Why AI hyperscalers are now the epicenter of a bear case for stocks

If the facts change, then I have to change. I learned that from reading the legendary British economist John Maynard Keynes, and it has never steered me wrong. I was a huge bull on this market because of the terrific things happening in artificial intelligence. And because we had a new Federal Reserve chair in Kevin Warsh, who wanted to cut interest rates to support growth, given the frozen housing market and an underclass struggling with higher gas prices, a drop in health care coverage, and the gratuitous cut in food stamps. I made this judgment, as I always do, by going to the source: the top twenty public U.S. retailers, who know far more than the government does about spending habits. Those include the auto and the auto parts companies, as well as ancillary home care businesses. The idea that we don't need rate cuts is fanciful. But then we got the monthly employment report on Friday, which showed that job growth unexpectedly surged in May, with nonfarm payrolls jumping a seasonally adjusted 172,000, far above the Dow Jones consensus estimate of 80,000. Of course, that figure never distinguishes between those who are employed and doing well and those who are employed and trying to hold it together. A job means self-sufficiency in this country, and there's no counterargument to that line of thinking, despite my attempt to make one when I interviewed Kevin Hassett, President Donald Trump's chief economic adviser. …