be a go
And while we’re looking at pictures of lines, here’s another one that has caught my eye – rare earth Neodymium (basically the only REE for which there are futures and sets the price for a whole basket) is on the way back up.
Looking at this 5Y chart, we can see that the price of Nd has returned to its late-COVID highs. Clearly, it hasn’t taken a cue from the price of gold that the metals rally is taking a breather.
So far, we aren’t seeing a surge across REE stocks, but I reckon it’s coming. When? Who knows. Many in the market are still probably busy wondering what to do about its bagholdings in silver, and not feeling too confident right now.
But if NdPr can keep growing, we’ll see it happen, sure as day. What else can we be sure of?
US inflation to set tone for March
For one, people will be closely watching the US inflation read we get tonight. Everything from CME Group’s FedWatch to the prediction market Kalshi currently tip a March hold; but a surprise inflation result may or may not get brains readjusting March FOMC expectations.
That could cause some excitement, though, one would need to believe the US inflation data is impartial and hasn’t been massaged to appeal to Donald Trump, which is a real threat nobody seems too worried about. Yet. (This week, Gallup stopped reporting on Presidential approval ratings after 90 years, just because it felt like it, surely.)
For the hell of it, Bitcoin still having a bit of a slump, too, evident on the six month chart below.
What interested me most about this week, however, is that we saw uranium prices drop and uranium stocks on the US go up.
Uranium marries tech trade
Here’s an example of the AI narrative, or trade if you prefer, that isn’t disembowelling itself: Mag7 companies are coming out and saying that they’re going to start operating nuclear power plants to run data centres.
Meta – down nearly -20% over the last six months – has got the idea in its head it knows how to restart abandoned powerplants, and so the company is planning on doing that. What could go wrong.
Anyway, this very-media-friendly push by Meta, Google, Microsoft and others, to run data centres on nuclear power, has done what it was intended to do: caused hype.
(How helpful that they have an answer for the electricity demand needed to fuel AI! How helpful also that now they can be seen to be green-friendly! And isn’t it just convenient that will almost definitely afford them R&D tax rebates!)
If you’re detecting worse-than-usual cynicism from me today, you’re right, so I’m ending this here, because it’s been a bit of a boring week really, ignoring the CBA result.
My emails are always open. Send me a stock tip, and don’t you dare mention a word about Valentine’s Day. This finance journalist will be licking his wounds in a cave and doesn’t to talk about it.
Join the discussion: See what’s trending right now on HotCopper, Australia’s largest stock forum, and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
