The AI Story You Likely Haven't Heard
Transforming the single biggest industry in the world... Doc Eifrig on the AI story you should know... His predictions worked out better than he expected... A peek at the jobs market... Oil prices fall again...
You may not have heard this story about AI...
Even though our friend and Stansberry Research senior partner Dr. David "Doc" Eifrig talked about it nearly two years ago...
In July 2022, Doc broadcast a free presentation to all Stansberry Research readers. He explained a $4 trillion industry that millions of Americans would have no choice but to be a part of in the years and decades ahead... how it would happen... and the type of companies that would be best positioned to take advantage of the trend.
Artificial intelligence was a big part of the story. Doc talked about work being done at Google in 2020, for example, and noted several instances of incredible research in the sector he was describing, thanks to AI. As he said then...
These are the sort of developments we've imagined for decades... but that never seemed to materialize. Now they're all happening at once.
As I (Corey McLaughlin) wrote then, Doc was talking about a trend he said was "bigger than anything else in the past 40 years." And he explained that it was "unfolding in the biggest, most important, and most bulletproof sector of our economy."
What's more, Doc said this research was "the most important work I'll ever do." And if you know Doc at all, that was saying something...
Doc has an amazing professional background. He is a former Goldman Sachs trader who became a board-eligible eye surgeon before deciding to share his health and financial expertise and write newsletters (and he owns his own wine business today as well).
As we wrote in July 2022, Doc said "he can all but guarantee that the ideas he's talking about will be obvious to everyone in five years."
Two years later...
Not only have all of Doc's predictions come true, but the results are even better than he could have expected... And AI is part of the ongoing story.
But while AI is constantly in the headlines today, most people are only talking about chipmaker Nvidia (NVDA) or the ChatGPT bot. So Doc recently sat down on camera to update his message and reshare this story about this industry, and we want to make sure everyone has a chance to see it.
Because what Doc's talking about is still being overlooked, despite all the hype around AI today... and despite Doc's belief that this trend is still in its early stages and will dramatically change millions of people's lives. As he says...
This is the most transformative story I've ever shared with readers, and one that will resonate in the lives of our children and grandchildren – long after I'm gone.
If that sounds grandiose to you, please just listen. Because whether you invest a single dollar in this idea or not, it's going to affect all of us in ways that go way, way beyond money...
This is a story about AI. But not the one you've likely heard – about supply chains, or disappearing American jobs, or the "Magnificent Seven" stocks...
Instead, it's about how AI is changing the world right now, today, in a way that affects you deeply – changing the world for the better... by transforming the single biggest industry in the world.
The fact that this massive story is still relatively unknown compared to the tales of AI darlings like Nvidia or OpenAI is good news for savvy investors. This includes subscribers to Doc's Prosperity Investor newsletter, who are aware of this story today. Make sure you're one of them...
You can watch Doc's new message for free here... It includes all the details about this AI story, including the key to unlocking its full potential. Doc also shares the two steps folks should take today to prepare for and profit from this trend – in a bear or bull market.
(And a note for Stansberry Alliance members and existing Prosperity Investor subscribers: You already have access to the full details of the research Doc is talking about, but feel free to watch his presentation to get up to speed or a reminder about it all.)
Switching gears, here's a look at the jobs market...
On the employment front, today's Job Openings and Labor Turnover Survey ("JOLTS") report painted a picture of moderation.
The Bureau of Labor Statistics reported that on the last business day of April, the U.S. had 8.1 million job openings, down from the (revised) 8.4 million in March. The report also said 5.6 million people were hired in April, which was consistent with March.
The pace of "separations" from employment – either through folks voluntarily leaving their jobs or getting laid off – also changed little at 5.4 million.
Now, this doesn't mean people aren't quitting jobs or being laid off. Again, they tallied more than 5 million in April, according to these numbers. But the numbers don't reflect much change from the month before.
That said, the U.S. has nearly 2 million fewer job openings from a year ago, and that's also well off the pandemic-stimulus-era peak. In March 2022, the U.S. had around two job openings for every available worker... Now, that ratio is down to about 1.2 to 1, the lowest since June 2021.
So, all in all, this report suggests the status quo on the labor market front – relative weakening, but not a disaster either.
Investors follow the JOLTS numbers because Federal Reserve officials have said that they track them to gauge labor market strength or weakness. Of course, the state of the jobs market is one of the major factors the central bank purports to weigh when making monetary policy.
But keep in mind that these numbers cover activity two months ago. The market will digest some more current employment numbers in the days ahead with government and private-sector payroll reports, culminating with May's "nonfarm payrolls" report on Friday morning.
Oil prices keep falling...
The prices of Brent crude oil, the international benchmark, and West Texas Intermediate, the U.S. standard, have fallen by another 1%-plus in the last 24 hours. This makes for five straight days of losses since the OPEC+ oil cartel signaled a potential lifting of "voluntary" production cuts starting in October.
The move suggests more oil supply hitting the market and has now sunk oil prices by 15% from a recent high in April. If prices stick around current levels, it should "help" short-term inflation numbers. And that could act as more evidence for the Fed and other central banks to cut interest rates later this year.
(Officially, the Fed strips out energy prices from its preferred inflation data due to volatility like this... But we know the central bank is paying attention to other metrics, too, and energy costs often are passed through into various parts of the economy and other prices.)
Over the past week, fed-funds futures traders have upped their bets for a 25-basis-point cut coming at the central bank's September meeting, with their action as of this afternoon suggesting a 55% probability. That's up from 42% a week ago and a few points higher than yesterday.
Even more of these traders think rates will be lower after the Fed's November meeting, which will occur in the two days after Election Day. And more than 90% of fed-funds futures traders expect a cut by the end of the year.
The major U.S. indexes were mixed for the second straight day, with the benchmark S&P 500, Nasdaq, and Dow Jones Industrial Average little changed and the small-cap Russell 2000 down more than 1%.
New 52-week highs (as of 6/3/24): ABB (ABBNY), Arhaus (ARHS), Alpha Architect 1-3 Month Box Fund (BOXX), Costco Wholesale (COST), Dimensional International Small Cap Value Fund (DISV), iShares MSCI Spain Fund (EWP), Eli Lilly (LLY), Altria (MO), Spotify Technology (SPOT), Verisk Analytics (VRSK), and Vanguard Short-Term Inflation-Protected Securities (VTIP).
In today's mailbag, more feedback on Dan Ferris' Friday essay... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Dan, Another great Friday Digest. I fall into your retired 'worrywarts', dare I say category.
"I too, have read with great interest your Friday Digests and have slowly been taking profits and accumulating cash, as this market is historically expensive. Brett [Eversole] is pointing True Wealth readers towards overseas markets/funds, as those markets aren't nearly as frothy as the Dow/S&P/Nasdaq are currently.
"I do want to thank you and Doc for suggesting treasuries and Treasury funds. You gave a freebie several months ago in the Digest and Doc educated readers into venturing into T-bill purchasing on Treasury Direct. Both have been great places to park this extra cash and hey, getting 5%-plus interest to boot.
"As far as this reader feels, Stansberry provides great analysis and excellent reads!" – Subscriber Steve R.
All the best,
Corey McLaughlin
Baltimore, Maryland
June 4, 2024