The Hidden Fractures Behind America’s “Resilient” Economy

The Hidden Fractures Behind America’s “Resilient” Economy | Aahan Menon – Forward Guidance

Mentioned

Bullish

PORTFOLIO— Implement diversified portfolio strategies using leverage to match equity returns, volatility targeting, and basic trend following as accessible approaches for retail investors to add significant value without sophisticated macro trading
AI-CAPEX— AI capital expenditure acts as pure profit stimulus through the Kolecki-Levy equation framework, generating immediate revenue without corresponding immediate costs as depreciation is delayed, making this highly stimulative for corporate profits
TECH— Technology sector benefits directly from AI CapEx spending while avoiding weakness in traditional cyclical sectors, representing one of the best trades of the year in a bifurcated economy

Bearish

ENERGY— Energy represents the most cyclical sector struggling while AI-driven sectors thrive, with traditional cyclical investments like residential and industrial equipment declining in a bifurcated economy
BONDS— Avoid bonds due to conflicting data between weakening employment and above-target inflation creating whipsaw conditions as the Fed struggles with conflicting objectives, making bonds difficult to trade directionally with mean reversion being the best strategy

Not investment advice.