Given the performance of US stocks and bonds since Monday, analysts at Macquarie Research believe no one is worried about the prospect of a slowdown in US GDP growth.
However, they believe there is now growing concern about slowing corporate earnings growth among the most successful technology companies.
“Despite all the attention paid to generative artificial intelligence over the past nine months, Meta’s failure to meet first-quarter revenue growth guidance raises questions about whether monetizing the technology is as easy as what management led traders to believe. “Macquarie said in a note earlier today ahead of GDP data.
The analysts added: “The broader risk for the stock market is that doubts about corporate earnings growth will spill over into doubts about the transformative power of the supposed AI revolution in boosting productivity.”
This is worrying, Macquarie said, because the prospect of high-tech productivity growth protects the belief in long-term disinflation and long-term economic growth.
“Without this faith, we will only have to expect unfavorable structural trends on the supply side—climate change and resource-draining decarbonization efforts, deglobalization, conflict, etc. All of which drive inflation and reduce productivity,” the firm argues.