'Many people sat out from making significant trades over the course of the Iranian conflict': Moore

Key Concepts

• FOMO Market: A market driven by the "Fear Of Missing Out" on stock gains.
• TACO Market: A market characterized by the belief that political leaders (specifically Trump) will reverse policies if they cause market volatility.
• Long-only Investors: Investors who only buy assets with the expectation that their value will rise, avoiding short-selling.
• Secular Trends: Long-term market trends that persist regardless of short-term economic cycles (e.g., AI and technology adoption).
• High-Frequency Data: Economic indicators released frequently (weekly or monthly) that provide real-time snapshots of the economy.

1. Market Sentiment and Investor Behavior

Kate Moore, Chief Investment Officer at Citi Wealth, disputes the notion that the current market is "overwhelmingly bullish." Instead, she characterizes the last two months as a period of "stasis."

• Hedge Funds vs. Traditional Investors: The "fast money" community (hedge funds) has been the primary participant in recent trading. Traditional "long-only" investors have largely remained on the sidelines, waiting for clarity regarding geopolitical tensions (specifically the Iran conflict) and economic data.
• The "Shake-off" Effect: Historical data suggests that US markets are resilient to geopolitical disturbances. Investors have learned that panic-selling during geopolitical crises often leads to missing out on rapid market recoveries, as seen during previous tariff-related volatility.

2. Macroeconomic Backdrop and Earnings

Despite geopolitical shocks and concerns regarding energy prices, the macro environment remains robust.

• Economic Data: Recent high-frequency economic data has been solid, even when accounting for the period following the onset of the Iran conflict.
• Corporate Earnings: Earnings reports remain strong. Moore notes that the "shoe is yet to drop" regarding the impact of higher energy prices on corporate margins, but current expectations for the earnings season remain positive.
• Consumer Health: Feedback from corporations indicates that the consumer remains in good health, with spending levels holding steady.

3. The AI Investment Thesis

Moore addresses the debate surrounding Artificial Intelligence, explicitly rejecting the "bubble" narrative.

• Existential Necessity: Moore argues that AI adoption is not merely a trend but an existential requirement for businesses to remain competitive.
• Investment Strategy: Investors should be concerned if a company lacks a strong AI strategy. She emphasizes that current spending on AI is "foundational work" necessary for long-term transformation.
• Red Flag: Moore identifies any company cutting its AI-related spending as a potential "flag" or warning sign for investors, as it suggests a failure to invest in critical future infrastructure.

4. Strategic Framework for Investors

Moore outlines a methodology for navigating current market volatility:

1. Look Through the Noise: Distinguish between short-term geopolitical headlines and long-term macro fundamentals.
2. Focus on Resilience: Build portfolios that can withstand short-term shocks rather than reacting to daily news cycles.
3. Evaluate Guidance: Pay close attention to companies raising guidance for 2026, particularly those aligned with the tech and AI sectors.
4. Prioritize Secular Growth: Maintain exposure to core secular areas like AI, regardless of short-term quarterly return fluctuations.

5. Notable Quotes

• "If you don't hear from companies that they have a strong AI strategy, you should be concerned that in order to stay competitive... they need to be doing that spending now." — Kate Moore
• "Any company that says they're cutting their [AI] spending is a bit of a flag for me." — Kate Moore

Synthesis and Conclusion

The current market environment is defined by a tension between short-term geopolitical anxiety and a strong underlying macroeconomic reality. While many investors have been hesitant, the data suggests that the US market continues to demonstrate resilience. The primary takeaway for investors is to move past the "noise" of geopolitical headlines and focus on the fundamental strength of the consumer and the necessity of long-term capital expenditure in AI. Moore’s perspective suggests that the "FOMO" and "TACO" labels may oversimplify a market that is actually being driven by a rational, long-term commitment to technological transformation and solid economic performance.