Last Friday’s session was cautious, as investors focused on Energy (XLE), electricity, and building blocks. A significant emerging story is the need for Energy to realize the Fourth Industrial Revolution. It isn’t happening with windmills.

Bonds Breaking Down

As smart money began loading up last year, there had been an assumption that the worst was over for bonds. Never assume.

The pain of bondholders could spill over to stock owners if the ten-year yield closes above 4.35%, north of 4.40%. Lots of narratives will need to be altered.

A.I. Woodstock

Nvidia (NVDA) kicks off its annual annual GTC (GPU Technology) in San Jose, California, for Artificial Intelligence (AI) developers today. It’s the first in-person gathering in five years, and the four-day event is known as ‘AI Woodstock.’ Jensen Huang, president and CEO of Nvidia, speaks this afternoon. He is a mix of Elon Musk and Steve Jobs and will become a household name beyond AI and technology.

AI dominates all conversations.

Today’s Session

The NASDAQ will be off to the races at the open, as the AI Woodstock hype shifts into overdrive.

Conversely, little attention is being paid to the breakout in crude oil and potential in the Energy sector.

In a market stretched on a historical basis, we could see more action in Energy, Financials, and Utilities.  We are working on potentially increasing exposure in the model portfolio.