Day: November 21, 2024

TKL: Current situation

Stocks are rising like the bull market just started Bitcoin is set to cross $100,000 for the first time in history Nvidia, NVDA, just went from red to green and is now worth $3.7 trillion Oil prices are back above $70 like a recession was avoided Gold prices are nearing $2700 for the first time since Election Day Volatility, VIX, is down 30% from the October highs The post-election rally is back. submitted by /u/XGramatik [link] [comments]

Published
Categorized as Reddit Post

Economists see Russian inflation exceeding the central bank’s 2024 estimate

https://preview.redd.it/plmotll70b2e1.png?width=800&format=png&auto=webp&s=40fa453cbb1e4a5fcb7381cfc39e8840b344a44a Leading Russian economists expect inflation in Russia to exceed the central bank’s estimate for this year, increasing the likelihood of another aggressive benchmark interest rate hike next month. Consumer prices rose by 0.37% in the latest week, according to statistical data, pushing the headline figure since the start of the year to 7.4%, close to the central bank’s full-year inflation estimate of 8.0-8.5%. “There is a real threat that inflation will exceed the October forecast of the central bank, prompting the regulator to aggressively raise the key rate again in December, this time to 23%,” said Denis Popov from PSB Bank. Reuters collected the views of 10 economists for this story. The central bank hiked its benchmark rate to 21% in October, stating that a tight monetary policy was needed to combat inflation. The move prompted a barrage of criticism from business leaders who said it was stifling investment and credit. The October upward revision of the full-year inflation estimate was the third publicly known this year by the central bank. Some critics argued that the monetary measures had little or no impact on inflation while dampening growth and leading to stagflation, a phenomenon that combines a high inflation rate with economic stagnation. Dmitry Polevoy from Astra Asset Manager said that if the central bank’s rate-setting meeting took place tomorrow, a hike to 23% would be certain. “Given the current macroeconomic inputs, everything looks extremely unfavorable for the central bank,” Polevoy said, predicting full-year inflation to exceed 9%. Inflation was fueled by rises in prices for potatoes, butter, sunflower oil, dairy products, and imported fruits. Prices for potatoes, a staple food for many Russians, have risen by 74% since last December. The central bank, in its reports, blamed bad weather, which affected crops, poor logistics, a weakening rouble, and increased costs, such as for raw materials and labor, for high inflation. The government, on its part, is trying to increase imports of some key food products, like butter, lower export barriers, limit or ban some exports, and help improve logistics to contain price growth. Despite this concerted effort, inflation keeps rising. “The current growth trajectory is unfolding above the forecast of the Bank of Russia,” said Renaissance Capital analysts. They added that if inflation is above 9% by mid-December, the regulator will respond by hiking the rate to 23%.ond by hiking the rate to 23%. submitted by /u/Pllover12 [link] [comments]

Published
Categorized as Reddit Post

Nicaragua plans to build a new interoceanic canal as an alternative to the Panama Canal. Ha! Epic. Nicaragua? Build? An alternative to the Panama Canal?

At a recent summit focused on strengthening trade between China and Latin America, Nicaragua announced its plans to construct a new Grand Interoceanic Canal. The proposed route aims to provide an alternative to the Panama Canal, which has been facing challenges due to low water levels. The 445-kilometer canal would pass through Lake Nicaragua, connecting the Pacific and Atlantic Oceans. With a width of 290 to 540 meters and a depth of 27 meters, the canal is designed to accommodate large modern vessels. This initiative has the potential to become a significant infrastructure project, enhancing economic ties between China and the Caribbean nations. https://preview.redd.it/4c0qa6dbea2e1.png?width=1280&format=png&auto=webp&s=be50a45aeb4c5be440370d6f76ffa98ccea35754 submitted by /u/XGramatik [link] [comments]

Published
Categorized as Reddit Post

EUR/CHF Price Prediction: Falling lower after break out from Triangle pattern

Bloomberg: EUR/CHF falls lower after breaking out of a Triangle pattern. It will probably continue to decline until it reaches the next downside target, which has been revised up to 0.9145 – 0.9150. This is the 61.8% Fibonacci extrapolation of the height of the Triangle lower, the target generated using technical analysis theory. EUR/CHF Daily Chart The bearish trend prior to the formation of the Triangle (Since May 27) further tips the odds in favor of a downside evolution. Another potential support level and more conservative target is the key August 5 low at 0.9210. submitted by /u/Denchock [link] [comments]

