RBC: Still the most optimistic about the U.S. stock market this year, focusing on AI-related software
Norman Villamin, Chief Investment Officer of Reyl Bank, stated that he remains optimistic about the U.S. stock market this year, but expects lower returns and recommends focusing on structural opportunities in AI-related software. At the same time, the bank is optimistic about gold, predicting that the price will rise to $3,000 per ounce. Villamin believes that the development of AI will transition from hardware to software, and investors need to adjust their portfolios. Additionally, he expects U.S. inflation to rebound in the second half of the year, with interest rate cuts proceeding at a pace slower than market expectations, advising investors to actively manage bond risks
According to the Zhitong Finance APP, Norman Villamin, Chief Investment Officer of Raiffeisen Bank, stated that this year remains the most optimistic for the U.S. stock market. However, after two years of excellent returns, investors should expect lower returns this year and are advised to explore structural opportunities, including AI-related software. Additionally, the bank continues to be bullish on gold, expecting prices to reach $3,000 per ounce this year.
Last year's surge in U.S. stocks was mainly driven by AI, but it was clearly concentrated in hardware devices. Villamin believes that the development of AI is similar to the rise of the internet in the past, where the initial phase required everyone to upgrade their hardware, and the next phase involves using software. We are now beginning to transition from the hardware phase, and investors need to adjust their portfolios in line with the development of AI, expanding from solely investing in hardware to include software and applications.
The bank expects that Trump's immigration policies will drive up inflation, predicting that U.S. inflation will drop to 2% early this year but rebound in the second half, with a risk of rising to 3% by the end of the year. Therefore, the pace and extent of interest rate cuts will be lower than market expectations, with the Federal Reserve likely pausing rate cuts in the second half of the year.
Villamin also stated that investors should actively manage bond risks rather than solely relying on long-term investment-grade bonds; he recommends that investors adopt a high-yield, low-holding period strategy or consider hedge funds for diversification