Elections and AI

Last week saw a huge rally in the markets on the heels of the election news. The Nasdaq, S&P 500, and Dow Jones all reached new record highs. The S&P 500 sector winners were Consumer Discretionary and Information Technology, while Utilities and Consumer Staples led losses. Along with the record highs came continued optimism surrounding artificial intelligence.

Weekly Performance

Data Source: Factset®        Performance Period:      11/4/2024  to 11/8/2024

This past week’s economic calendar brought several new readings along with the U.S. presidential election results. Factory orders for September decreased by half a percent. On Tuesday, Services PMI for October had a reading of 55, about a third of a percent below expectations. Initial jobless claims came in at 221,000, a bit higher than the prior week’s reading. Wholesale inventories lowered 0.2% in September, slipping a little more past August’s 0.1% drop. Perhaps more impactfully, the FOMC decision on Thursday was to cut interest rates by another quarter of a percentage point, down to 4.75%. Consumer credit for September was indicative of a more cautious consumer at $6 billion, significantly below the anticipated $12.2 billion reading. On Friday, consumer sentiment rose to a reading of 73, a seven-month high.

This week brings the NFIB optimism index, a measure of what small business owners are anticipating in the economy.  October’s consumer price index (CPI) reading, an inflation indicator on consumer prices, comes on Wednesday. The producer price index, another inflation metric, is slated for Thursday along with initial jobless claims. U.S. retail sales, industrial production, and business inventories finish out the week on Friday.

The role of artificial intelligence (AI) in the markets has been significant this year. Nvidia made news by replacing Intel in the Dow Jones Industrial Average. Intel’s value has deteriorated by nearly half this year, while Nvidia has soared about 200% year to date. The company has been a key player, as a major supplier of chips that allow for AI processing. Customers of Nvidia include other large technology players like Microsoft, Meta, Amazon and Alphabet. Not only is the chip maker a leader in supplying such major clients, but it also surpassed Apple’s market cap last Tuesday to be crowned the world’s most valuable publicly traded company. Another major player in the AI space is Palantir, with a focus on data and software. This company’s strategic partnerships offer insight into the practical uses of AI. Palantir’s Artificial Intelligence Platform is currently making Wendy’s supply chain more efficient so that it is well stocked without wasting costly inventory. The platform is used by other food companies such as Tyson Foods and General Mills. Palantir has also gone beyond the corporate world with its classified data insight offerings to government agencies for intelligence and defense purposes. Just as AI empowers businesses to better meet the needs of customers, God infuses his people with gifts to meet the needs to others. As 1 Peter 4:10 states, “As each has received a gift, use it to serve one another, as good stewards of God’s varied grace.”

Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights

 Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights. Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Investment advisory services offered through Faithward Advisors LLC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Dream More, Plan More, Do More is a registered trademark of Faithward Advisors, LLC, Reg. U.S. Pat. & Tm. Off. Any opinions expressed in this forum are not the opinion or view of Faithward Advisors or American Portfolios Financial Services, Inc. (APFS). They have not been reviewed by either firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.