In this update we review the results of the most recent Russell 1000 Large Cap Value annual Style Index rebalance that occurred on June 23rd. We also compare the exposures of the Russell 1000 Value index versus the S&P 500 Value index at 06/30/23 and consider the potential impact of factor and sector differences between the indexes on investors targeting large cap value exposure.
In a paper entitled Generative AI – Hope, Hubris, or Harrowing, our CIO, Tina Byles Williams, explored the medium to long-term effects of Generative AI on the economy, financial markets, and broader society. The task for investment managers now lies in navigating this promising yet unpredictable future, particularly as the market has priced in substantial premiums for those perceived to be the primary beneficiaries of this emerging technology.
As we embark on the second half of 2023, we find a market in conflict. Despite the continued (relative) hawkishness by the Federal Reserve Open Market Committee (FOMC) and its members, most risk assets have continued to perform well.
The second quarter of 2023 saw US equities climb higher powered by large cap growth companies leveraged to the AI (Artificial Intelligence) theme. A pickup in soft-landing expectations seemed to be among the more powerful tailwinds for equity markets.
Generative Artificial Intelligence (AI) models such as ChatGPT represent a transformative leap in the ability of machines to exhibit human-like behavior and to learn autonomously. AI can now surpass humans in a wide variety of cognitive tasks. Accordingly, a recent paper out of the University of Pennsylvania concluded that large language models could displace at least 10% of work tasks, affecting 80% of the US workforce.
Unless you’ve been on an island without cell phone coverage for the past several days (in which case, good for you!) you are certain to have heard of the non-coup, coup attempt in Russia over the weekend.
