Keep in mind however, it was the Nasdaq that lead us higher out of our previous major market meltdowns. Many investors view tech mega caps like Apple and Microsoft as relatively "safe" havens, especially with their massive piles of cash on hand. That keeps them pretty well insulated from rising rates. However, there is starting to be a lot more concern about how much longer the US consumer can hang on as both inflation and interest rates look to remain elevated for an extended period of time.
It's worth noting a report from Wells Fargo analysts yesterday that warned consumers are increasingly relying on credit as their pandemic-era savings dry up. The analysts also noted that credit is getting more expensive and likely to become harder to access in the wake of the banking crisis. Meaning consumers might not be able to maintain current spending levels much longer if they are paying increasingly higher interest rates on their credit card balances and banks are tightening lending standards. Those that do have available credit may obviously be leery of using it with interest rates this high. Interestingly enough, Consumer Confidence is actually strong right now even though the survey period included the week after US bank failures. In fact, the gauge actually ticked up for March. The details reveal a less optimistic view of the future, however.
For 12 of the last 13 months (including March) the "Expectations Index" has been below 80, the level which often signals a recession within the next year. Consumers also reported jobs being "less plentiful" while their inflation expectations remain elevated at +6.3%.
Bottom line, consumer spending - the backbone of the US economy - has been strong to this point but is at risk of hitting the skids, which could cut profits across multiple sectors, including many big tech companies.
Investors today will be taking a close look at Weekly Jobless Claims as every one is on the lookout for signs the economy might be starting to take a downward turn. The 4-week moving average is currently at a very low 196,000. The final estimate of Q4 2022 Gross Domestic Product (GDP) is also out today and expected to hold at 2.7%.
Record Robot Sales, Replacing Some High Cost Labor: US companies continue to invest in industrial robots at record levels to address ongoing labor shortages and higher wages, in addition to boosting productivity growth. In fact, According to a report from the Association for Advancing Automation (A3), North American companies ordered 44,196 robots valued at $2.38 billion last year, up 11% from the previous year. If you want to find out more about the latest in cutting-edge robotics as well as vision, artificial intelligence, motion control and more, you can attend the "Automate 2023" conference scheduled for May 22-25 in Detroit.
Activity Stalls in Top US Oilfields as Outlook Sours: U.S. oil and gas activity stalled in the first quarter as production gains slowed and drillers' outlooks turned negative, according to a survey released on Wednesday by the Federal Reserve Bank of Dallas. The bank's activity index, which measures conditions among oil and gas firms across prime oil production portions of Texas, New Mexico and Louisiana, tumbled to 2.1 from 30.3 in the fourth quarter of 2022. Companies reported rising costs for a ninth straight quarter and said this year's weaker prices for oil and gas are hurting cash flow and profits. Overall, a company outlook index turned negative, falling 27 points to -14.1. The survey was conducted among 147 oil and gas firms between March 15 and 23, a period in which oil prices were faltering on concerns about the global banking industry. WTI will trade around $80 a barrel by the end of the year, survey participants forecast. Natural gas prices, which are down roughly -50% from the start of the year and were trading below $2 per million British thermal units on Wednesday, are anticipated to end the year at $3.43 per MMBtu, participants said. Source Reuters
$335,000 Pay for ‘AI Whisperer’ Job Appears in Red-Hot Market: Everybody is talking about the artificial intelligence behind ChatGPT. Less noticed is a jobs market mushrooming around the technology, where these newly created roles can pay upwards of $335,000 a year. And for many a computer engineering degree is optional. They’re called “prompt engineers,” people who spend their day coaxing the AI to produce better results and help companies train their workforce to harness the tools. Over a dozen artificial intelligence language systems called large language models, or LLMs, have been created by companies like Google parent Alphabet Inc., OpenAI and Meta Platforms Inc.. The technology has moved rapidly from experiments to practical use. As the technology proliferates, many companies are finding they need someone to add rigor to their results. “It’s like an AI whisperer,” says Albert Phelps, a prompt engineer at Mudano, part of consultancy firm Accenture in Leytonstone, England. “You’ll often find prompt engineers come from a history, philosophy, or English language background, because it’s wordplay. You're trying to distill the essence or meaning of something into a limited number of words.”. Source Bloomberg
