Interest Rates, AI, and Inflation at CNBC’s Delivering Alpha Investor Summit

On September 28, 2023, CNBC’s Delivering Alpha Investor Summit drew fund managers and investors discuss investment trends amidst inflation, geopolitical risks, and the impact of artificial intelligence (“AI”) within the financial markets.

The event featured panels on private and public markets, headlined by prominent speakers including Katie Koch, CEO of TCW Group; Brad Gerstner, CEO, Altimeter Capital; Bill Ackman, CEO, Pershing Square Capital Management, among others.

A few themes discussed on various panels during the conference included:

Impacts of Rising Interest Rates

During a panel titled “The Long and Short of it All,” the speakers concurred the economy is showing signs of weakness with high inflation and interest rates that will play into corporate earnings. Risk aversion has increased in the market and investors have been more bullish on bonds and cautious on equity markets. “There will be more dislocation ahead as capital reprices…..It pays to be patient as higher rates work through the system,” Koch said.  

Investors are generating a return while maintaining increased levels of cash/treasury positions. On the consumer front, there has been downward pressure on spending as credit card levels increase and savings are depleted.

An Outlook on AI and Tech

AI and other emerging technologies continue to impact the economy and people’s day-to-day life, according to the panelists who spoke on “Betting on the Future.” AI has become prevalent in business with new bots such as ChatGPT, which already has millions of users. The panelists concurred it will enable advisors to increase efficiency and spend less time on standard workflows.

“As an investor, we overestimate in the short-term, but we dramatically underestimate the impact of the future decades,” said Gerstner, who said we are in the beginning of one of the largest tech booms. Despite certain AI stocks that have significantly run up in value like Nvidia, technology companies will continue to deliver value in the future decade.

Investing in an Inflationary Environment

During a panel titled “Ackman on Alpha,” Ackman painted a cautious outlook on the short-term future of the economy and discussed investments made abroad. For his portfolio, he emphasized owning high-quality companies that have pricing power and can do well in midst of an inflationary environment, which include Alphabet.

Ackman, who referred to himself as a Warren Buffett devotee and learned from his investment fundamentals, discussed his successful investment made in Ukrainian-based company, Zipline. The drone-based medical supplier facilitates medicine, food, and essential deliveries and mobilized goods across the country in a critical time.

Navigating the Future

Attendees gained relevant content regarding the impact of AI and the state of the markets including geopolitical factors that can be used to navigate the market for the remainder of the year and beyond. The panelists left the audience with lingering thoughts regarding what stage we are in the economic bubble and how it will affect industry sectors in the coming year.