Iuorio: A.I. "Bubble" Can Last for Years, Brace for 30% Slide in 15 Months

Market Performance and Federal Reserve Insights - The Federal Reserve may be shifting towards a dovish stance, hinted by Jerome Powell's comments on ending quantitative tightening, which was earlier than market expectations [2][4] - The current market liquidity, influenced by the Fed's actions, is a significant driver for market performance, alongside the expanding interest in AI stocks [2][9] Technology Sector Dynamics - The technology sector, particularly companies like Micron and AMD, is currently leading the NASDAQ, indicating a broadening market rally beyond just Nvidia and Microsoft [4][12] - There is a concern that the enthusiasm for AI stocks may be overextended, suggesting a potential bubble, although this does not preclude further gains in the near term [12][21] Earnings and Regional Banks - Recent earnings reports from regional banks have raised concerns, but the issues appear to be more related to fraud rather than systemic problems within the banking sector [15][16] - The market's reaction to these earnings suggests a cautious optimism, as there is no immediate indication of a widespread crisis [15][17] Investment Strategy Recommendations - Investors are advised to adopt a tactical approach rather than a greedy one, emphasizing the importance of covering positions and using hedging strategies to mitigate risks [18][19] - A healthy market pullback is anticipated, with a potential 30% decline in major AI stocks within the next 15 months, which could present buying opportunities [21][22]