David Rosenberg: "There Are No More Bears Left" In This Market

Economic growth currently relies heavily on productivity gains rather than labor input, signaling a disinflationary environment that contradicts consensus inflation fears. Despite strong price momentum in equity markets, the consumer sector remains fragile, with real disposable income growth stagnating and savings rates reaching depleted levels. Market concentration in technology and AI-related sectors has reached extreme levels, reminiscent of historical bubbles, as companies increasingly rely on circular financing arrangements and capital-intensive investments. David Rosenberg, founder of Rosenberg Research, warns that current market exuberance ignores underlying risks, such as the potential for a consumer recession and the inevitable mean reversion of valuations. Investors should prioritize risk management and diversification, as the current reliance on a narrow set of hyperscalers and AI-linked capital expenditures creates significant vulnerability to any shift in corporate spending or earnings expectations.