Global Economy and Tech Face Uncertain Future

The article discusses the potential risks facing big tech companies, particularly in the digital advertising sector. While the artificial intelligence (AI) boom is a concern, another risk lies beneath the surface: digital advertising, which accounts for a large share of big tech's revenues, may not be as recession-proof as previously thought. The article suggests that digital ads may be vulnerable to a downturn, having previously shrugged off the 2008-10 and 2020 recessions. The author questions whether Meta and Google ads are truly recession-proof and highlights the potential impact of a future recession on the digital advertising market.

The article discusses the recent stellar performance of emerging markets (EMs) and questions whether this trend can continue. Historically, EMs were expected to offer high returns due to their superior growth rates compared to advanced economies. Despite the IMF noting that emerging and developing economies have consistently grown faster than advanced ones this century, their stock markets have not always reflected this growth, with MSCI's index of EM shares taking until 2021 to recover its 2007 peak before crashing again. The article suggests that there are more substantial reasons for EMs' current success beyond the narrative of 'sell America' and invites readers to consider the factors at play.

The Economist's finance and economics section features various articles discussing global economic trends, trade, and finance. Key topics include hedging against market crashes using AI, Hong Kong's resurgence as a financial hub, and the implications of Donald Trump's Fed nominee, Kevin Warsh. Other articles examine the dollar's potential decline, emerging markets' performance, and the impact of AI on big tech. The section also touches on trade relations between America and India, the fate of Japan's foreign portfolio, and the weakness of the yen.

The article discusses how to protect investment portfolios from a potential market crash, drawing parallels between the current AI hype and the dotcom bubble of 2000. It highlights the uncertainty and challenges of hedging against a bubble, citing the recent advertising of Claude, an AI chatbot, during the Super Bowl as a potential indicator of market mania.