00:00Let's not forget as well that the whole of this past week, it has been this discussion on which sector
00:06is going to be hit next by the AI disruption.
00:09We saw the software makers getting hard hit in the middle of last week.
00:13Then it was the financial research firms.
00:16Now, wealth management also seems to be reeling.
00:19So it looks like a play-by-play when it comes to the impact of AI on the economy and
00:26the markets as well.
00:27This is the close when it comes to the financial-related firms that were affected, wealth management firms that were
00:36affected by that narrative.
00:38Joining us now is Kerry Craig, global market strategist at JPMorgan Asset Management.
00:44Kerry, good to see you.
00:45So there's a lot of uncertainty when it comes to the impact from AI, the disruption that is underway.
00:52Markets seem to be deciding ahead of all this already.
00:56What is your sense of the uncertainties in the market and how to play all this?
01:02Good morning.
01:03Well, it certainly is a case of shoot first, ask questions later in terms of how the market has reacted
01:08to a lot of this news.
01:09It does create pricing opportunities for some companies where they get thrown out with the bathwater, as it were.
01:15I think until you see the real impact on what it might mean with earnings and bottoming in those earnings
01:20outlook,
01:20there's likely to still be some stress about certain sectors around the software and how far that may go.
01:26But I think more broadly, when we think about the benefits of this AI theme across the economy and across
01:31the market,
01:31it is about thinking about those adopters who's going to benefit from this,
01:35who can actually see those cost savings come through and maintain margins.
01:38And that, again, rotation that we've seen through the course of this year and last year,
01:43sort of balancing out some of that sector exposure and AI and tech.
01:46Now, that's not a case to say that we don't like AI and tech.
01:49We just think it's more a focus more on the semiconductor side of things, more on the hardware side of
01:55things,
01:55and really seeing that demand come through there while balancing that out with some of those other sectors across the
02:01economy,
02:01which continue to do well if we look at how the market has performed.
02:06So which exactly do you see most primed to benefit?
02:12Well, we look at the performance in financials.
02:14A lot of that's down to deregulation we expect to come through.
02:17Obviously, we're thinking about some of the build-out that's required for this,
02:20if it's materials or industrials that come up.
02:22And then also we're thinking about some of the benefits that are going to stream through to things like healthcare,
02:27for example.
02:27So while the concerns are around some of this horizontal agentic AI in terms of how it affects software,
02:34there's other parts where it's more about the vertical.
02:35And we think about how that can benefit sort of healthcare, pharmaceutical production,
02:40and thinking about the benefits that come through from being able to do all those complicated calculations
02:45when it comes to healthcare and the benefits that AI bring to that.
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