PPI inflation comes in hot (sort of)… do technological advancements really kill jobs?… the data behind AI and the labor market… invest in AI, or else… As we’re going to press, news is breaking of “reciprocal tariffs” from President Trump. Speaking in the Oval Office, Trump said: They charge us a tax or tariff and we charge them. We’ll have more on tariffs in tomorrow’s Digest. But for now, I’ll note that the markets are responding favorably. This is because these tariffs don’t kick in for months, which is raising hopes that they’re a negotiating tactic and will ultimately be avoided. More on this tomorrow… We’re 0-for-2 so far this week… Fortunately, the market doesn’t seem to care. From Tuesday’s Digest: Three inflation reports this week could be catalysts to help stocks resume their march higher… If the data come in soft, the report could act as a defibrillator, jolting stocks back to life. Yesterday’s Consumer Price Index (CPI) data did not come in soft. In fact, the numbers surprised to the upside, causing stocks to stumble. This morning, we received a second batch of hotter-than-expected inflation data with the Producer Price Index (PPI) report. Wholesale prices rose 0.4% in January, more than the estimate of 0.3%. On a year-over-year basis, PPI rose to 3.5% from 3.3%. This is the highest rate in nearly two years. Now, there is some good news… Monthly core PPI (which strips out volatile food and energy prices) was up 0.3%, in line with the forecast. And the year-over-year rate fell to 3.4% from 3.5%. As I write early-afternoon, all three major stock indices are up. This is because Wall Street is focusing on the cooler core readings, as well as some details in the report that suggest easing inflation. For example, physician care costs dropped 0.5%... domestic airfares fell by 0.3%... and brokerage services pulled back 2.2%. Bigger picture, this morning’s data, along with yesterday’s CPI report, give the Federal Reserve zero reason to cut rates anytime soon. Fortunately, the market is shrugging it off, focusing instead on some strong earnings. Even the bond market is handling this morning’s report in stride. As I write, the 10-year Treasury yield is down nine basis points to 4.53%. Louis Navellier’s commentary after yesterday’s CPI report is playing out: [Because of yesterday’s climbing 10-year Treasury yield after the CPI release], there will be an adverse market reaction, but then I think the market will just regroup and be fine. We’ll see if tomorrow’s Import/Export price report gets us on the board. | Recommended Link | | | | China’s DeepSeek rocked the markets when it announced it’s a new platform could rival ChatGPT. The news was so alarming, it prompted new legislation proposing 20 years in prison for Americans who use DeepSeek. Make no mistake: The global AI race is on. And according to Nvidia’s CEO, a $100 trillion opportunity is now emerging. To help people seize a ground floor stake, Wall Street legend Louis Navellier is holding an urgent AI summit, and even issuing Strong Buys on 7 AI stocks poised for 1,000% potential gains in new AI frontier. Go here now. |  | | In the 1980s, banking employees found themselves facing a troubling reality… “Machines are going to take our jobs.” Behind the risk of unemployment was the rapid expansion of ATMs across the nation. Instead of making deposits or withdrawing cash from a human bank teller, suddenly, you could do it with an ATM card and a machine. The writing was on the wall – bank teller jobs were about to be decimated. Not exactly… Around that time, the average bank branch employed about 21 tellers. But thanks to the advent of the ATM, that was no longer necessary. The number fell to roughly 13 tellers. So, yes, technology did eliminate jobs. But that wasn’t the whole story… Thanks to the ATM, branches were suddenly cheaper to operate. Banks – wanting to increase profits by servicing new neighborhoods – were now incentivized to open additional branches thanks to the favorable economics. So, as a wave of new bank branches opened across the country, what did that mean for demand for teller jobs? It increased – a lot. Sure, not as many teller jobs were needed per location, but when viewed on an absolute basis, the number of teller jobs roared higher. This is a well-worn pattern with technological advancements This phenomenon didn’t just occur with ATMs. The rise of the automobile industry in the early 20th century replaced jobs related to horse-drawn carriages. Of course, the need for auto mechanics, gas station attendants, car manufacturers, and road construction workers resulted in a far great number of overall job opportunities. When barcode scanning technology was introduced in retail stores, many feared it would replace cashiers. Instead, it made checkout faster, allowing stores to handle more customers and open more checkout lanes. Demand for cashiers increased. The use of electronic discovery software in lawsuits resulted in more paralegals, not less. Automated machinery in factories increased productivity, resulting in new factory jobs as companies expanded and opened more facilities. I could continue, but you get the point. Now, here we are today at the cusp of a new transformative (and disruptive) technology: artificial intelligence. Sir John Templeton said, “The four most dangerous words in investing are: 'this time it's different.'" But as we look at AI’s potential impact on the employment landscape, isn’t it, in fact, different? After all, we’ve never had a technology that’s been able to do… well, everything. The impending “AI Jobs Apocalypse” That’s the term used by our technology expert, Luke Lango, in a recent issue of Hypergrowth Investing. From Luke: Does the creation of AI mean the destruction of jobs? Unfortunately, the answer could be a resounding yes. It seems that the consensus belief among everyday Americans is that the whole ‘AI Jobs Apocalypse’ is way overblown; that even if it does happen, it’s still another 10 or 20 