Overnight US markets were slightly softer with the S&P 500 down 0.74% and the Nasdaq down 0.86%. In what seems as an unusual thing to say, there was no major news from the Trump administration.
At home yesterday, local markets were encouraged in the afternoon by the 0.25% interest rate cut from the RBA. The market closed up half a percent. The rate cut saw interest rate sensitive areas do well, such as real estate, with the sector rallying 1.4%. Consumer discretionary also rose modestly by 0.69%.
- S&P 500 = -0.74%
- Nasdaq = -0.86%
- Aussie dollar down 0.6% to 64.16US cents
- Iron down 0.3% to $101.50 US a tonne
A tale of two retailers
In the US Home Depot Inc (NYSE: HD) (can anyone confirm for me if you can get a sausage at Home Depot?) reported and in contrast to Walmart Inc (NYSE: WMT) a day early, said they would not be raising prices due to the tariffs. On an investor conference call following the results, Home Depot executives stated their supplies had moved sourcing across multiple countries and there won’t be a single country that makes up over 10% of its stock.
It will be intriguing to watch how other major US retailers continue to deal with the tariff situation.
Has Google fallen behind in the AI race?
A Rask Community member sent me this podcast over the weekend with Alphabet Inc Class A (NASDAQ: GOOGL) CEO Sundar Pichai. Pichai made a great case for why Google wasn’t falling behind in the AI race.
He spoke about the invest the search giant had made in infrastructure over decades but what was compelling to me was his pitch about the ability for AI to work across their full product suite.
It made a lot of sense. I use Gmail for all my email, work and personal. I use maps everyday, I browse on Chrome, I work on Google Docs, Sheets, etc. My working adult life – at very least the last ten years – can be seen in the Google suite of products. Having AI functionality that can find commonalities and work across all these platforms with my history should be incredibly powerful.
But then, just yesterday, I write an email to someone and Gmail tries to help by completing my sentence…
Look…it’s a work in progress.
Alphabet stock has been the weakest of the FANG group. Its down 7.34% over the last twelve months, whereas its FANG cohorts are up by that at a minimum.
A mini AI arms race portfolio
Yesterday I sat down with Billy Leung from Global X for one of our Satellite Sessions. These are events I am trying out, just for our Rask Core, Invest and Community members. Exclusive Q&As with some of our regular guests.
It would be an understatement to say Billy was still enthusiastic about AI as an investment case. We spoke about satellite tilts you could put on your portfolio and he made a compelling case for creating a three ETF AI sleeve within your satellite exposure:
- Global X Artificial Intelligence ETF (ASX: GXAI) Holds companies that stand to benefit from advances in AI and are also involved in the development of hardware that enables the use of AI
- Global X Artificial Intelligence Infrastructure ETF (ASX: AINF) This ETF takes the AI thematic even deeper, looking down the value chain at the suppliers, commodities and utilities needed to support the AI arms race. Think electricity providers, providers of cooling equipment for data centres, copper producers etc. During the resources boom this would have been considered an ETF for those mining services companies that did so well.
- Global X China Tech ETF (DRGN) China has awoken in a big way and has made dramatic steps forward in tech innovation. This is a pure play, concentrated tech ETF giving exposure to 20 companies leading the way in semiconductors, robotics and software.
I’ll leave it here for today, but as always, you can reach me via the chat in the righthand corner, the Rask Community or over on Rask Invest.
