🚨 WHARTON PROFESSOR JEREMY SIEGEL ON WHY HIGHER RATES HURT THE REST OF THE MARKET BUT NOT TECH:
"When you get 3 and a half percent after inflation, a 20 PE stock market gives you 5% after inflation. There's still a good margin there, but that margin is shrinking."
Why tech is immune:
"Look at the margins of the Mag 7. 50%, 60%, 70%. A tick up in interest rates doesn't matter much when your margins are that high."
Why the rest of the market isn't:
"Outside of tech, in the real world, when you're working on margins of 7, 8, 9, 10%, you start raising those interest rates and you really cut into profits."
"We all thought we had this great rotation going on in the first half of this year. This rise in interest rates has really put a stomp on it."
“It’s going to be about how we balance the fact that there’s good and bad in a new technology that comes along,” says Wharton School Professor @emollick on the future of AI.