years away. But we are seeing evidence that suggests this labor destruction has already begun. Luke points to a recent survey of chief financial officers (CFOs) conducted by Duke University and the Federal Reserve Banks of Atlanta and Richmond. It found that 61% of U.S. firms plan to use AI within the next year to automate tasks previously done by employees. And that’s just the start of that data. Here’s Luke with more: Goldman Sachs estimates that AI could replace 300 million full-time jobs. McKinsey Global anticipates that around 15% of workers globally will have to change careers due to AI. OpenAI’s own research suggests that about 20% of workers may be at risk of AI-powered automation. Citi sees AI impacting more than half of all jobs in finance. And according to a recent Conference Board survey, about 50% of CEOs themselves think they’ll eventually replace human labor with AI. Make no mistake about it. AI is coming for your job. So, is this time different? With all due respect to Sir John Templeton, brushing off the coming impact of AI appears to be the greater risk. If you can’t beat ’em, join ’em From our October 7, 2024, Digest: Imagine a billiards table with its pool balls spread about the table randomly… Now, imagine hoisting up a corner of the table so that all the balls roll into a single pocket. This is the financial impact of Artificial Intelligence (AI) on global wealth. AI is lifting the billiards table… the pool balls are global wealth/investment capital… and the one pocket receiving all the balls are the owners of the businesses that wisely and effectively implement AI technologies. What about the five other empty pockets? Well, they’re the businesses that fail or are unable to adapt to next-gen AI technology or business models. They’re also the “regular Joes” who get shafted financially as AI steps in to do their jobs faster, better, and cheaper… In the era we’re entering, there will be just two types of people: the owners of AI, benefiting from the lopsided flow of capital, and everyone else, who are watching AI swallow their former economic productivity like light into a black hole. If you’re worried about your job, perhaps the best thing you can do is invest in the technology that might replace it. Luke made this point in his latest think piece, writing that one of the best ways to prepare for an AI job takeover is by buying AI stocks. Back to Luke: The choice before us, then, is simple. Stay on the sidelines. Keep collecting your paycheck. And barely get by as the cost of living keeps going up. Or get in the game. Invest in AI stocks. I know the weight of this risk can feel immobilizing. So many folks in my life – myself included – worry that one day soon, they could struggle to put food on the table. And while there may only be so much we can do to prepare, I want to do my best to equip as many people as possible for what could lie ahead. On this note, Luke just created a brand-new presentation on the AI Jobs Apocalypse. It details what AI means for the economy, the markets, and maybe even your money. You can check it out right here. | Recommended Link | | | | We're on the cusp of the biggest market disruptions in modern history, and its impact on American retirements is already in motion. The 1% are about to exploit a massive “transfer of wealth” at the cost of your own personal savings. Depending on how you prepare, this tipping point could either be a grave danger or an incredible opportunity. Here's what you need to know. |  | | But Luke isn’t our only analyst with this perspective Legendary investor Louis Navellier has also been watching AI’s impact on our economy, labor force, and investment markets. And like Luke, he believes that investing in AI is one of your best defenses against the potential downsides of AI. If you’re new to the Digest, Louis is a multidecade veteran investor who’s been out in front of just about every twist and turn of the AI boom. His quantitative algorithms have enabled him to get in early on each mini-phase of the AI rush. For example, his computers flashed on all the Mag 7 companies before they went on to double (GOOG, AMZN, MSFT), triple (APPLE), quadruple (META), soar 1,000% (Tesla), and even explode 37,000% like Nvidia. He then got into AI chip companies, data-center stocks, and servers before some of their biggest moves. Today, Louis believes AI is about to take the next step in its evolution, ushering in a new wave of 1,000%+ winners. It’s due to AI’s “Crossover Moment.” From Louis: [This is when] AI breaks out of the digital world and steps into the real one – running self-driving cars and equipment, automating factories, training robotic workers… even building “digital twins” of entire cities. This shift is massive. And investors who see where it’s headed right now stand to benefit the most. I call this AI’s Crossover Moment – and it could create more wealth than any other tech boom in history. Louis just put together a broadcast that details what’s happening and how investors can position themselves for his next step of AI. You can access it free right here. The win-win proposition of aligning your wealth with AI No one knows how this grand AI experiment will play out. Hopefully, we’ll follow the path of the ATM: AI results in more jobs, a higher quality of living, and greater overall economic abundance. If that’s the case, you want to own the AI companies that enable this utopian vision, since they’re the ones that will profit from this societal advancement. On the other hand, there’s the risk that AI will be every bit the job-destroyer we fear. For every new job it creates, an AI bot will be there to perform it better, cheaper, and faster than we ever could. If that’s the case, you need to own the AI companies that enable this dystopian vision, since that’s where all the “pool balls” will be flowing. At least we’re not wondering what to do… Have a good evening, Jeff Remsburg | 
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