The loonie isn’t following oil prices any longer - nor much else
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The Canadian dollar, also known as the loonie, is no longer following oil prices or its historic drivers. BMO chief economist Doug Porter highlighted the lack of correlation between rising oil prices and the value of the loonie. In the past, a $10 move in the West Texas Intermediate (WTI) crude price would push the loonie higher by three cents, but since mid-June 2021, WTI is up almost 20% while the Canadian dollar is only up 10%. The disconnect is attributed to the US becoming a major oil producer and buying less foreign crude, as well as Canadian producers struggling to get their oil to global markets. The lack of correlation between crude and the loonie is not unprecedented, as relative bond yields and copper prices have also been more connected to the loonie in the past. The value of the loonie is currently influenced by international demand for domestic assets, with foreign money being sold in currency markets to buy Canadian dollars. However, the loonie is likely to remain weaker than traditional indicators imply as long as US equity markets and the US economy continue to lead the developed world. Canadian investors are motivated to sell loonies and buy US dollars and American assets. The lack of correlation between oil prices and the loonie suggests a potential end to the petroloonie phenomenon.
#CanadianDollar #OilPrices #Petroloonie #WtiCrude #UsEconomy #ForeignCrude #BondYields #CopperPrices #UsEquityMarkets
Opinion: With artificial intelligence, the tech world must shed its cavalier attitude
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With the development and fast improvement of artificial intelligence capabilities in the past 15 years, a worrying, long-standing tech approach has gained further traction. The narrative of 'Ask for forgiveness, not for permission' has been a mantra in Silicon Valley, where innovators prioritize speed and innovation over regulatory requirements and ethical considerations. However, the emergence of AI has brought new challenges. Online platforms have been using AI to exploit user preferences and create information bubbles, leading to the spread of misinformation and the polarization of public discourse. The European Union's recently approved EU AI Act aims to address these challenges by prohibiting AI systems that manipulate behavior, impair decision-making, or harm vulnerable populations. The act emphasizes the need for explicit disclosure of AI-generated content. The article argues that protecting individuals, society, and democracy should take precedence over the productivity gains from AI. The author praises the EU for its regulatory approach to AI.
#ArtificialIntelligence #TechIndustry #Regulation #AiAct #Eu
How companies are using generative AI to make self-driving vehicles more safe
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Generative artificial intelligence is being used to improve the safety of self-driving vehicles. Waabi Innovation Inc., an autonomous vehicle company in Toronto, has developed an AI model called Copilot4D that can predict the behavior of surrounding vehicles and pedestrians more accurately than existing approaches. The model uses concepts from generative AI to convert visual data from light detection and ranging sensors into tokens, which are then used to predict future scenarios. Waabi is already using a more advanced version of the model on self-driving trucks in partnership with Uber Freight. However, there are still challenges to overcome, including reliability issues and the ability to accurately forecast human behavior. Other companies are also leveraging generative AI to communicate with industrial robots and improve their capabilities.
https://www.theglobeandmail.com/business/article-ai-self-driving-technology-vehicles/
Nvidia, Microsoft, and Amazon Are Leaders in Artificial Intelligence (AI), but Don't Overlook This Stock
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Nvidia, Microsoft, and Amazon are leaders in AI. Nvidia makes powerful GPUs for AI workloads and is worth $2.2 trillion. Microsoft uses AI in its product portfolio and invested $10 billion in OpenAI. Amazon is working on its own AI chips, large language models, and AI applications. C3.ai is a smaller AI stock worth $3.1 billion and offers AI-as-a-service. It has over 40 ready-made AI applications for various industries. C3.ai's revenue growth is reaccelerating, with $78.4 million in Q3. The company operates under a consumption model and has over $723 million in cash. C3.ai has significant potential in the AI industry.
