Making sense of this crazy world
A new way of doing things
An apt title for the focus in much of this week’s update as companies and markets are being influenced by innovation and the changing guard. This week a plethora of companies saw their share prices tumble.
It was the wealth and finance sector that were hit badly on Wednesday and this spilled over into sectors like real estate. All spooked by the announcement of a fin tech company called Altruist. They have upgraded their existing AI assistant and now claim they can automate tax planning for £100 per month. Up until now, such tasks have been undertaken by highly skilled technicians using software which has manifested in many billable hours. Apparently, it will now only take a matter of minutes.
Disruption though creates opportunities, and this is reinforced through history. We’ll look at some brief examples.
It’s not just AI causing disruption. The clamour for weight loss drugs in recent times have resulted in sugar prices falling quite dramatically as the demand for sweet foods and snacks has weakened.
This week’s content:
- US economy given a boost by adding 130,000 jobs in January
- Revenge of the old economy
- Technology stocks continue to sell off
- AI efficiency impacting company valuations
- Disruption creates opportunities
- Weight-loss jabs lead to lower sugar prices
- Conclusion
US economy given a boost by adding 130,000 jobs in January
The employment market in the US (referred to as the labor market over there) appears healthier than many had expected, wrong-footing the forecasters. It was almost double what was expected. Trump, on the back of the news, was certainly chuffed and once again called for interest rates to be reduced.
“Bottom line; the January employment report showed continued improvement in the US labor market,” said Mike Reid at RBC. The strong payroll number and lower unemployment rate “both signal that the labor market remains on solid footings despite last week’s softer labor data and recent lay-off announcements,” he said (source: ft.com).
Whilst Trump is calling for interest rate cuts, the stabilising data suggest the Federal Reserve (Fed) may well pause for longer to evaluate. The data surprised the markets.
Continues…
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