AI skeptics like Timothy Casaletto are having a tough stretch.
The artificial-intelligence frenzy that fueled a record run for stocks has left the biggest fund he manages starkly underperforming the S&P 500. The Vanguard Dividend Growth Fund is up 55% over the past four years, compared with a return of 126% for the S&P 500, through Friday.
"The last four years have not been fun," says Casaletto, a portfolio manager at Wellington Management who started co-managing the fund in July and was previously an analyst on the team.
Now, the AI trade is starting to show signs of entering a new stage. Companies with weaker balance sheets and higher sensitivity to rising borrowing costs are receiving greater scrutiny from investors.
Below, some of the best analysis and insight from WSJ writers and columnists, the Dow Jones Newswires team and occasionally beyond, on investing, the wealth-management business and more.
Planning & Investing
How to Play the Retreat in Defense Stocks
Smaller defense companies have fared worse recently, presenting a possible buying opportunity.
Market Talk
From Dow Jones Newswires
European media stocks have bounced back in recent months even as earnings expectations remained largely stable, which suggests investors' AI fears on the sector are receding, analysts at (Citi) say in a research note. As the market reassesses its view on perceived AI risks, Citi says it favors companies with improving organic growth prospects or those whose share prices have room to recover and cites the U.K.'s Informa and the Netherlands' (Wolters Kluwer) as its preferred picks. Citi also starts coverage on Germany's (Springer Nature) and (CTS Eventim) with buy and neutral recommendations, respectively. It also cuts its recommendation on Britain's RELX to neutral from buy, citing its valuation. (adria.calatayud@wsj.com)
The Bank of Canada has no reason to raise rates next week based on the results from its quarterly business and consumer surveys, says economist David Rosenberg. The head of Rosenberg Research says the results indicate sentiment among firms and households range from "mixed to bad." Prospects for sales growth and hiring expectations remain below long-term average, while firms' suggested a pullback in investment, perhaps tied to increased trade uncertainty. Rosenberg adds that 53% of consumers anticipate a recession in the next 12 months. Further, he says, consumers expect income growth to slow and anticipate pulling back on spending. (paul.vieira@wsj.com; @paulvieira)
Barron's Advisor
AI Could Disrupt Financial Planning. How One Wealth Manager Plans to Stay Relevant.
Mitch Stein discusses how his firm, Arena Private Wealth, is a private- and capital-markets player in addition to being a wealth manager.
Business & Practice
Netflix, America's Dominant Streaming Service, Has Hit a Wall
Company overhauling creative leadership as it struggles to get domestic audiences to watch more.
Impact Investing
Gene Editing Is Giving Crops a Way to Tell Farmers When They're Feeling Stressed
Startups are designing plants that glow or turn purple when disease or pests strike, empowering farmers to act quickly without widespread chemical use.
Talking Points
Four Financial Lessons From the Hedge-Fund Divorce Captivating Wall Street
John and Laura Overdeck have been engaged in a monthslong trial that could produce one of the largest divorce settlements in history.
Travel & Lifestyle
100 Selfies, Zero Sleep: A Day in the Life of Carnival's Star Cruise Director
Kyndall "Fire" Magyar spends very long days jumping from game-show host to party planner to problem solver.
Beyond the Newsroom
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