A renowned market bear who called the dot-com bubble warns the AI and economic recovery narratives fueling stocks are weak – and says the Fed is fueling a bubble as valuations get ‘frothy’

• Societe Generale’s Albert Edwards is skeptical about AI’s impact on earnings, despite the hype.
• He also doubts the notion that the US economy is in a broad recovery.
• Edwards cites a decline in analyst optimism, suggesting the market is detached from fundamentals.

The S&P 500 has rallied a staggering 27% since October, thanks in large part to optimism around artificial intelligence’s potential impact on corporate profits, as well as the US economy’s ongoing resilience amid rate hikes. Or at least those are the prevailing narratives among investors.