"AI demand indicators remain bullish across the board"

1. Economic surprise. Citi's Economic Surprise Index has improved to the highest reading since Oct'23.

2. Air travel. "Americans still have the travel bug ... TSA checkpoint data through June 1 shows that air travel stands at 2.58 million, in line with the past two years through the same date and well above the post-pandemic low of 2.19 million in 2022."

3. Central banks vs. gold. "Central banks resumed net gold purchases in April, having bought 17t. This was a rebound from the sizeable net sales reported in March."

4. AI demand. "AI demand indicators remain bullish across the board. Overall, token expenditure looks robust, while the memory chip shortage continues to boost memory chip prices. Meanwhile, Nvidia data centre revenue shows no sign of slowing down, while overall AI adoption remains low".

5. CAPE ratio. And finally, "structural changes in the equity market have diminished the utility of comparing current valuations to historical norms ... An index with a high weight of cyclical sectors tends to have a lower multiple compared to indices where the composition tends to be heavy in growth and defensive sectors."

ICYMI