Why 'avocado and garlic' could be key AI market catalysts to watch

? (Anchor) 00:00.270

and now let's unwrap what to watch in the next two weeks into january and avocado and garlic are terms you need to remember joining us now adam christophouli vital knowledge founder and president adam we're not making guacamole here it's AI yes

Adam Crisafulli (Founder and President) 00:18.270

AI you know is still the most important theme trend in this market and so garlic and avocado are the two frontier LLM models that are due out around Q one for open AI garlic and meta 's avocado and this is really going to be probably the next major event for the entire industry

Adam Crisafulli (Founder and President) 00:37.670

which is why they're going to be so crucial

? (Anchor) 00:39.150

what about the factor of whether that expected tax related stimulus in effect continues to drive consumer activity

Adam Crisafulli (Founder and President) 00:47.480

yeah that's also going to be very important to watch you know tax refunds are going to be very large next year just given a withholding schedules for this year we're not adjusted for the one big beautiful bill and that should provide a tailwind for the consumer and you know also

Adam Crisafulli (Founder and President) 00:59.960

we're also going to get some incremental fed stimulus in Q one probably one more rate cut along with ongoing asset purchases of T bills which would help keep at least a short end of the yield deals at the short end of the curve suppressed so that stimulus will be important also

Adam Crisafulli (Founder and President) 01:13.600

definitely

? (Anchor) 01:14.080

yeah how do you how do you weigh that coming out of the fed versus what we're seeing from some of the other major central banks including by the way bank of japan just earlier today

Adam Crisafulli (Founder and President) 01:21.590

yeah definitely you're going to see monetary policy globally will be less dovish next year than it was this year so the fed is probably going to be cutting fewer times in two thousand twenty six and two thousand twenty five ECB is probably finished with their easing cycle the

Adam Crisafulli (Founder and President) 01:36.310

BOE the the cut this week had some hawkish components to it and like you said the BOJ is in tightening mode they probably do at least one more hike next year so monetary policy and globally will not be as supportive as it was this year but there still will be you know tailwind

Adam Crisafulli (Founder and President) 01:52.190

for the market and for the economy much

? (Anchor) 01:54.270

nearer term here santa claus rally kicks off in earnest on christmas eve we know typically this time of year tends to be seasonally very strong your expectations here in the final trading days of twenty twenty five

Adam Crisafulli (Founder and President) 02:07.070

yeah i think this week ended on a positive note you know i really think probably if there's one event this week that that drove the markets more than anything it was it was micron which really helped tech you know tech had a couple of rocky earnings reports with broadcom and

Adam Crisafulli (Founder and President) 02:19.470

oracle the space traded very poorly at the start of this week and it all turned around you know largely because of micron so it's likely that will continue at least for the next week and a half you know it's given that we don't really have a lot of major events on the calendar

Adam Crisafulli (Founder and President) 02:32.630

we're in a seasonally favorable period of the year and so i suspect you're probably going to see what so thursday and friday continue

? (Anchor) 02:39.310

tell me how you think the whole fact versus feelings a debate in the economy has evolved over twenty twenty five for a while we're saying people were feeling really bad but the numbers look pretty good now it seems more to me people are feeling bad and for the working class the

? (Anchor) 02:55.390

numbers are starting to look not so great and we've got this K shaped economy question what needs to be resolved in twenty six to determine how the market handles it

Adam Crisafulli (Founder and President) 03:04.950

yeah i mean definitely i think you know that's been a huge trend this year and it likely will continue you know i think some of the affordability challenges in twenty twenty six might ease you know housing is likely to be a major source of disinflationary pressure in twenty

Adam Crisafulli (Founder and President) 03:18.990

twenty six i think employment is really going to be the major wild card you know companies have been relatively sanguine as far as margins and their own outlook but a big part of their their margin outperformance is the fact that they are not adding to headcount you know AI is

Adam Crisafulli (Founder and President) 03:34.470

probably contributing a little bit to that at the margin but i think employment is going to be the real kind of wild card so i think the narrative will flip in twenty twenty six this year was all about affordability and inflation i think in twenty twenty i'm sorry in twenty

Adam Crisafulli (Founder and President) 03:45.430

twenty six it's going to be very much employment dominating as you see kind of the unemployment rate be higher and like you said within the unemployment rate you know more vulnerable park to the of the economy are probably going to experience more job stress