Chip stocks have captured the attention of investors after becoming the heaviest-weighted sector within the S&P 500 (^GSPC) for the first time in history. BMO Wealth Management US Chief Investment Officer Yung-Yu Ma joins Morning Brief to share his insights on the market outlook.
Ma suggests that "the enthusiasm for AI is going to come and go in waves," acknowledging the unpredictable nature of sentiment shifts in the sector. He notes that it’s "difficult to predict" exactly when and what developments will influence investor sentiment. While Ma believes that the "productivity gains and benefits from AI" will be enough to sustain continued gains in companies that contribute to the technology, he anticipates "a choppy path forward."
Regarding market rotation, Ma expresses concern about the current trend, stating: "It’s certainly concerning in the short-term that we’re seeing a relatively narrow market, and that narrowness has been increasing recently and really driven by fewer stocks… that’s not what you want to see for market health."
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