"WHAT INDUSTRY IS GOING TO BE NEXT?" - AI Disruption Hits Brokerages, Gary's Big Warning
🚨 AI DISRUPTION - NEW VICTIM: FINANCIAL SERVICES/BROKERAGES
Around 10am - "Out of Nowhere"
Gary: "All of a sudden, I notice, first thing I notice was Charles Schwab. Out of nowhere goes from flattish, down a little, to down $7, $8."
The Carnage (All on Big Volume):
- Charles Schwab: Down $8, cracking all recent gains, breaking 50-day
- Stifel: Down $5 to $125 (was down $9, recovered some)
- Raymond James: Down almost 9%, $15 - "was on the verge of breaking out of range to the highs, and just croaked"
- LPL Financial: Down $32 (was down $43 at one point)
- Ameriprise: Down over $33 (was down $40) - "the great Ameriprise... was on the verge of breaking out to new yearly highs"
- Morgan Stanley: Down $4.50 (was down $9) - "has an arm of brokerage"
- Exchanges hit too: CBOE, ICE (Intercontinental Exchange), NASDAQ (NDAQ)
THE TRIGGER - Altruist AI Tax Tool:
"Out of nowhere comes some news about AI. A broader sell-off, the sharp decline came after tech platform Altruist announced the launch of a new artificial intelligence powered tax planning tool with something called its Hazel platform."
"The new capability allows financial advisors to create personalized tax strategies for clients by automatically analyzing tax forms, financial statements, and other documents within minutes."
"Market observers link the financial stock sell-off to growing concerns that AI potentially disrupts to traditional financial services and their business models."
🔥 GARY'S BIG QUESTION - "WHAT INDUSTRY IS NEXT?"
Gary: "The reaction follows similar AI-related sell-offs in software, and you already know about the insurance stocks and insurance sectors in recent days, which has me posing the question, what industry is going to be next? And am I going to be in it and get knocked because somebody comes out with something?"
"A valid question to ask because they smoked the insurance stocks, they smoked the software stocks, and they smoked a bunch of the financial services stocks today."
"And may I state for the record, they went down very quickly and they went down hard. Some better than others, others worse than others."
Gary's Honest Answer: "My answer to all this is I do not know. I don't know what industry could be next. I do not know."
"All I know is for market players, you'll be on your toes. It's not a reach for me to have to spend some time thinking about what could be next."
Email from Listener: "I got an email from somebody who says, Gary, I can tell you firsthand, people are getting fired and being replaced with artificial intelligence thingamabobs."
"I emailed them to send me specifics. They told me certain industries, same ones I'm talking about."
Gary to listeners: "If you have any ideas, email me. I'd like to hear what you think."
💀 SOFTWARE - BOUNCES MAY BE OVER
Gary's Warning on the Bounces:
"I keep saying be careful of them bounces. I keep saying that because these stocks before last week's crash were already in bear markets."
"I'm worried, listen carefully, that the last two days in change were nothing more than oversold bounces, which are normal when you get stretched away to the downside. That is not a prediction."
"What we are saying is they're still in bear markets, notwithstanding bounces. They're still in downtrends, notwithstanding bounces."
Today's Action - Not Good:
- Microsoft: Up almost $10 today, finished down/flat
- Gary: "Don't want to see that, off of a nascent rally"
- Volume contracting as they bounced - red flag
Gary's Confusion: "I was reading up on why these software stocks were getting hit. And I must tell you, when it comes to technology, I'm somewhat of a doofus. I don't really understand how you take the place of these companies. I really don't, but the market believes it and they've crumbled some names."
📊 Market Action
- Dow: Up 300 early, finished +52
- NASDAQ: -136 | NASDAQ 100: -140
- NASDAQ/NASDAQ 100: Still below 50-day MA
- SOX (Semiconductors): Down 55 (not much)
Dow Movers:
- Amgen: -$11 (after up $30 in 3 days on no growth)
- Goldman: +$5 (was up $18, was also down $12 - "all over the map")
- American Express: Up $3.50 (was up $10 intraday)
- Home Depot: +$8 (10-year yield helped)
- Microsoft: Up $10, finished flat/down
- Coke: Up $1 on earnings - "whoopee"
Semiconductor Weakness:
- SanDisk, Seagate, Western Digital hit today
Gary's Warning: "If the semis fall again, the NASDAQ and NASDAQ 100 are going to be in trouble."
