What we’re reading (2/18)
“What The 10-Year Treasury’s Move Toward 4% Says About AI Anxiety In Markets” (MarketWatch). “The S&P 500 index on Tuesday finished only about 1.9% off its record close from late January, getting an afternoon boost from a bounce in tech stocks after a brutal patch. Concerns around AI no longer are limited in scope to potential overspending on artificial intelligence from a small group of high-flying tech companies. There’s now also plenty of angst around AI threatening to make whole industries obsolete and risking white-collar jobs in the process. ‘It seems that nobody knows what the world really looks like a year from now when it comes to AI,’ said Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute, in a phone interview Tuesday.”
“Is The Stock Market Peaking?” (Alhambra). “I’m sure they wrote about what they see as a genuine risk in “the market” if it is defined as the S&P 500. That’s the way I see it too; buying a highly valued, concentrated portfolio of stocks is riskier than owning a more diversified, less concentrated portfolio. My concern with this dismissal of that risk, by Mr. Zweig and plenty of other investors, is that I worry they want to do the easy thing – just buy the S&P – because it’s been working. At least until recently. Over the last six months, the S&P 500 ranks at the bottom of my above chart of random asset returns, most of which are just other equity index ETFs. US small cap value, international value, international core, US large cap value, midcaps, European stocks, and even REITs have all beaten the S&P 500.”
“Top Lawyers’ Fees Have Skyrocketed. Be Prepared To Pay $3,400 An Hour.” (Wall Street Journal). “Just over a year ago, the going rate for a top lawyer was in the $2,500 an hour range. Now that looks downright quaint, as premium partners are raking in as much as Clark—and far more in some cases. Legal fees have risen much faster than inflation for years now and corporations are trying to rein in spending by pressuring law firms to use artificial intelligence for routine tasks and keep associate fees in check. The same isn’t true at the top end, where star trial lawyers, rainmaking corporate dealmakers, and veterans of Supreme Court oral arguments are driving more aggressively on pay than ever and meeting little resistance. ‘The question is always, are they worth it? You know, some of these guys are worth it,’ said Kerry McLean, Intuit’s general counsel, who in her role hires law firms to do the company’s outside legal work.”
“Oil Holds Biggest Jump Since October On Iran Conflict Concerns” (Bloomberg). “Oil steadied after its biggest daily gain since October, following a report that American military intervention in Iran could come sooner than expected.”
“Apple Decouples From Nasdaq, Offering Alternative To AI-Fueled Volatility” (Bloomberg). “Apple’s 40-day correlation to the Nasdaq 100 Index tumbled to 0.21 last week, the lowest since 2006, according to data compiled by Bloomberg. Its correlation with the benchmark has been on the decline since May, when it reached 0.92, as Apple’s decision to mostly sit out the AI arms race has turned it into an outlier compared with many of its rivals.”
