Markets' Primary Driver Is Earnings
Jan 16th 2023, 2:40 pm
- According to analysts, WPI inflation data, ongoing quarterly earnings, and foreign fund trading activity will mostly determine this week's equity market drivers.
- For Martin Luther King Day, markets were closed on Monday. According to BofA, earnings are now more significant than inflation because their historical influence on stock prices the following day has outweighed inflation's influence on the S&P 500.
- The reopening of China may provide the world economy a much-needed boost it needs as more people travel for aviation, tourism, and educational purposes.
Microsoft's $10 billion investment in ChatGPT
- Microsoft's proposed $10 billion investment in San Francisco-based research company OpenAI appears to be the key transaction that will usher in a new era of AI.
- Suppose the US software giant is correct about the technology's broad implications. In that case, it might also lead to a realignment in the AI industry as other tech companies compete for a position in the emerging field of generative AI.
- With the release of ChatGPT, an AI system that can respond to questions and generate text in natural-sounding English, OpenAI made headlines worldwide last month.
- The deal is part of a funding round with other investors that would value OpenAI at a whopping $29 billion!
- It isn't clear whether the deal has been finalized, but term sheets sent to prospective investors indicated the plan was to close the deal by the end of 2022, Semafor reported. Microsoft will reportedly get a 75% share of OpenAI's profits until it makes back the money on its investment, after which the company will assume a 49% stake in OpenAI.
Source: Photo by Turag Photography on Unsplash
Didi Resumes User Registrations
- The ride-hailing giant $DIDI announced on Monday that it had obtained authorization to resume new user registration in China, adding to the growing body of evidence suggesting that Beijing's regulatory assault on the world's largest digital companies may be coming to an end.
- Users of Didi were still able to use the app if they already had it on their phones before the reopening of user registration. But the software was under attack from vultures rivals.
- The action is the most recent indication that regulators are letting free the nation's struggling tech giants to boost economic growth.
Source: Yahoo Finance
- According to Goldman Sachs, aluminum prices will climb due to rising demand from Europe and China, with an average price of $3,125 per ton in London and $3,750 per ton predicted for the coming year.
- On Saturday, Bitcoin climbed to a two-month high of $20,853, up 4.6% from the previous closing. Since mid-November, it has increased by 26.4% year-to-date and has surpassed $20,000 for the first time.
- On Monday, investors paired falling inflation on both sides of the Atlantic with warnings from central bank officials that interest rates would likely stay higher for longer than markets anticipated. As a result, European stocks edged up, while US futures fell.