📈 10-YEAR YIELD - Big Drop Helps Housing
Yield: Dropped to 4.14 (from 4.2+ recently)
Result: "Strength in housing and housing-related"
On crappy retail numbers: "Home Depot up 8 on a big drop in the 10-year yield today. On very crappy retail numbers."
🏨 HOTELS - Big Move on Marriott
Marriott:
- Reported: 5% earnings growth, 4% sales growth
- Guidance: "Eh"
- Stock: Up $28 to $359 (8.5%)
- Gary: "That was an amazing move for a Marriott"
Lifted Group:
- Hilton: +3%
- Hyatt: +6%
- (Both report in next two days)
📉 Bear Market Bounces - Be Careful
Spotify:
- Up $60 today
- But: Stock went from $745 → $400
Ferrari:
- Up $27 today
- But: Stock went from $520 → $330
Gary: "Be careful about the big moves in the bear markets."
🌍 FOREIGN MARKETS - Stronger Than US
Gary: "Foreign markets remain stronger than ours. I don't know how long that'll last."
"Keep in mind foreign markets are less liquid than our markets because they're a lot smaller. But leave no doubt, I'm looking at different countries."
Big Moves:
- Japan: Big move
- Israel: "Smoking" (symbol EIS)
- Turkey: Big move
Not Working:
- China: "Pretty much dead as of recent"
Gary: "I never had to really invest in foreign markets because they weren't working that great. They are now."
🏛️ GARY ON TRUMP - "Going to Lose in November"
On the Election: "I want him to do well, but I think they're going to lose the election in November because of him. Unfortunately, not because of his policies. It's because of him."
"If I'm exhausted by him, what do you think most independents are?"
But When Good Policy: "But when he does good policy, I praise. They did something today that I absolutely love. Absolutely love."
(Context: Climate change policy - Gary calls climate change "a hoax and nothing but a gargantuan money grab")
📊 MARKET STRUCTURE SUMMARY
Gary's Assessment:
"Big indices remain in range. The mids and smalls moved above a little range. Foreign markets better."
"NASDAQ and NASDAQ 100 still can't get out of their own way."
"The software stocks were affected by the AI and bounced for three days, but they may have hit the proverbial wall already."
"They hit the insurance stocks because of AI. They got the brokerages today. Whether or not that lasts, I have absolutely no idea. But we'll be on it."
Gary's Key Quotes
On AI Disruption: "Which has me posing the question, what industry is going to be next? And am I going to be in it and get knocked because somebody comes out with something?"
"They smoked the insurance stocks, they smoked the software stocks, and they smoked a bunch of the financial services stocks today."
"They went down very quickly and they went down hard."
"All I know is for market players, you'll be on your toes."
On Software Bounces: "I'm worried... that the last two days in change were nothing more than oversold bounces."
"They're still in bear markets, notwithstanding bounces. They're still in downtrends, notwithstanding bounces."
On Microsoft: "Up almost $10 today and finished down. Don't want to see that, off of a nascent rally."
On Semis: "If the semis fall again, the NASDAQ and NASDAQ 100 are going to be in trouble."
On Foreign Markets: "I never had to really invest in foreign markets because they weren't working that great. They are now."
On Trump: "If I'm exhausted by him, what do you think most independents are?"
Bottom Line
Gary's Big Warning: AI disruption is hitting industries sequentially - first software, then insurance, now financial services/brokerages. "What industry is going to be next? And am I going to be in it?" He genuinely doesn't know the answer. Brokerage stocks crashed "out of nowhere" on Altruist AI tax planning tool announcement. Software bounced 3 days but may have hit wall already (Microsoft up $10, finished down). NASDAQ/NASDAQ 100 still can't break above 50-day. If semis fall, NASDAQ in trouble. Foreign markets (Japan, Israel, Turkey) stronger than US. 10-year yield drop to 4.14 helping housing. Gary expects Trump to lose November election "because of him, not his policies."
Key Takeaway: Gary is genuinely uncertain about where AI disruption will strike next. He's asking listeners for ideas. This is a new market paradigm where industries can get "smoked" quickly and hard by AI announcements.
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