October 5, 2023

Google’s New 'Virtual Assistant' to Include Bard AI Tools

📰 News Organizations

  • Google’s New Virtual Assistant to Include Bard AI Tools. Google plans to add generative AI features from its Bard chatbot into Google's version of a virtual assistant, that aims to provide personalized help with reasoning and generative capabilities on mobile devices.

  • Meta Expands Generative AI Tools to Boost Effectiveness of Ads. Meta’s tools use artificial intelligence to generate background images for products, come up with different variations of advertising copy, or automatically resize ads to fit on Instagram or Facebook.

  • Workers Launch Largest Health Care Strike in US History. More than 75,000 Kaiser Permanente workers are slated to go on strike Wednesday morning, adding to a months-long series of labor disruptions across US industries.

  • Oil’s Slump Extends on Fragile Economic Outlook as OPEC+ Meets. Oil remained under pressure following a widespread selloff in global financial markets, even as Saudi Arabia and Russia reaffirmed that they will continue output curbs until the end of the year.

  • Uber Will Now Pick Up Your Packages. Uber is now offering return package shipping through UPS, FedEx or USPS on its Uber and Uber Eats apps. Customers can send up to five packages at a time for a $5 flat fee or $3 for Uber One members.

  • Apple Gets Downgraded by KeyBanc, Believing Valuation Near All-Time High. KeyBanc Capital Markets Inc., said shares of the iPhone maker are trading near all-time high valuation levels though its sales growth is likely to slow.

🐦 Twitter

  • Home builders are not too happy watching market mortgage rates grind higher day after day. Buying rates down from 7.5%+ is getting increasingly expensive. Resale listings are also finally rising, which should make the Q4 backdrop for builders a bit different than YTD. Source.

  • 5-year TIPs with current real yields at 2.6% will be the most compelling risk-return asset vs. cash over the next couple of years. These bonds are offering boom-level yields at a time when the economic cycle is softening and recent market moves suggest further softening. Source.

  • Yields on junk bonds have surged to 9.25%, still below March highs but still ticking up. Credit spreads aren't insulating corporate bonds from rates-induced pain. Higher borrowing costs are becoming a fundamental risk, and spreads are rising too as a result. Source.

  • Bond yields are tied to supply. The supply of treasuries is tied to fiscal deficits. A gigantic fiscal deficit from an irresponsible Congress forces the Treasury to print massive paper as the Fed tries to dampen the effects of inflation caused by government spending with ineffective rate hikes. Source.

  • Used Car prices moved lower in September for the 4th straight month. Prices are 7% below peak levels in July 2022 but still 26% higher than where they were at the start of 2021. Source.

  • For the professional & business services sector, the job openings rate surged to 7.8% in August … in level terms, not back at its peak, but the monthly change was the largest in history. Source.

A well-diversified basket of financial assets has not been this cheap relative to cash in decades. Looking at a risk-parity basket de-trended shows the recent weakness has brought assets to early 80s levels vs. trend.

Bob Elliott

📓 Online Publications

  • US Firms Added 89,000 Jobs, Fewest Since Early 2021 in ADP Data. Private sector employment increased by 89,000 jobs in September and annual pay was up 5.9 percent year-over-year. This was below the consensus forecast of 150,000.

  • Spotify Makes Audiobooks Free to Paid Subscribers. The streaming company said Tuesday that it would make a selection of more than 150,000 titles available to premium users. Spotify said it aims to expand the audiobook market by offering audiobooks.

  • The National Debt Is Exploding Higher. We saw an increase of $275 billion added to the debt in a single day and the US is on track to add $1 trillion to the national debt in a single month. The United States now has $33.442 trillion in debt.

  • Peloton Goes All-In on Its New Strategy With Lululemon Partnership. Peloton's subscription business is targeting 100 million members. The company's partnership with Lululemon will help it expand, particularly in yoga and floor-based disciplines.

  • Netflix Plans to Raise Prices After Actors Strike Ends. The streaming service is discussing raising prices in several markets globally, but will likely begin with the U.S. and Canada. It has not been revealed how much the increase will be or when.

🎧 Podcasts

  • Oil Trending Sideways to Higher. Oil inventories are decreasing, leading to a sharp rise in WTI spreads. With minimal Cushing inventory, reduced Saudi and Russian production, and steady gasoline demand, the oil market is trending sideways to higher. Source(10:56)

  • Markets Signal End of Sell-Off as Bonds Drop and Yields Rise. Sharp declines in long bonds and U.S. Treasuries, reaching new highs, signal the end of the stock and bond sell-off. The yield curve is steepening, the VIX is at 20, and the Dollar stays high amid rising rates. Source(1:35)

  • Global Sell-Off Amid Rising Rates and Strong Jobs Data. Global markets saw a sell-off, with the Nasdaq down almost 2%, and 30-year US Treasury yields hitting a 16-year high. The consensus is higher for longer rates, reinforced by strong US jobs openings data. Source(4:21)

  • ‘Crimes’ Probe Into Evergrande Founder. Another major development that’s come is the founder of Evergrande, Xu Jiayin. The company has put out a statement saying that he is under mandatory measures because of suspicion of illegal crimes. Source(5:53)

  • Millennials are Saving Enough For Retirement. Millennials are on better track for retirement than GenX with income $9k higher than generations at the same age. The millennials are saving more and earlier due to contributing 401(k). Source(16:25)

  • Mortgage Rates Almost at 8%. This essentially paralyzes the housing market. For a borrower trying to purchase a $400,000 home, 20% downpayment on a 30-year fixed loan, the monthly payment today is about $930 more than it was 3 years ago. Source(6:06)