#Nvidia #Microsoft #Amazon #Ai #C3ai #ArtificialIntelligence #Stocks
"Magnificent Seven" Stock to Buy Hand Over Fist in April, and 1 to Avoid Like the Plague
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The article discusses the performance and outlook of the "Magnificent Seven" stocks, which are the largest and most influential public companies. The Magnificent Seven stocks, listed in order of descending market cap, are Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta Platforms, and Tesla. These stocks have outperformed the benchmark S&P 500 over the past decade. The article highlights Meta Platforms as the stock to buy hand over fist in April due to its popular social media sites, AI ambitions, cash reserves, and relatively low valuation. On the other hand, Nvidia is identified as the stock to avoid due to potential headwinds such as increased competition, regulatory restrictions, and being in an early stage bubble. The article provides reasons and analysis for each stock's outlook and includes information on their competitive advantages and financial performance.
#StockMarket #Investing #MagnificentSeven #MetaPlatforms #Nvidia
The Canadian Free Cash portfolio offers sweet returns
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The Canadian Free Cash portfolio has generated an average annual return of 14.9% from 1999 to February 2024, compared to the S&P/TSX Composite Index's average annual return of 6.7% over the same period. The portfolio selects 10 stocks with the lowest ratios of enterprise value to free cash flow (EV/FCF) from the largest 300 Canadian stocks by market capitalization. There are also 20- and 30-stock variants of the portfolio. The larger portfolios had slightly lower returns but provided a smoother ride with less volatility. During the financial crisis of 2008-09, the portfolios experienced significant declines, with the 10-, 20-, and 30-stock portfolios falling 58%, 56%, and 49%, respectively. Overall, the Canadian Free Cash portfolio has had sugary highs and nauseating crashes, but may perform well over the long term.
#Investment #Portfolio #Returns #Stocks #CanadianMarket
Opinion: Why Russia’s economy is doing so well – even if the good times won’t likely last
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Russia's economy has been resilient despite Western sanctions and the war in Ukraine. The Russian economy suffered a shallower contraction than expected in 2022 and its economic growth rate now rivals that of the U.S. Its defense industry has expanded significantly, producing three million artillery shells a year. Russia has put itself on a war footing, with over 7 percent of its economy committed to defense. It has found ways around sanctions by importing non-prohibited items and maintaining shipping through shell companies. Russia has also found new markets for its exports, such as India and China. However, the discounts it's being forced to absorb mean that its revenues are less than they would otherwise be. Russia's manufacturing and high-tech sectors are struggling, and if the war in Ukraine drags on, Russia's long-term prospects look grim.
Negative Corporate News Undercuts Stocks
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Stock indexes are lower on negative corporate news. United Airlines Holdings is down more than -5% on a report that said the Federal Aviation Administration is considering putting temporary sanctions on the company. Intel and Advanced Micro Devices are down more than -2% after a report said that China is seeking to limit the use of US-made microprocessors and servers in government computers. Apple, Alphabet, and Meta Platforms are down more than -1% as they face the risk of fines after the European Union opened a full-blown investigation into the companies’ compliance with new laws under the Digital Markets Act. Super Micro Computer is up more than +7% after JPMorgan Chase initiated a recommendation of overweight on the stock. Masimo is up more than +10% after it said it will evaluate a proposed separation of its consumer business. Walt Disney is up more than +2% after Barclays upgraded the stock overweight from equal weight. The US Feb Chicago national activity index rose +0.59 to 0.05. The markets are discounting the chances for a -25 bp rate cut at 15% for the next FOMC meeting on April 30-May 1 and 81% for the following meeting on June 11-12. Overseas stock markets today are lower. The Euro Stoxx 50 is down -0.19%. China's Shanghai Composite fell to a 1-week low and closed down -0.71%. Japan's Nikkei Stock Index closed down -1.16%. June 10-year T-notes are down -4 ticks. The 10-year T-note yield is up +4.51 bp at 4.212240%. European government bond yields today are higher. The 10-year German bund yield is up +2.4 bp at 2.348%. The 10-year UK gilt yield is up +2.9 bp at 3.922957%.
