Wall Street saw another day of losses in the market amid continued concerns over the banking sector and as investors digest the latest inflation data. Francis Oh, Asia-Pacific CEO of Qraft Technologies, joined Cheddar News to break down what can be expected with the Federal Reserve's move on interest rates and what to look out for with A.I. stocks, which are seeing big gains.

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Analysts Discusses Week's Market Losses Amid Banking Concerns, Inflation

Joining me now is Francis O Asia Pacific, Ceo of Craft Technologies and A I driven investment firm Francis. Thank you so much for coming on the show. A mixed market today. What should investors know? Um Yeah. Um Thanks, first of all, thanks for having me. Uh This is big market today. Uh But at the same time, we are having a uh not so much as uh the May um in this year uh because sometimes uh may are selling the may um go away um for the cover of November is coming. But this year also R AM O is indicating that uh maybe selling the may phenomenon may not coming in this year 2023. So let's walk through some of the inflation data, Francis because that does seem to be moving markets this week or at least, right, in focus, of course, as the fed is expected perhaps to pause rate rises in June. What's the take away from the inflation data? Um Inflation data is very um positively progressing. Um As you are seeing the producer price index is all coming down to the um still the higher and the 2%. But um is coming down to 2% which is two year uh right now, which is affecting the, the easing the pressure from um commodity prices. Um If you look at the, the Bloomberg commodity index for the last one year, that index is already dropping more than 20%. And uh finally, we are seeing that the the transition of the easing inflation concern from the commodity prices impacting to uh the the producer price. And it will be also translated into the consumer price index uh in the later part of this year, which is the uh it could be very promising. Um Sorry for the the stock market investors because the, the the the major major concern we were watching the, the last year and the only part of this year was the inflation driven the and the higher interest rate environments. Um And it looks like it may be, we are seeing the different market in the later part in the 2023. Well, let's talk about artificial intelligence because that's been a key focus, I think for companies and investors certainly have been interested in it this year. Your company that you work at craft Technologies is a I driven investment firm. Where are the opportunities there, Francis. Um We are um seeing the opportunity in the couple of different areas. The first of all the in the in the areas or the, the, let's say the top down areas uh for the top down areas for the the US equity market. We are seeing the the current the market situation is becoming more positively on the changing to the investors because we are seeing the, the, the sorry, the three uh the major the the market input data that our A I model is uh the same most important at this moment is the, the first of all, the fertility is coming down in the US stock markets uh fixes a summer trading, the 16 level which is one year low right now. And also the uh more importantly, the correlation between the the US Treasury and US equity market is coming back to the normal state which is negatively correlated, which has been the positive lady for the uh over the time for the last 1.5 years. Uh Finally, we are coming back the relationship between the commodity. I'm sorry, the relation between the fix income and equity is back to the normal. And also the one last one is the uh also connected back to the uh your previous comment on the um the inflation and restriction that we are seeing the momentum prices, uh the significantly dropping over the last one year. And that also give a the um investment opportunity for the market right now. So you see it as an investment opportunity Francis of course volatility, as you mentioned, there probably not going to go away any time soon but that some of these data points do indicate positives, is it positive for the overall market or just certain stocks and sectors? Right? Um First of all the positively overall in the stock market, but if you want to look at into the specific sectors, um the areas, um our A I model is a bit more favorable um to the, the consumers and I T sectors at this moment, but still not so much favorable, favorable to the um the the the financial sectors or the real estate um as well as our health care. Um based on our um internal analysis for the, our A I models decision is the um especially for the, the, the sectors that our model is not in favor the financials and real estate. We are seeing a lot of the, the, the the wind, still seeing the market, the regional bank crisis is not yet fully solved. And the um despite there is a lot of uh attempt and then the aid from the the market industry and the government, but still um there is the, the risk is is there. Uh and also the real uh the commercial real estate sector is becoming another possible. Um The, the, the trigger for the um the the possibly short term market of the um I wish it's not coming. Um But we are seeing some of the potential is increasing over time for the last couple of months and for the the health care sector is that, that is the uh typically considered as uh inflation protect the sector. But right now, we are seeing the inflation has been already to pick out for the last 5 to 6 months. And that is the reason for our AM model is not so much favorable on those health care and then financials. But at the same time, we are seeing the consumer and I still see the upside potential as well. All right, Francis, Asia Pacific, Ceo of craft technologies and A I driven investment firm Harding A I to make those forecasts. Francis. Thank you.