There’s a big question hanging over the stock market’s huge 2023 comeback: Does it have legs? Rising interest rates and stubborn inflation sent stocks tumbling in 2022, but the tech-heavy Nasdaq Composite turned in a record performance through the first six months of this year, rising nearly 40% after the release of OpenAI’s new generative A.I. chatbot, ChatGPT, helped sparked a wave of investor enthusiasm over A.I. At least officially, the bear market of last year gave way to the running of the bulls on Wall Street this June.
Rising stocks, the potential for sustained economic growth, and a productivity-enhancing A.I.-induced “fourth industrial revolution” have many analysts screaming “buy,” but Société Générale’s Albert Edwards remains cautious. “The U.S. tech sector has surged on the back of what may prove to be nothing but hope—mainly A.I. related,” the global strategist for the historic French investment bank wrote in a Wednesday note. “Actual earnings are poor in absolute and relative terms.” Edwards may be worth listening to for more than his bearish disposition—he’s been a loud voice this year questioning the direction of capitalism itself.
