Good morning. Stocks opened this holiday-shortened week in positive territory with tech stocks leading the advance … indicating that U.S. markets will show 2025 has been a very good one indeed for investors. With continuing economic growth … contrary to calls for a yet-to-appear consumer slowdown … I jumped to investigate information to see how we are doing compared with years past … and am a bit intrigued by the result. The National Bureau of Economic Research (“NBER”) is the group that “officially” announces the start and end dates of recession. According to their pages, the United States had 20 (yes, 20) recessions in the hundred years from 1900 through 1999. And in the 25 years since the end of the last century? 3. So instead of having an economic downturn once every 5 years we now have had them once every 8 years … leading some to conclude we are overdue … long overdue … though trying to time the markets has long proven to be a futile and costly exercise. Consumer spending continues to be the wind in our sails … for even as consumers claim being tapped out … their spending habits tell the opposite story. Meanwhile, unemployment numbers are rising along with prices … with our nation’s debt rising $1.5 trillion in the last four months alone. But none of that seems to matter to investors as coal is not expected to be found in anyone’s stocking this Christmas. While AI is taking over … well … everything … a warning shot was fired this weekend in San Francisco as a blackout in the city caused traffic lights to be off … which completely fooled a bunch of Waymo “robotaxis.” How did they handle it? By stopping at intersections, blocking traffic and creating quite a bit of havoc. CNBC reports that according to a AAA survey, 2/3 of U.S. drivers are fearful of autonomous vehicles … and the situation in SF … which could have been worse … isn’t helping matters at all. One note I included today relates to something many may have to deal with in the next month … health insurance premiums. While there are many plans out there it is important to keep in mind that cheap doesn’t mean adequate … as some unfortunately don’t find out until an accident occurs. On a final note, these AI “data centers” are really using a lot of electricity … driving prices much higher even for those who don’t use AI at all. How big will a data plant likely be? One center being built in Louisiana by Meta is rumored to be almost the size of Manhattan. And that is just one building (of many planned). It seems that Artificial Intelligence uses one thing not artificial at all … electricity … real electricity … and plenty of it. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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