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AI Profits and the Plateau Economy · The SPY Trader

• 0:00
  Hello there, everyone!
• 0:01
  I am Sunny Sideup, and you are listening to another episode of the Spy Trader podcast.
• 0:06
  It is currently 2:30 pm on Wednesday, October 14th, 2026, here on the Pacific Coast.
• 0:11
  We have a lot to unpack today in what economists are calling the Plateau Economy.
• 0:16
  The S&P 500, which many of you track through the SPY or VOO ETFs, is hovering near alltime highs as we kick off a very busy thirdquarter earnings season.
• 0:25
  It is a bit of a balancing act right now—we have strong corporate results on one side and a cooling labor market on the other, which has pushed unemployment up to 4.3 percent.
• 0:35
  This morning, the big banks gave us a great start.
• 0:38
  Goldman Sachs beat expectations, citing a massive surge in mergers and acquisitions.
• 0:43
  This shows that corporate America is finally ready to spend that dry powder cash they have been holding onto since 2024.
• 0:50
  This has been a huge boost for the Financials Select Sector SPDR Fund, or XLF, especially with major players like JPMorgan Chase reporting robust net interest margins.
• 1:00
  Over in the tech world, we are seeing a fascinating shift.
• 1:03
  We have moved past the phase of just buying chips and moved into the AI Application phase.
• 1:09
  The Invesco QQQ Trust is showing that software companies are seeing significant margin expansion from AIdriven automation.
• 1:15
  Even with those new AI Safety Accords between the US and the EU causing a brief dip for Microsoft and Alphabet yesterday, the market is now viewing this as regulatory certainty rather than a hurdle.
• 1:27
  On the macro side, the Federal Reserve is playing it cool with a pauseandhold strategy, keeping the federal funds rate at 3.75 percent.
• 1:35
  Inflation has settled at 2.4 percent, and the 10year Treasury yield is hovering around 4.1 percent.
• 1:41
  This has actually made fixedincome ETFs like the iShares Core U.S. Aggregate Bond ETF, or AGG, look quite attractive for the first time in years.
• 1:49
  In health care, companies like Eli Lilly and Novo Nordisk are reinvesting their massive profits from weightloss medications into oncology and gene editing, which is heavily influencing the XLV sector.
• 2:01
  Even the Vanguard Real Estate ETF, VNQ, is finally stabilizing as commercial debt gets refinanced at these new neutral rates.
• 2:09
  So, what should you do with your money in this environment?
• 2:12
  If you are looking for growth, you want to focus on the AI monetizers.
• 2:17
  I recommend overweighting the Invesco QQQ Trust and the Technology Select Sector SPDR Fund, known as XLK.
• 2:23
  We are no longer just betting on hardware like NVIDIA; look at software giants like ServiceNow or Adobe that are successfully upselling AI modules to their clients.
• 2:32
  For those of you wanting stability and income, consider the Yield Lock strategy.
• 2:37
  Increasing your exposure to the iShares 20 Year Treasury Bond ETF, or TLT, and the Vanguard Real Estate ETF, VNQ, makes sense because the downside risk for bonds is capped now that the Fed is done hiking.
• 2:50
  For a core, diversified approach, you can never go wrong with a base in the Vanguard Total Stock Market ETF, or VTI.
• 2:58
  I would also suggest balancing that with the Vanguard FTSE Developed Markets ETF, or VEA, because international markets like Japan are finally seeing their corporate governance reforms pay off.
• 3:09
  Finally, consider a five percent tactical hedge in SPDR Gold Shares, or GLD.
• 3:13
  Even with a strong dollar, central banks are still buying gold, making it a great buffer for your portfolio.
• 3:19
  To sum it all up, the market is a bit expensive but very well supported.
• 3:23
  As long as earnings justify the AI premium, the path for the S&P 500 remains upward.
• 3:29
  Stick to quality and keep an eye on those earnings reports!
• 3:33
  Thanks for tuning in to Spy Trader.
• 3:35
  I am Sunny Sideup, wishing you a wonderful afternoon and happy trading!