Over the past short while, I’ve been reading lots of comments about how apparently lopsided, or AI-tilted, the current US stock market is. The general argument is that if there’s some bad development in the AI space, the S&P and NASDAQ have nothing much else going for them.

I agree that this is the case. But there’s also another side to the coin, one that I think is just as important. It’s that, ex AI, the US economy doesn’t have much going for it at all–due in large part, I think, to the high level of incompetence on both sides of the aisle in Washington. Although almost half a century as a professional investor has taught me that government policy never really matters that much. Not so right now, I think.

Two conclusions:

–it isn’t completely that AI is so dominant, it’s also that the general domestic economy is in poor shape and that current federal government policy has given the US as a place a tremendous black eye. Joining North Korea and the Taliban as one of the few entities to televise executions is probably not a feather in our cap, either.

–for the first time in a very long while, US election results may well play a significant role in the direction of the stock market into next year. The question to be answered is whether it still makes sense, as it has since the inauguration, to avoid the general US economy as much as possible.