January 30st, 2023
- Feb 18, 2023
- 6 min read
Welcome If you’re a Chiefs or Eagles fan, I bet you're having a great start to your day; if not, hopefully a quick read through some topical events will cheer you up! I hope everyone has had a smooth January and still keeping up with your New Year's resolutions. Stay strong!
What you need to know:
US Debt ceiling limit – The United States has hit their legal limit of national debt that the government can spend. Less than 10 years ago, the Debt Ceiling was set at close to half of what it is now. This will affect government spending in coming years and both the Treasury Department & Congress will have to come to an agreement on how to change this. Before you ask, Janet Yellen said the Fed will not produce a $1 trillion Treasury platinum coin to keep the US from a debt default.
US National Debt: Thirty-one trillion five hundred twenty billion five hundred fifty million one hundred seventeen thousand seven hundred forty dollars ($31,520,550,117,740). Say that 5 times fast.
Bank of Canada 0.25 bump: Last week, the Bank of Canada raised its interest rate by a quarter point to 4.5%. Along with this rate increase, the
BoC's governor stated "We've raised rates rapidly and now is the time to pause and reflect...". Hmmm, does this potentially mean we've hit the peak of interest rate hikes?
Home sales are falling faster than Patrick Mahomes on the last play yesterday: Home sales in the US have now fallen for 11 consecutive months. As of December 2022, home sales in the US were down for the 11th month in a row, the lowest pace it's been since November of 2010 (post financial crisis).
People are more careful about their spending and with rising interest rates, consumers are looking at many things but purchasing a home isn’t one of them. Additionally, US commercial real estate are withdrawing their offers at a staggering pace. The collective withdrawal request worth 20 billion$ is considered the largest since the great recession.
Pfizer executive probably won't call back: A (allegedly) Pfizer executive probably had his worst date last week when a journalist had an undercover camera posing as his date who exposed him speaking about Pfizer exploring intentionally mutating COVID strains for profits and how COVID will be a "cash cow" going forward for the company. The video has gone viral with over 41 million views on Twitter alone.
Bad time to work in Tech: Layoffs within the technology sector remains high. 58,000 tech workers have been laid-off this month, while 140,000 employees were let go in 2022. We will get into it a bit more further below.
Citadel Hedge Fund: Citadel's massive ($54B AUM) hedge fund run by billionaire Ken Griffen has recently become the most successful hedge fund of all time in terms of returns, as they made a whopping 38.1% return ($16B) this past year for their investors. Yes, we're talking volatile 2022 here. Wow!
Inflation slows down but consumer spending keeps tumbling: Goldman Sachs CFO said that the bank was seeing early signs of consumer credit deterioration. Treasury Secretary Janet Yellen also stated she believed the US economy was at risk of a recession. The PCE inflation rose 4.4% from a year ago, representing the smallest annual increase since October of 2021. Considering consumer spending is responsible for two-thirds of all US economic activity, this is not the comeback we were expecting. Rates increase are expected to slow down as the government tries to assess the impact of its aggressive rate hikes in recent months.
Recession remains up in the air: As many Economists dispute recession likelihood, major banks including Chase, Bank of America, and Citigroup predicts "mild recession" coming. What can we learn from the past? Take a look bellow:
Technology: I think it's time to talk about the elephant in the room, ChatGPT
CHATGPT, Arguably the most important technological advancement of our generation, here’s what you need to know:
What is ChatGPT? well why don’t we ask it to describe itself. Here’s what it has to say on the Question: What is Chat GPT:
ChatGPT is a language model developed by OpenAI, trained on a large corpus of text data to generate human-like responses to various prompts in natural language. It can answer questions, generate text, summarize information, and perform other language-related tasks.
Here is some of Chat GPT’s recent achievements:
Netflix: 3.5 years
Twitter: 2 years
Facebook: 10 months
Spotify: 5 months
Instagram: 2.5 months
ChatGPT: 5 days
Some of Chat GPT 3.0’s latest Achievements
United States Medical Licensing Exam
Wharton MBA exam
Multistate Bar Exam
Currently, Chat GPT is running on the 3.0 version of its software. While serving millions of users and taking arguably some of the hardest exams in the world, engineers at OpenAi have been working hard on releasing their new upcoming Chat GPT 4.0 version. How does it compare? Currently, Chat GPT 3.0 is running with 175 Billion Parameters making it the largest AI model to date. Although GPT-3 is able to achieve many things, it is still struggling with understanding sarcasm and idiomatic expressions affecting its capacity to write essays, create music and write articles. When GPT-4 is released, the way we use the internet will change forever. Considering GPT-3 has been able to achieve all these exceptional things with “only 175 Billion parameters” and being limited to data up till 2021, the picture below will help you imagine what 175 Trillion parameters will allow GPT 4.0 to do.
Google joins the tech industry layoff trend that we’ve been seeing these past months.
Google recently announced it was going to layoff 12 000 employees, representing 6% of its full time workforce. Some of these employees found themselves crawling for questions as some had been recently promoted or had been part of the company for many years.
Here’s a few more companies that also plans on letting go some of their workforce
Amazon plans to lay off 20 000 employees
HP plans to lay off up to 6000 employees
Meta plans to lay off up to 11 000 employees
Twitter plans to lay off up to 4000 employees
Microsoft plans to lay off up to 10 000 employees
Goldman Sachs plans to lay off up to 3000 employees
Salesforce plans to lay off up to 8000 employees
Take a look at the 1Y unemployment rate of Canada vs. the US:
Energy!
BP says the Russia-Ukraine war will slow down the global economy by 2035 and shift the world towards renewable energy. According to BP's 2023 Energy Outlook, the war will decrease global economic activity by 3% due to higher food and energy prices and reduced trade. BP lowered its oil and gas demand forecast for 2035 by 5% and 6%, respectively. The decrease is mainly in Europe and Asia, which depend heavily on energy imports. Global energy demand is expected to peak between late 2020s and 2035. Oil demand will start to decrease rapidly after 2030 and will still play a big role in the energy system, reaching 70 to 80 million barrels per day by 2035. The war has increased focus on energy security, which may lead to an acceleration in the energy transition and a shift towards domestically produced energy, including renewables.
99% of the coal-fired power plants in the US are more expensive to run than to replace with a new solar or wind operation, according to a new analysis by Energy Innovation. This is due to the decreasing cost of renewable energy, which has been fueled by the Inflation Reduction Act passed last year, which included $370 billion in tax credits and support for clean energy. The analysis found that the marginal cost for coal plants is $36 per megawatt hour, while new solar is about $24 per megawatt hour, a third cheaper. Only one coal plant, Dry Fork in Wyoming, is cost-competitive with renewables. Coal is a major source of carbon emissions and was once a backbone of the American grid but has seen a 55% decrease in output and a decrease in jobs in the coal mining sector in the past decade. The buildout of wind and solar will need to be accelerated so that the US can eventually wean itself off of coal.
Grab n' Go
BlackRock 2023 Global Outlook - A new investment playbook
Struggling to keep it together in the New Year? Bishops has got you covered. BU students can contact Empower Me Mental Health and Wellness Support 24 hours a day, 7 days a week, 365 days a year at 1-833-628-5589.
Comments