The commentary lands in a market that had become volatile in recent weeks as investors grew nervous about the impact of tariffs on the economy (Image source: Bloomberg)
Anyone looking to bet against US stocks this month would be wise to consider the strength of the American economy and ongoing enthusiasm around artificial intelligence.
That's the view at 22V Research, where strategists say an increase in consumer spending and investments in AI are likely to support productivity, allowing firms to deliver the profits needed to power stocks higher.
The commentary lands in a market that had become volatile in recent weeks as investors grew nervous about the impact of tariffs on the economy and monetary policy at the same time that spending on AI seemed to become untethered to profitability. The S&P 500 Index fell as much as 5.1% from its October record before staging a rally last week -- underscoring the perils of shorting a market prone to big swings.
"Being short here requires high confidence in a much weaker economic backdrop or a significant change in the outlook for AI capex," according to strategists led by Dennis Debusschere, co-founder and chief market strategist at 22V.