October 30, 2023

Google to Invest 2 Billion Dollars in Anthropic

📰 News Organizations

  • Google to Invest 2 Billion Dollars in Anthropic. The commitment involves a $500 million upfront investment and an additional $1.5 billion to be invested over time. The creator of the Claude 2 chatbot was valued earlier this year at $4.1 billion.

  • GM, UAW Move Closer to a Tentative Labor Contract. The two sides negotiated throughout Thursday night and into Friday morning, and reconvened in the early afternoon in a push to secure a deal.

  • Goldman Says Souring US Growth Views May Create Stocks Bargains. Markets have grown more pessimistic about the outlook for US economic growth, and if that continues in a substantial way it may offer a chance to buy stocks, according to Goldman Sachs.

  • X Launches Two New Premium Tiers. On Friday, began offering a $16 monthly tier called Premium+, which is more expensive than its previously existing option and offers the benefit of not showing the user ads in the For You or Following feeds.

  • Saudi Arabia Seeks Trade Deals, Mulls BRICS Offer. Saudi Arabia is looking to sign more free trade agreements and still considering joining the BRICS club of emerging nations, as it looks to boost non-oil exports, according to the kingdom’s minister of economy and planning.

  • Everything Apple to Launch at Oct. 30 ‘Scary Fast’ Mac Event. Apple Inc.’s last product unveiling of the year kicks off on Monday, when the company is set to update a device that’s coming up on its 40th anniversary: the Mac.

🐦 Twitter

  • The NYSE new lows list peaked on October 3rd. Since then, the US 10-year Yield has gone on to make new highs, but the US Dollar has not. This divergence is front and center for me as the biggest catalyst to get a year-end rally going for stocks. Source.

  • We seem to be entering a new era of Fiscal Dominance, in which the US government runs persistent deficits (which could force the Fed to be buyer of last resort). That likely has implications for the 60/40 investment strategy. Source.

  • Monthly personal spending grew 0.7% (above est of 0.5%), while income grew 0.3% (below est of 0.4%). That's the fourth straight month of spending > income. To do this consumers are either dipping into savings or taking on debt. Or both. Source.

  • The KBW Bank Stock Index is now trading below its May 4th close. A continued "bank walk" of deposits out of banks to higher-yielding money market funds and T-Bills, continuing the squeeze of Net Interest Margins and overall profitability. Source.

  • No recessionary bear-market bottomed before the onset of recession. If a recession lands over the following months, history says $SPX will probably bottom below its October 2022 low. Source.

Normally higher yields make bonds more attractive to buyers. But with Treasuries, as yields rise they become even less attractive. That's because higher yields also result in larger budget deficits, raising the risk of default or inflation.

Peter Schiff

📓 Online Publications

  • Multi-Family Delinquencies Decreased To 0.24% In September. Up from 0.13% in September 2022. The multi-family delinquency rate increased recently as rent growth has stalled, vacancy rates have increased, lending tightened, and interest rates have increased sharply.

  • Private Equity Silver Lake Is Preparing A Takeover Bid For Endeavor. Silver Lake already holds a 71% voting stake in Endeavor, making it likely that a deal will go through. Endeavor had also previously said it was considering strategic options.

  • Biden Administration Backs Plan to Convert More Offices to Homes. The initiative provides new financing and technical assistance to developers and local government and highlights grants and tax incentives that can make conversion projects more attractive.

  • Home Prices Continue To Simmer. Beyond the weekly data, the median listing price has hovered within 1% of the prior year’s price for about six months. As a result, some buyers unable to overcome the mortgage rate and home price highs are simply sitting on the sidelines.

🎧 Podcasts

  • Morgan Stanley Announced Its Pick For New CEO. Starting in January, the new CEO will be Ted Pick. He’s been at the bank for decades. Pick’s taking over from James Gorman, who announced earlier this year that he was stepping down. Source(1:53)

  • AI's Creative Potential Challenges Sentiments. The current AI hype revolves around using generative tools for creating immersive digital content and interactions. Contradicting that the metaverse is obsolete, as AI continues to advance digital experiences. Source(12:21)

  • Bitcoin's Appeal Grows as Rates Remain at 5%. If interest rates stay at 5%, investors will search for assets with over 10% growth, making cryptocurrencies appealing, as Bitcoin could outperform traditional assets struggling against consistent fed funds rates. Source(22:04)

  • Small Businesses Now Paying 10% Interest on Short-term Loans. The blended interest rate, due to borrowing in 2020 and 2021, is below 4%, while 33 million small businesses contends with a 10% interest rate on short-term loans, significantly impacting them. Source(36:20)

  • Market Concerns Cast Doubt on Year-End. Lack of performance chasing and taxable losses to offset gains this year raises doubts about the a year-end seasonal effect, increasing expectation that the S&P might remain unchanged for the year. Source(15:00)