There is room for stocks to run: Strategist
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The three major indexes (^DJI,^GSPC, ^IXIC) closed lower on Thursday after another hot inflation print. U.S. Bank Asset Management Group Chief Investment Officer Eric Freedman joins Yahoo Finance Live to provide insight into the market action.
Addressing the AI industry, Freedman notes "a really tight supply" in AI services, stating that producers cannot get their products to market fast enough to meet the soaring demand. He further emphasizes that demand will remain steady as companies invest in becoming "bigger, stronger, faster" through the implementation of technology to increase efficiencies.
Expressing optimism, Freedman declares "there is room to run" for stocks and with the Federal Reserve's anticipated rate cuts on the horizon, he views this as "a good opportunity to stay involved or get involved if you're not involved."
Regarding the Chinese markets, Freedman acknowledges their upward trajectory, stating, "it's been down so much," and deems the "consolidation makes sense," despite the less-than-favorable data coming from the region.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Angel Smith
Video Transcript
JOSH LIPTON: Meanwhile, the markets under pressure today, but year to date we've seen all three major indexes reach record levels with the S&P already blowing past some Street estimates. Thanks to a solid earnings quarter and the AI rally, there's been talk of a bubble we know popping at some point. But our next guest believes there's still more room to run.
Eric Freedman is the US Bank Asset Management Group's CIO. Eric, it's good to have you on the show. So maybe we just start there because that's certainly a question that's been raised, Eric. People, they've been looking at NVIDIA and this AI rally and hearing these questions. Maybe we're seeing a bubble, but you don't think that. Things don't look bubbly to you.
ERIC FREEDMAN: They don't. And Josh, thanks so much for having us on. Look, as someone who lived in San Francisco during the dotcom rise and fall, maybe I'm a bit jaded by what a real bubble looks like. We think there's just a really tight supply of services in AI right now.
Specifically, if you look at the core producers, the OEMs, if you will, they just can't get product out fast enough. And so we do think that demand will be steady. And if you also look at what backs up this AI move, it is continued corporate CapEx. Companies are looking at bigger, stronger, faster. They're not doing that through hiring more people.