Mayfield: The sign we're not in a bubble is the level of skepticism being levied at OpenAI

Frank Holland (Anchor) 00:00.070

micron moving higher it's actually our biggest gainer on the SP this morning up just about ten percent it seems like it's gonna give some more confidence to the AI trade but it's been a bit wobbly how are you doing this micron report and then some of the other concerns whether

Frank Holland (Anchor) 00:12.470

it be amazon and its potential deal with open AI or the blue owl oracle situation how are you viewing the AI trade as a whole right now

Ross Mayfield (Investment Strategist) 00:20.730

yeah i would say zooming out i'm i'm i appreciate the skepticism the market is levying at some of these deals i i think the sign that we're not in a bubble is the level of skepticism you know levied at open AI from their debt deals from some of these more questionable circular

Ross Mayfield (Investment Strategist) 00:36.770

spending deals it certainly hasn't stopped price gains in some of these stocks AI is still in our opinion a transformative technology but i think the thing that keeps this bull market from at least being a bubble yet is the very you know healthy aimed at some of these deals i

Ross Mayfield (Investment Strategist) 00:52.430

would also say you know as we move into year four of a bull market the dispersion between winners and losers and particularly as we focus more on the fundamentals rather than just a rising tide that lifts all boats and multiple expansion is natural so you're going to see your

Ross Mayfield (Investment Strategist) 01:07.110

winners you know the ones that are are growing earnings and providing good guidance and you're going to see your losers oracle kind of lumps in that later category right

Frank Holland (Anchor) 01:13.710

now all right so how does healthy skepticism work with what some people believe is the unhealthy concentration in the market if you're looking at AI stocks they're now forty six percent of the SP just for reference if you look back in twenty twenty two same month it was only

Frank Holland (Anchor) 01:25.670

about twenty seven percent so if we have healthy skepticism how does this bull market continue when so much of the market is tied to AI

Ross Mayfield (Investment Strategist) 01:34.740

yeah well i would say look at the last six to eight weeks right AI has been under fire and we've still seen some nice market gains especially in the equal weight in the russell two thousand and abroad so it's been a pretty broad market obviously the concentration can obscure

Ross Mayfield (Investment Strategist) 01:48.500

what's going on under the surface but for stock pickers for people who are not just passively invested in the SMP you've seen strong gains from things like industrials financials consumer discretionary providing a spark of life and as was mentioned earlier abroad so it it has

Ross Mayfield (Investment Strategist) 02:04.160

been a broader market then i think the headlines would would indicate and i think that's really healthy heading into twenty twenty six and we expect the fundamentals to kind of follow in suit all right

Frank Holland (Anchor) 02:12.870

how do we just judge where investors are when it comes to risk in this market it seems like the AI trade has got a bit riskier wolf actually out with a note saying a crypto winners coming is bitcoin and cryptocurrency is that something we should be looking at as a gauge of

Frank Holland (Anchor) 02:24.350

sentiment and the direction of the market we have people like tom lee telling us just a few weeks ago that well crypto leads it actually leads the market at least leads the nasdaq it doesn't seem like that correlation still exists

Ross Mayfield (Investment Strategist) 02:35.470

yeah it's tricky i mean i've i've i've typically thought of bitcoin and crypto as both a little bit of a sentiment and and a liquidity indicator and i think that the story of twenty twenty six is going to be about abundant liquidity both from ray cats and from a lot of stimulus

Ross Mayfield (Investment Strategist) 02:47.950

coming from the one big beautiful bill so i do think that there could be a boost to some of those more liquidity driven assets as we move into twenty twenty six sentiment for me is is is the biggest near term risk to the market in in Q one in particular you know if you look at

Ross Mayfield (Investment Strategist) 03:02.990

the survey data we're getting bullish if you look at some of the the IPO headlines i mean that's certainly has a correlated to the late nineties that that screams bullish and then if you just look at the the strategist sell side targets mean S and P eight thousand S and P eighty

Ross Mayfield (Investment Strategist) 03:16.270

two hundred these are the kinds of things that start to raise you know flags in in the head i i don't think it's a a structural risk but near term for sure we'll reset things and then i think the bull market continues into year

Frank Holland (Anchor) 03:28.350

end all right JP morgan is actually out with his twenty twenty six outlook one of the things they talk about is the weakness and the labor market another issue potentially could be inflation going to get that read coming up later today as you look at the equity markets not the

Frank Holland (Anchor) 03:40.270

economy but the equity markets how concerned are you about potential stagflation or at least considerable softening of the labor market while inflation is stickier

Ross Mayfield (Investment Strategist) 03:48.860

i think it's a concern but at this point you know the market is pricing in one to two more rate cuts so it's not like the market is entirely dependent on the fed easing narrative heading into twenty twenty six so if inflation proves a little more structural or sticky as we've

Ross Mayfield (Investment Strategist) 04:02.780

seen and the fed decides to be a bit more hawkish than is priced in you know that'll cause some volatility and some chop but i don't think it's the biggest thing that the bull market is built on you know especially as as we've gotten through most of this rate cut cycle you know

Ross Mayfield (Investment Strategist) 04:15.660

we're down you know two percentage points so i don't think it's the biggest you know tailwind to the market at this point as far as what we're watching you know oil prices right now kind of plumbing four year lows i think are really important more so than the the headline CPI

Ross Mayfield (Investment Strategist) 04:30.110

number for consumers