Abby Joseph Cohen warns of uneven economy, unsustainable AI investing

Abby Joseph Cohen has spent decades telling Wall Street what it doesn’t want to hear, usually at exactly the right time. The former Goldman Sachs chief US investment strategist, now a professor at Columbia Business School, is doing it again. In a June 26 interview with Bloomberg TV, Cohen laid out a case that should make growth-stock enthusiasts uncomfortable: US equities are priced to perfection, the labor market is softening, and consumer spending patterns are flashing warning signs about the broader economy. A market with no room for mistakes When she says investors have “no cushion for error,” she’s pointing to a specific dynamic. In a fully priced market, even a modest earnings miss can trigger outsized sell-offs because there’s no valuation discount already baked in to absorb bad news. The softening labor conditions Cohen flagged aren’t necessarily a recession signal. Workers who feel less secure about their jobs tend to pull back on discretionary purchases first. That ripples through retail, services, and eventually into the earnings reports that equity analysts obsess over. The AI trade shows cracks Back in January 2026, Cohen flagged a potential slowdown in growth for AI-r...