The Macro Minute: Are we in an AI stock market bubble?

Ajouté : 2026-06-03

[00:00:00]Happy Tuesday out there, team 42. It's your skipper here, D. Arias representing our macro minute for Tuesday, June 2nd, 2026. As always, we'll start with the executive summary from today's lead-off morning note. So, let's dive right in.

[00:00:10]Today's key macro question is, are we in an AI stock market bubble?

[00:00:14]Our answer is, investors, bankers, regulators, and index providers can't get enough AI exposure and will do whatever it takes to acquire it. These emotional, capital allocation, regulatory, and governance decisions suggest we are indeed in a bubble.

[00:00:32]Still, that does not mean you should not participate. Bubbles are a fantastic tool for wealth creation. If your goal is to retire on time and comfortably, you should seek to maximize upside capture as long as we are in a risk-on market regime, regardless of whether there are bubble-like characteristics.

[00:00:50]The bubble label does little more than increase the risk of two destabilizing type two errors for every investor.

[00:00:56]Number one, not being exposed on the long side while it is occurring. And number two, being overly exposed in the highly probable secular bear market that is likely to follow.

[00:01:08]Do not short the AI bubble unless Dr. Mo prescribes shorting as a treatment plan for your negativity bias, which every human on the planet suffers from.

[00:01:17]It's genetic. And subscription selling bear porn providers know this. They make millions from tickling your amygdala with salient fears regarding valuation, etc., while you make nothing in a raging bull market. Shame on them for doing this, and shame on you if you allow them to spook you out of making money after hearing this.

[00:01:38]Transition to our 42 macro dashboard. As always, we'll wrap up with the question from our community. This one's titled income inequality. Says DD, has any interviewer ever just asked you what you would do to solve the widening income inequality issue in this country, assuming you had all the levers to pull?

[00:01:54]So, a great question.

[00:01:56]So, I'm just going to come on out and answer it. There's a three, you know, strategy, you know, three-pronged strategy that I would do. And again, I'm obviously not in public office here, but I will be at some point in the future either as governor of Florida, governor of New York, and eventually president of the United States, but I digress.

[00:02:10]So, my solution is pretty simple. Number one, we need a flat tax. Number two, we need a flat tax.

[00:02:17]>> [laughter] >> Uh seriously, our 10,000-plus page federal tax code is full of loopholes for this industry, that industry, this county, that state, this I mean it's it's a darn joke. And all those loopholes are is just a way to siphon income and wealth from one community to another community. For instance, if you're a property developer and all these 1031 exchanges or if you're hedge fund manager and they and the venture capital fund manager and all these carried interest loopholes. I'm just using those as two prominent examples, but the reality is there's 10,000 pages of examples much like with the qualified What was that thing in this morning? The qualified QB QSBS, qualified small business stock. Why do we allow people to skirt capital gains? Why why are we paying people billions of dollars over the course of the budget window to to to to skirt capital gains? Like why don't they do this for people who are struggling to make ends meet at the at the at the dinner table? I don't understand. Why do we have all these disparate the government creating winners and losers and ironically creating more winners at the top end of the income distribution than they are at the bottom end of the income distribution. So, my my proposal is that if we simplify the entire tax code to one sentence, just one sentence, every single transaction that generates income for any person or business in the country pays the same rate, period.

[00:03:38]I don't care if you're poor, you're rich, you're you're you're you're tech company, you're hospital, you pay the same rate for every dollar income as everyone else and every other agent in the society. That would cause a that would that would shut a a of the the the the the know, the the the socialism for the rich capitalism poor dynamic down.

[00:03:55]And then finally, I would encourage a lot more competition.

[00:03:59]If you look at demand for labor and economic growth by trust busting. I mean, in my opinion, I think it's absolutely absurd that we allow these mega cap companies to become as big as they are. You got meta owning Instagram as an example. Google owns YouTube.

[00:04:11]SpaceX is eventually going to own Tesla.

[00:04:13]I mean, I can go on and on about how the the the the consolidation that we've seen across many industries that have created these massive you know, behemoth companies which are great for generating corporate profits. But as we can see in this chart here, terrible for the labor market. The blue line is labor share of national income. The red line is capital share of national income via corporate profits. And we can very clearly see that there is an issue here from the perspective of the lack of trust busting, the lack of labor demand, and ultimately the lack of economic growth that this causes. You know, entrepreneurs create jobs. Entrepreneurs create economic growth. Big companies just create profits and more wealth that gets accumulated in smaller and smaller circles and more and more with leads to more and more concentration of power. So ultimately, you know, these are three things that I think and there's obviously a longer list than this, but these are three things that I think are very important to address. And so you know, where do I get a lot of these thoughts? You know, obviously my friend and former colleague Neil Howe one of my best mentors that I've had throughout my career.

[00:05:15]Ray Dalio also one of my best mentors I've had throughout my career. I don't know Ray personally, but you know, I owe my career to him in terms of all the models that I built throughout the course of my career which have many of the top hedge funds on global Wall Street are are many of the PMs across the top hedge funds on global Wall Street are putting to use with great with great detail. And I'm I'm grateful for those relationships as well. And then obviously Peter Turchin. So you know, I probably sound like a guy with a tin foil hat on sometimes on Twitter or sometimes in this program, but the reality is you know, it's just coming from the place of trying to fix our broken society. You know, I grew up you know, basically homeless, you know, with two crackhead parents, you know, with a very abusive, you know, ex-marine stepdad, and you know, I've I've experienced, you know, homelessness, you know, food insecurity, physical abuse, you know, emotional abuse, mental abuse, for, you know, basically half of my life. And so, as someone who's overcome all that stuff, you know, it's really important to me that, you know, we don't, you know, have kids around in our in our society, and really around the world, having to go through that kind of stuff. So, that's why it's I'm so passionate about taking the gifts that God gave me from a macro management and economic forecasting standpoint to create positive outcomes.

[00:06:23]And so, if you believe in that, join me.

[00:06:26]If you don't believe in that, then God bless you anyway. So, we'll wrap it up there. If you're still here, we're wrapping up presenting our macro minute for Tuesday, June 2nd, 2026. Best of luck out there today. We'll catch you back here tomorrow. Cheers.