Jeremy Schwartz on Jobs Reports, AI, and European Investments

Inflation and the Jobs Report

• 💡 The market focus is shifting from inflation reports to the jobs report, as inflation numbers are expected to trend downwards.
• 🎯 Housing and shelter costs are identified as key drivers of CPI, with underlying trends showing cooling.
• ⚠️ Some analysts express caution due to potential tariff-induced inflation and the Fed's forward easing path, but the speaker believes underlying trends are positive.

The AI Trade and Market Concentration

• 🚀 The AI trade is considered to be in its early stages, potentially in the third inning, with expectations for broader participation beyond chip stocks.
• 🧩 Software is highlighted as a potential next phase of the AI trade, having been overlooked despite its long-term economic impact.
• 📈 Concentration risk in mega-cap tech may be lessening as performance broadens, with Oracle's results boosting AI-focused names.

European Investment Opportunities

• 🌍 There's a call for US investors to look more globally, with supportive valuations in Europe.
• 🇪🇺 European defense and infrastructure investments are seen as a decade-long trade, not just a short-term play.
• 💰 Broader European economic themes and infrastructure investments are also favored, alongside defense.

Dividend and Buyback Strategies

• 📈 A Wisdom Tree ETF focused on high dividends and buybacks offers a nearly 7% shareholder yield.
• 🧩 This strategy provides broader market participation, is not concentrated, and includes companies that are utilizing AI and believe their stocks are undervalued.
• 🛡️ It's presented as a play for companies that are buying back shares, indicating confidence in their stock's value.