Franklin Templeton CEO Jenny Johnson: AI is not yet in the system

• Markets are showing resilience, with strong corporate earnings and consumer spending, despite geopolitical risks and sticky inflation.
• Current productivity gains are primarily driven by existing digital and cloud computing technologies, with the full impact of AI still years away.
• The regulatory environment is perceived as friendlier, contributing to business confidence.
• Concerns about the concentration and valuation of 'Mag 7' tech stocks are acknowledged, but tight credit spreads suggest no immediate default risks.

Franklin Templeton CEO Jenny Johnson discusses the market's resilience despite geopolitical risks and Fed rate hikes, attributing current strength to strong corporate earnings and consumer spending. She believes AI's full productivity impact is yet to come, but other technological advancements are already contributing. While acknowledging concerns about tech valuations, she maintains a positive outlook based on underlying fundamentals.