#StockMarket #CorporateNews #UnitedAirlinesHoldings #Intel #AdvancedMicroDevices #Apple #Alphabet #MetaPlatforms #SuperMicroComputer #Masimo #WaltDisney #RateCut #FomcMeeting #EuroStoxx50 #ShanghaiComposite #NikkeiStockIndex #Tnotes #GovernmentBondYields
HSBC lifts year-end target for S&P 500 to 5,400 on soft-landing hopes
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HSBC raises year-end target for S&P 500 to 5,400 from 5,000, assuming a soft-landing for the U.S. economy. The revised target is based on better earnings expectations, resilient GDP growth, recent earnings beats, and positive sentiment from corporates. HSBC expects the second half of 2024 to be more volatile due to U.S. elections, elevated earnings expectations, and a shifting narrative on interest rate cuts. Under its bear-case scenario, HSBC expects a year-end target of 4,800 if economic data continues to run hot. HSBC joins BofA Global Research and UBS in forecasting the index to end 2024 at 5,400.
Broadening U.S. market rally gets boost from dovish Fed
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A reassuring economic outlook and dovish signals from the Federal Reserve are encouraging investors to look beyond the massive growth and technology stocks that have fueled the U.S. stock market’s gains over the past year. The financials, industrials, and energy sectors are also outperforming the S&P 500′s 9.7% year-to-date gain. The Fed expressed confidence it would be able to tamp down inflation and cut interest rates this year, even as it raised its forecast for how much the U.S. economy will grow. The Magnificent Seven - Apple, Nvidia, Alphabet, Tesla, Microsoft, Meta Platforms, and Amazon - have been responsible for 40% of the S&P 500′s gain as of Thursday. The broadening rally means that leadership isn’t so concentrated and susceptible to a correction. Some investors believe the group could get a boost from the Fed’s outlook, which kept in place a previous forecast of three 25 basis-point interest rate cuts, despite the central bank’s upgraded growth projections.
Opinion: How a butterfly in Japan creates waves in the Canadian economy
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The Bank of Japan's decision to move away from an easy-money policy may ultimately affect Canadians. Japanese investors have borrowed money at low interest rates and invested it in U.S. and Canadian bonds, driving up their value and suppressing borrowing costs. If the carry-trade from Japan dampens, demand for U.S. bonds may drop, causing their prices to fall and keeping interest rates from coming down. The Federal Reserve's decision to cut rates and expectations for future interest rates settling at a higher level indicate a shift away from the cheap-money era.
#BankOfJapan #CanadianEconomy #InterestRates #Arbitrage #UsBonds #Carrytrade #FederalReserve
1 Magnificent Stock Near 52-Week Lows to Buy Today
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Tesla stock has dropped more than 30% since the beginning of the year and is currently trading at its lowest point in nearly a year. The current economy and shrinking customer base for EVs are contributing factors. However, Tesla's financial strength and technological endeavors, such as humanoid robots, self-driving vehicles, and innovative energy-storage solutions, make it an attractive long-term investment. CEO Elon Musk envisions Tesla becoming the most valuable company overall in the world. The article is published by Motley Fool and includes a list of 10 stocks to consider investing in.
#Tesla #StockMarket #Investment
Recession risks are fading, business economists say, but political tensions pose threat to U.S. economy
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Just a quarter of business economists and analysts expect the United States to fall into recession this year. Respondents to a National Association of Business Economics survey expect year-over-year inflation to exceed 2.5% through 2024. The Fed has stopped raising rates and has signaled that it expects to reduce rates three times this year. Concerns include the chances of a conflict between China and Taiwan, conflict in the Middle East driving oil prices above $90 a barrel, political instability in the United States before or after the Nov. 5 presidential election, and the need for more disciplined budget policies.
Trudeau Liberals making no progress winning back support, Nanos poll says
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Prime Minister Justin Trudeau's attacks against the Conservatives have not shifted public sentiment in his favor, according to a Nanos poll. The poll shows that Trudeau is not faring well among voters' perceptions and his performance as Liberal leader has slipped. The governing Liberals have consistently polled closer to the third-place NDP than the first-place Conservatives. The poll also reveals that only 3% of respondents believe the best way for the Liberal Party to increase its chances of winning the next election would be to keep Trudeau as leader. 39% said the best option would be to replace him as leader, and 25% said the Liberals could improve their prospects if they focused more on economic issues. The poll had 1,114 respondents and a margin of error of 2.9 percentage points.
