This article explores why financial markets and the economy often move out of sync, showing that markets typically anticipate future developments—such as policy shifts or recoveries—long before economic data catches up. Using historical examples, it highlights that market rallies can occur even during economic downturns, and emphasizes the importance of understanding index composition and maintaining diversification rather than relying solely on economic headlines. 

In this episode, U.S. Equity Portfolio Manager Grayson Witcher explores the evolving intersection of government policy, innovation, and capital expenditure (CapEx) in U.S. markets. The discussion unpacks how public spending and strategic government stakes—especially in sectors like semiconductors and defense—are reshaping the investment landscape. Grayson reflects on the unique blend of complacency and optimism in today’s markets, the uncertain returns on massive AI-driven CapEx, and the importance of management quality and adaptability in navigating this new era. 

The AI revolution is driving one of the most capital-intensive buildouts in modern history, with data centers at the epicenter of a potential $3 trillion global investment wave. For credit investors, this represents a significant opportunity, but selectivity is paramount—while many projects will succeed, others will stall or fail. Understanding the risks is critical for separating resilient credits from problematic ones.