Published
Categorized as Reddit Post

AI will force tech investors to become macro aware: Wang

https://preview.redd.it/nh0jpjms192e1.png?width=800&format=png&auto=webp&s=031e7d5b77614b1477a6aa9843663e4f7d64f31e Tech investors are facing a new form of disruption. This investment cohort has historically paid little attention to macroeconomics, as ever-improving product features and innovative growth strategies have driven investment returns in high tech far more than things like aggregate growth and inflation. But artificial intelligence – and its enormous capital requirements – are ripping up this script. The proposed spending on AI infrastructure by established tech companies in the coming years is eye-watering. In 2025 alone, big tech firms including Amazon , Microsoft , Alphabet , Meta and Apple are projected to spend over $200 billion on capex – almost double what they shelled out in 2021, the year before the generative AI chatbot ChatGPT debuted. The increase in capex is almost entirely due to efforts to build out generative AI capabilities. This highlights the key difference between the AI investment surge and the high-tech boom of the prior two decades: investment today is focused more on hardware than software – and hardware is obviously more capital-intensive. If the economy slows and business prospects for these tech companies deteriorate, their executives will likely think twice about these ambitious – and entirely discretionary – spending plans. This complicates investors’ calculations of the likely returns that can be expected from this nascent technology. RISE OF THE MACHINES In the first two decades of this century, software engineers disrupted one industry after another with business models that were nimble, scalable, and had low fixed costs. A small group of whip-smart entrepreneurs bootstrapped their start-ups, found quick success with early prototypes, and then made a series of strategic pivots. Think Amazon, Netflix, and many social media companies. Fast forward to the age of generative AI, and the storyline has changed dramatically. The new business model typically revolves around very smart, complex and expensive machines that require a tremendous amount of energy to run and often take a long time to build. For example, the Taiwanese semiconductor giant TSMC’s Arizona foundry cost $40 billion and commercial production won’t commence until 2025, four years after construction began. Importantly, investment in AI is typically expected to take years to pay back. In the meantime, many factors could negatively impact the value of AI infrastructure, including concerns related to business confidence and cost inflation, as well as regulatory hurdles and geopolitical tensions that influence where companies can do business. This means tech investors can no longer easily ignore top-down concerns. NEXT GENERATION AI start-ups, unlike their counterparts in software, are also often very capital intensive, making them highly sensitive to market conditions and access to funding. Most of these young companies rely on private capital, which many venture capitalists have been eager to supply in recent years. Investments in AI and machine learning, a related field, accounted for nearly half of all VC funding in the United States in the first half of 2024. And these investments have often been enormous. In October, OpenAI raised $6.6 billion in equity capital from eight investors and another $4 billion in debt financing from nine lenders. The average size of these checks is over half a billion dollars. Checks of this size can be written at a time when the S&P 500 is hitting new record highs, the U.S. economy is growing above trend, and inflation is heading downward. But what happens when the economy inevitably softens and public stock prices dip? Or what if the cost of capital in the U.S. remains elevated? AI start-ups may then find it more challenging to fund their ambitious visions, which could, in turn, stall the pace of growth and innovation in the broad AI ecosystem. This, of course, could reduce demand for the AI infrastructure that big tech companies have invested hundreds of billions of dollars in. CYCLE SHIFT Hardware businesses also exhibit more cyclical characteristics than software. That’s because they can’t rely on continuous adjustments to meet shifts in customer demand, given the substantial inputs and manpower needed to create new products. Consider that $3.5 trillion-plus chipmaker Nvidia has now adopted a “one-year rhythm” for new products, doubling the speed from its previous product release cadence. This means these companies are subject to traditional inventory cycles: when demand exceeds current supply, inventory is drawn down and prices rise, and vice versa. Hardware businesses, unlike nimble software companies, will thus struggle to scale their capacity up or down at short notice. So both the volumes and prices of hardware will typically fluctuate, subject to economic conditions. It’s notable that semiconductor sales have been positively correlated with manufacturing PMIs for decades. This relationship started breaking down in 2022 as AI euphoria really took off. If historical patterns hold, this could mean the boom in global semiconductor sales is overdue for a correction. That’s just one example of why tech investors may need to become as macro-aware as the rest of the investment community. submitted by /u/Pllover12 [link] [comments]

Published
Categorized as Reddit Post