February 27, 2024
Market Analysis:

Impact of Artificial Intelligence

The world definitely feels that this year is a leap year 

Andrey Syrchin, along with the entire Cresco Capital team, is closely monitoring the events in the finance sector. He has analyzed the events affecting the market and shared his insights!

The market began to grow on the “hype of artificial intelligence” (highlighted in the chart), accounting for 40% of the growth. To put it into perspective, with 50 trillion dollars, AI has generated 15-20 trillion, comparable to China’s GDP.

The situation resembles a “bubble,” which is typical for technological breakthroughs—initially inflated by admiration, then deflates when the same AI is applied in life, turning the extraordinary into the ordinary.

All this occurs during a formal liquidity crunch in the markets. The US is “taking money out of the market with one hand and giving it to its banks with the other,” effectively creating a new repo and QE instrument for banks to prevent the system from collapsing.

Andrey asserts: “The first sign of a bubble is when insiders (company owners and top managers) offload large shares of their own companies into the market during this movement. J. Bezos, the founder of Amazon, has already sold 8 billion dollars of his shares, and the same is happening with E. Musk, M. Zuckerberg, and others.”

The market loses logic, showing no fear, a consequence of trading automation. This will be the next significant “black swan” in the global financial system, as robots lack the sense of fear and predictability, operating on clear algorithms. However, how did “2008 happen”?

Something is off in the market: AI hasn’t created 20 trillion dollars of added value, and such efficiency doesn’t exist yet. This euphoria will end badly for most investors (for example, NVIDIA and others like Tesla which dropped from 410 to 110 after Musk sold a large package of his shares at 300+ levels).

Look for solid stocks or funds that will protect your investments!