A Bridge Too Far: The AI Transition

The report analyzes the 'AI transition' and its potential to disrupt the economy through white-collar job losses and margin compression in tech. It also highlights escalating U.S.-Canada trade tensions and maintains a bullish view on aggressive Fed rate cuts.

Key Takeaways

• 1.The 'AI Transition' is causing a shift in market structure where high-margin software businesses face margin compression while low-margin physical businesses may see margin expansion.
• 2.Trade tensions are rising between the U.S. and Canada, exemplified by disputes over the Gordie Howe Bridge and legislative pushback against tariffs.
• 3.The report maintains a dovish Fed outlook, predicting 75 bps of cuts by September and 10-year yields falling below 4%.

Table of Contents

• A Bridge Too Far?
• The AI TRANSITION?
• White collar job losses.
• The Fed
• Two Last Things
• Bottom Line

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