Inflation is nearly back to 2%. So why isn’t the U.S. Federal Reserve ready to cut rates?
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The U.S. Federal Reserve is not ready to cut rates despite inflation being nearly back to 2%. Most policy-makers are optimistic that inflation pressures will continue to cool, but caution that the strong economy poses a risk of re-accelerating price increases. They want more time to see if inflation continues to subside and believe the economy is solid enough to thrive without rate cuts. However, the longer borrowing rates stay high, the higher the risk of weakening the economy and potentially causing a recession. The Fed is trying to balance the risk of cutting rates too soon and causing inflation to re-accelerate, and keeping rates too high for too long, which could trigger a recession. The Fed plans to cut rates perhaps three times this year, below the five or six that some market analysts foresee.
The all-stock portfolio is having a moment
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The all-stock portfolio is gaining popularity as investors seek higher returns and capital preservation. Traditional advice of splitting assets between stocks and bonds is being challenged. Bonds have been underperforming their role as a stabilizer in portfolios, and their movements have become aligned with stocks over long periods. The idea of an all-equities portfolio has gained traction in the past, but many investors are hesitant due to the fear of stock market crashes. The average investor tends to panic and sell during market declines, resulting in lower returns. However, an all-stock portfolio is not suitable for everyone, as it requires the ability to withstand significant market drawdowns. Bonds and stocks plunged together in 2022, causing investors to question their bond allocations. The article suggests that an all-stock portfolio may generate higher returns but also carries higher risk.
#All-stockPortfolio #Investing #Stocks #Bonds #PortfolioDiversification
Opinion: Yes, immigration has weighed on the economy, but it is not the enemy
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Immigration and infrastructure are two pillars of modern economies. Canadians are experiencing the pain of the mismatch between the two, with a shortage of homes, hospital wings, and workers for overcrowded schools, roads, and transit systems. This has led to declining public support for Canada's immigration levels. However, curtailing population growth would result in an aging, less-skilled workforce, less foreign investment, less diversity, and less influence on the global stage. The solution lies in rethinking our approach to housing and infrastructure, with a sustained push from all levels of government and partners in the homebuilding industry. The federal government should eliminate barriers to construction, work with provinces on skilled trades strategies, and invest in affordable housing development. This approach is essential not only for housing supply but also for infrastructure projects that must accompany population growth. Cutting immigration levels is not a solution and would hinder Canada's ability to compete globally and promise a better future for the next generation.
Chinese shares jump as state investment fund pledges to expand stock holdings to aid sagging markets
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Chinese state investment fund Central Huijin Investment promises to expand its purchases of stock index funds to stabilize sagging markets. The Shanghai Composite index jumps 3.2% and Hong Kong's Hang Seng surges 3.9% in response. The China Securities Regulatory Commission welcomes the announcement and promises to support Central Huijin's efforts. It also plans to facilitate share purchases by institutional investors and encourage companies to increase share repurchases. The moves aim to instill confidence and support property developers amidst a property crisis and slowing economy.
Why Is Snowflake (SNOW) Stock Soaring Today
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Shares of Snowflake (NYSE:SNOW) jumped 9.4% as the Nasdaq and S&P 500 surged after solid earnings from tech giants, including Meta (NASDAQ:META) and Amazon. Yields surged, with the 2-year Treasury yield rising to 4.38% and the 10-year Treasury yield breaking past the 4% mark. The Bureau of Labour reported non-farm payrolls for January 2024, revealing that the US economy added 353,000 jobs. The strong jobs report could cause the Fed to delay cutting rates in 2024. Snowflake's shares are volatile, and today's move is considered meaningful but not fundamentally changing its perception. Snowflake is up 15.7% since the beginning of the year.
#Snowflake #StockMarket #TechGiants #Earnings #Nasdaq #S&p500 #TreasuryYield #BureauOfLabour #UsEconomy #Fed #RateCut