Wall Street's Sharks Circling "Dumb" Banks: Not all banks are created equal. Some bank failures, like those in 2008, have the power to paralyze the entire global economy, and others, like the ones we're seeing now, are simply painful illustrations of what happens when avarice is exposed. "This was NOT a systemic event," the famed short-seller Jim Chanos, the founder of Chanos & Company, told me. "This was a duration-mismatch problem. It only affects a few really dumb, greedy institutions." Dumb because they were run by bankers who failed to do the business of banking or manage risk. Greedy because the bankers behaved that way in order to make as much money as they could as fast as they could. "The basic problems financial markets have today, particularly in the US, is that they continue to be priced for everything to go right," Chanos said. The cataclysmic shift in interest rates and risk is creating pure chaos — but while this chaos will wipe out some people, it can be an opportunity for others. Source Insider
Business Leaders Call for 6-Month Ban on Creating Powerful A.I.: Elon Musk and Apple cofounder Steve Wozniak are among the prominent technologists and artificial intelligence researchers who have signed an open letter calling for a six-month moratorium on the development of advanced A.I. systems. In addition to the Tesla CEO and Apple co-founder, the more than 1,100 signatories of the letter include Emad Mostaque, the founder and CEO of Stability AI, the company that helped create the popular Stable Diffusion text-to-image generation model, and Connor Leahy, the CEO of Conjecture, another A.I. lab. The letter urges technology companies to immediately cease training any A.I. systems that would be “more powerful than GPT-4,” which is the latest large language processing A.I. developed by San Francisco company OpenAI. It is the potential of these systems to do many different tasks that has made many afraid about the potential for job losses from the deployment of such systems in business. Others fear that such systems are a step on the path towards A.I. that might exceed human intelligence, with potentially dire consequences. Source Fortune
Apple Sets June Dates for Developer Conference: Apple set the date for its annual Worldwide Developers Conference for early June, when it is expected to reveal its newest technology. Some are hoping to see a much-anticipated virtual reality headset. This year it will be streamed online on Apple's website from June 5 to 9, with a first day in-person event also set aside for developers and students at its Cupertino, Calif., headquarters. CEO Tim Cook gives the key note speech at the in-person event and often introduces the newest iPhone, iPad, Apple Watch, AirPods, or Macs. Speculation this year is that Apple will unveil its virtual and augmented reality headset. Apple’s VR project would come at a time when other companies are turning their focus away from the metaverse, including Meta Platforms. Disney just announced it was shutting down the business that was developing its metaverse initiatives, and Microsoft has shut down a social virtual reality platform it bought in 2017. Source Barrons
We have alternatives that are low in correlation to traditional stock & bond portfolios. They are liquid and transparent. Minimums and fee structures vary and some are performance based only. Returns we can share are NET of Fees.
If you want to learn more, just let me know what works to learn more about your needs.
Schedule A Call Now
Futures trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Futures trading is not suitable for all investors.
Nell Sloane, Capital Trading Group, LLLP is not affiliated with nor do they endorse, sponsor, or recommend any product or service advertised herein, unless otherwise specifically noted.
CTG Daily Commentary is published by Capital Trading Group, LLLP and Nell Sloane is the editor of this publication. The information contained herein was taken from financial information sources deemed to be reliable and accurate at the time it was published, but changes in the marketplace may cause this information to become out dated and obsolete.
It should be noted that Capital Trading Group, LLLP nor Nell Sloane has verified the completeness of the information contained herein. Statements of opinion and recommendations, will be introduced as such, and generally reflect the judgment and opinions of Nell Sloane, these opinions may change at any time without written notice, and Capital Trading Group, LLLP assumes no duty or responsibility to update you regarding any changes. Market opinions contained herein are intended as general observations and are not intended as specific investment advice.
Any references to products offered by Capital Trading Group, LLLP are not a solicitation for any investment. Readers are urged to contact your account representative for more information about the unique risks associated with futures trading and we encourage you to review all disclosures before making any decision to invest. This electronic newsletter does not constitute an offer of sales of any securities. Nell Sloane, Capital Trading Group, LLP and their officers, directors, and/or employees may or may not have investments in markets or programs mentioned herein.