What Monday might bring...

It definitely looks as if the shine is coming off the AI bubble.  Intel got quite the haircut on Friday, shaving off 26% of its stock price.  Nvidia reports earnings at the end of August, and I'm sure the whole financial community will be holding its collective breath on that one.

It wasn't just AI-related stuff that took a cut on Friday, though.  Almost everything was down to some degree or other.  Japanese stocks were hit hard due to the Bank of Japan deciding to raise interest rates for the first time in what seems like forever.  Commodities pulled back, too.

So what fared best?  Well, in my own portfolio, it was bond funds and REITs.  That stuff was in the green while everything else was in the red.  What can we glean from that?  Well, I don't really know.  Bonds and real estate are both sectors that are highly sensitive to interest rates, so if those things are up, then that could be construed as a sign that investors think a rate cut is coming soon.  We've already seen all sorts of chatter about a rate cut in September, but the Fed talks and chatter walks, right?  At the end of the day, Jay Powell is driving this boat.  I personally think he's being a tease.  I think he has no intention of lowering rates soon, but he wants to dangle the possibility in front of everyone for reasons of his own.  He's Lucy with the football.  But I guess we'll see in due time.

I wouldn't be surprised to see a dead-cat bounce on Monday after Friday's sell-off.  That's the thing about big moves on a Friday: the traders have the whole weekend to second-guess their decisions, and by the time Monday morning rolls around, they're itching to hedge a bit.

But there's a good chance that this AI stuff will spark the long-awaited correction.  All the indicators say we're due for a pullback, and those indicators have been saying it for a long time now.  I actually thought this would start last fall.  I guess the AI bubble delayed everything a bit.  But it looks like now it might actually be here, and if it is, y'all had better hold on tight, because the bottom is a long way down.