Tech companies, particularly Nvidia, hold significant weight in the global stock market due to their unique products and dominance. Unlike the past where companies like Cisco led the market, tech giants now play a crucial role in the market's index. The US leads in exporting technology, with Nvidia's high-value chips creating a substantial moat around the company. As labor costs transform into technology, the US emerges as the primary tech supplier. While tech currently represents about 18% globally, it is expected to rise to 40-50%. This transition signifies a shift towards capital investment over recurring labor costs, indicating the growing importance of tech stocks in the market.
The stock market has had a torrid run in 2024 despite the fact that interest rate cuts haven't materialized in the way people had expected at the start of the year. In fact, outside of a few blips here and there (like spring 2020), US stocks have been phenomenal performers for years. Tom Lee, the founder of Fundstrat and FS Insight has been bullish for a long time, having caught the correct side of this lengthy trend. On this episode, we speak to the former JPMorgan strategist about how he thinks about the market, what he sees happening right now in macro and demographic trends, and why he thinks it’s plausible that the market could roughly triple in the next six years.
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