Jul 04, 2025

Today, I learned that the stock market rally is expected to continue, with Truist’s Lerner predicting more gains as the S&P 500 hit a new high. Despite concerns like tariffs and geopolitical tensions, the market has surged 25% from its April low. Lerner remains cautiously optimistic about the U.S. economy’s growth and the Federal Reserve cutting interest rates further, although challenges may arise in the second half of the year.

Truist also suggests favoring international developed markets, particularly Europe, and focusing on higher quality bonds and municipal bonds. Gold is recommended as a portfolio diversifier, but there are concerns about investor sentiment potentially creating a higher bar for stock gains. However, historical trends show that a sharp bounce off lows typically results in gains a year later.

In addition to the stock market, there is a growing investment in AI startups, with AI companies receiving a majority of global venture capital dollars. This trend is expected to continue, with AI startups becoming a significant part of funded companies globally. Venture capital firms are now buying and combining small companies, incorporating AI into their operations to generate liquidity from their portfolios amidst a slowdown in IPOs and dealmaking.

The competition between private equity’s operational expertise and venture capital’s AI deployment is intriguing. VC firms acquiring small companies and infusing AI aim to build sector-dominating conglomerates. However, questions arise about VC firms’ AI expertise and the potential challenges in implementing AI rollups effectively. Tokenization of private company shares and banks undergoing stress tests are also reshaping the financial landscape, challenging traditional norms and raising ethical considerations.

Stay Well!