Apr 17 • 1HR 2M

#189 - Drake & Weeknd Ai Music, Inflation Falls and The Economy Starts To Crack

 
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The Reformed Millennials Podcast covers a wide ranging topic arc focusing on Sports and Investing. RM Pod is dedicated to identifying the latest trends in technology, sport and investing. We discuss the ways Millennials can leverage these trends to better invest their time, fandom and money.
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  1. Market update

  2. NBA/NHLPlayoff predictions

  3. Thoughts on Ai

  4. Parenting advice with Ai in mind

  5. Recommendations and Predictions

Listen on AppleSpotify, or Google Podcasts.


📈📊Market Update💵📉

Last week we learned:

  • Growth remains above trend.

  • Employment still secularly tight.

  • Wage growth stable at 6-7%.

  • Inflation above target and expectations rising.

  • Banking "crisis" fading.

  • Fed's main concern is still inflation.

US Inflation:

March CPI data came in this week. Headline CPI came in at 5.0% YoY vs consensus of 5.1%. Headline CPI has now fallen for 9 consecutive months. Core CPI came in at 5.6% YoY vs consensus of 5.6%.

The Fed minutes from the March meeting were also released. Interesting, those minutes showed that the Fed expects the United States to enter a mild recession later this year. Time will tell how that effects their rate policy setting.

What I’m Seeing:

Many of the recent breakouts to 52-week highs in stocks haven’t really followed through. The sentiment out of market talking heads is very bearish.

Chart from JC Parets @ allstarcharts

While hedge funds and institutions position for an incoming economic recession, stocks keep getting bought up.

Semiconductors are the undisputed big leader year to date but they have fallen behind in the past couple of weeks. Their relative strength line has been declining as other sectors have picked up.

A lot will depend on the market reaction to earnings in the coming month. The new earnings season has just begun. Big banks like JPMorgan crushed estimates and gapped above their 50-day moving average.

This alleviates some of the concerns about the financial sector which has been keeping the S&P 500 down. Next on deck is Big Tech which reports in the next three weeks.

Much of equities’ resilience in the past month or so can be attributed to declining inflation expectations and a weak US dollar. The dollar has been almost perfectly negatively correlated to the S&P 500. If for whatever reason the US Dollar rallies, equities are likely to have a serious headwind.

Quick Stat Line For Those Skeptical of Generative AI:

ChatGPT has 4x more search interest than peak Ethereum, 30x peak Metaverse and 50x peak Web 3.0. Product-market fit unseen since the iPhone at a minimum.

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"ChatGPT can reason out the answers to novel problems" via Benedictevans

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💸Reformed Millennials - Post of The Week

Jassy and Amazon are democratizing generative AI.

Amazon’s cloud computing division announced new artificial intelligence offerings Thursday, becoming the latest tech giant to try to cash in on generative AI, the technology behind ChatGPT.

Unlike Alphabet's Google and Microsoft, which have announced products for the general public, Amazon’s Amazon Web Services is targeting corporate customers. In addition to new AI tools, the company is expanding access to custom-made chips that it says can run AI software more efficiently and cheaply than competitors.

Read more here: Wall Street Journal

🎙Podcast & YouTube Recommendations🎙

Chinese Monetary Policy: Given the size of China in the global economy, it is as important to understand the PBOC approach to policy as the Fed, ECB and BoJ. This weekend Gov Yi gave a rare speech on monetary and FX policy which is worth listening to in its entirety.

On monetary policy Yi outlined an interesting framework for the policy response function. One that is based on the economic environment at hand. In some cases proactive and interventionist, and in others slow moving.

Whether you personally like it or not, the PBOCs actions have substantial influence on the global macro environment. Hearing from the top technocrat at the PBOC outline the reaction function and framework is enlightening for thinking about their policy approach.

Of course there are additional considerations - particularly fiscal and regulatory - in understanding the complete policy picture, but found this to be one of the clearest explanations of the MP framework.

Think the biggest takeaway today is that the actions are likely to be more slow moving and muted than many may expect. We are not likely to see a repeat of the post-GFC boom in monetary and fiscal. Further, even in a cyclical downturn, the policy response will be likely muted.

That is an important difference from the type of reaction function we would expect to see in the west. And with it has likely pro-cyclical growth implications over time, which is an important evolution relative to the last few decades where China was a counter cyclical pressure.

  • AI Generated Song ft. Drake & The Weeknd:

It's by "Ghostwriter977" on TikTok and it's blowing up on socials + streaming platforms. UMG, which controls around 1/3 of the global music market, has already asked streaming platforms to ban AI. A modern Napster moment. Will be fascinating to watch this all unfold in real-time.

https://twitter.com/rpnickson/status/1647548141384736770?s=20

🔮Best Links of The Week🔮

  • I’m not Sure Speculation Is Gone - Jim Chanos positioning and thoughts on Tesla, Fin-Tech and Data Centers - Source: themarket.ch

  • An incredible story of how a gambler shocked casinos around the world by doing the impossible: beating roulette. - Source: Bloomberg

  • "Google’s employees were shocked when they learned in March that the South Korean consumer electronics giant Samsung was considering replacing Google with Microsoft’s Bing as the default search engine on its devices. For years, Bing had been a search engine also-ran. But it became a lot more interesting to industry insiders when it recently added new artificial intelligence technology. Google’s reaction to the Samsung threat was “panic"... An estimated $3 billion in annual revenue was at stake with the Samsung contract. An additional $20 billion is tied to a similar Apple contract that will be up for renewal this year. A.I. competitors like the new Bing are quickly becoming the most serious threat to Google’s search business in 25 years, and in response, Google is racing to build an all-new search engine powered by the technology." - Source: NYT

  • "Saudi Arabia has put a second 4% stake of state oil giant Saudi Aramco, valued at nearly $78 billion, under the control of the country’s sovereign-wealth fund, as the kingdom leverages a year of high oil prices toward diversifying its economy." - Source: WSJ

    "The US Securities and Exchange Commission on Friday altered a proposed rule to make more explicit that digital-asset exchanges and decentralized-finance platforms must register with the regulator. The SEC’s plan, which was first proposed in 2022, is meant to close a regulatory gap created by platforms that offer trading in securities but don’t register as exchanges or brokerages. The agency’s revised plan adds language specific to digital assets, many of which the regulator says fall under its purview." - Source: Bloomberg


👉 For specific investment questions or advice contact Joel @ Gold Investment Management.