Month: March 2024

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AI will be smarter than entire humanity by 2029 according to Elon Musk

Artificial intelligence

Elon Musk sparked intense debate on the trajectory of artificial intelligence (AI) after he shared a clip from the Joe Rogan Experience podcast via his X account. 

In the video, futurist Raymond Kurzweil explored the future of artificial intelligence (AI), proposing that it might soon outstrip human intellect.

Elon Musk, noted for his candid opinions on AI, echoed Kurzweil’s forecast by stating, ‘AI will likely be more intelligent than any individual human by next year.’ Furthermore, he speculated that by 2029, AI could surpass the combined intelligence of all humanity.

Screen capture of Elon Musk’s post on X

Artificial General Intelligence

Artificial General Intelligence (AGI), capable of outperforming human intelligence, has recently drawn widespread attention from technology leaders worldwide, especially with the advent of sophisticated AI systems such as ChatGPT, Bing AI, and Gemini. Despite its increasing prominence, a unified definition of AGI remains elusive. Typically, AGI is understood to be a phase in AI evolution where the system can undertake any human task, potentially excelling beyond human expertise in certain domains.”

In the realm of technology leadership, a broad range of views exists on the feasibility and consequences of Artificial General Intelligence (AGI). While some leaders speculate about the timeline for AGI’s realization, others doubt its eventual occurrence. Opinions also differ on whether AGI will lead to beneficial progress or present risks to human society. Comprehending the varied stances of tech leaders sheds light on the active debate regarding AGI and its prospective influence on society.

Musk’s choice to disseminate the podcast excerpt has intensified the discourse on AI advancement’s ramifications. His use of his platform to broadcast Kurzweil’s insights has sparked additional discussion and contemplation about artificial intelligence’s revolutionary capabilities.

His tweet has ignited wider conversations concerning the swift advancement of technology and its significant consequences for the future of humanity.

Raymond Kurzweil

Raymond Kurzweil, born 1948, is an American computer scientist, author, inventor, and futurist renowned for his contributions to various fields, including optical character recognition (OCR), text-to-speech synthesis, speech recognition technology, and electronic keyboard instruments.

Through his comprehensive body of work, Kurzweil has researched a variety of subjects including health, artificial intelligence (AI), transhumanism, the technological singularity, and futurism.

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EU passes world’s first major ‘act’ to regulate AI

The European Union (EU) has made history by approving the world’s first comprehensive regulatory framework for artificial intelligence (AI).

Artificial Intelligence Act

Known as the Artificial Intelligence Act, this groundbreaking legislation is expected to serve as a global signpost for other governments grappling with how to regulate this fast-developing technology.

The AI Act takes a risk-based approach, categorizing AI applications based on their risk levels. It prohibits certain high-risk uses, emphasizes transparency, and aims to keep AI development human centric. This landmark regulation should help set a precedent for responsible AI deployment worldwide.

The regulation is expected to become enforceable in May 2024, after passing final checks and receiving endorsement from the European Council.

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Fact or fiction? Oxford University is older than the Aztec Empire

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Fact or Fiction?

Oxford University, founded in the 12th century, stands as a beacon of scholarship and tradition. Its roots trace back to 1096 during William II’s reign. The university is approximately 230 years older than the Aztec Empire.

Teaching would have likely existed in some form within its hallowed halls. Imagine those early scholars, their minds ablaze with curiosity, gathering under the ancient spires.

Now, let’s compare this age to another remarkable entity: the Aztec civilization. The Aztecs flourished around the 14th century. Their vibrant culture, intricate temples, and awe-inspiring pyramids came some 230 years after the university was established.

Imagine the scene: while Oxford’s dons debated philosophy, the Aztecs were constructing Tenochtitlan, their magnificent capital. As Oxford’s colleges took shape, the Aztecs were creating intricate codices and performing sacred rituals.

Oxford University, with its nine centuries of continuous existence, predates the Aztec Empire by several lifetimes: a testament to the enduring quest for knowledge across civilizations.

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UK swings to economic growth in January 2024

UK economy

The economy grew by 0.2%, ONS figures show, boosted by sales in shops and online and from more construction activity.

Hopefully this means the UK is on its way out of recession.

The Office for National Statistics (ONS) said the services sector led the bounce back.

This is an early dataset, but demonstrates how the UK, which entered recession at the end of 2023, is faring.

ONS data suggests UK could be exiting a short-lived ‘technical’ recession

UK swings to economic growth in January 2024
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U.S. consumer prices rose 0.4% in February 2024 and 3.2% from a year ago

U.S. inflation

The U.S. Consumer Price Index, a comprehensive gauge of the cost of goods and services, rose by 0.4% for the month and increased by 3.2% compared to the previous year.

The annual rate was marginally higher than expected. The monthly rate was slightly above the forecast of 0.3%. This may likely direct the Federal Reserve to hold off on an interest rate reduction, at least until the summer of 2024. What will Wall Street make of it?

The core Consumer Price Index increased by 0.4% monthly and recorded an annual rise of 3.8%. Both figures exceeded forecasts by one-tenth of a percentage point.

An increase of 2.3% in energy costs contributed to the rise in the overall inflation figure. Food prices remained mostly unchanged for the month, while housing expenses saw a further increase of 0.4%.

U.S. consumer price index data for February 2024 – Month on month
U.S. consumer price index data for February 2024 – Year on year
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World Wide Web turns 35 today 12th March 2024

World Wide Web

The World Wide Web (WWW), the invention attributed to Tim Berners-Lee while working at CERN, was conceived on 12th March 1989. This makes the World Wide Web 35 years old today.

It is important to recognise that the Web and the Internet are two different entities; the Web is a service that functions via the Internet, a worldwide network of interconnected computer networks. Whereas the Internet is the system.

The first successful communication between a Hypertext Transfer Protocol (HTTP) client and server through the Internet took place in mid-November 1989.

The Web has since evolved significantly, with the release of the first web browser and server, and the development of HTML, CSS, and JavaScript, which have shaped the modern digital experience.

First website

The inaugural website was launched at CERN and became accessible on 20th December 1990. Tim Berners-Lee developed this site to disseminate information about the World Wide Web project. In August 1991, it was made available to the public. Today, it is still possible visit this site, offering an intriguing look into the web’s nascent stages.

The internet

The internet, as we know it today, began to evolve in the mid-20th century. This era, known as the Information Age, Digital Age, or Computer Age, is characterised by a transition from traditional industry to an economy driven by information technology. This shift commenced in the 1940s and 1950s. The invention of the transistor in 1947 and the optical amplifier in 1957 were pivotal developments that propelled the advent of the internet.

The term ‘internet’ commonly denotes the worldwide system of interconnected computer networks that utilize the Internet protocol suite (TCP/IP) to connect devices globally. It is an extensive network comprising private, public, academic, business, and government networks of local to global systems.

ARPANET

Since the ARPANET’s inception, which is the internet’s precursor, the internet has been in existence for over 50 years. The ARPANET was conceived in the late 1960s and became operational in 1969. The internet is approximately 55 years old.

Art illustration depicting users on the World Wide Web – 35 years old today, 12th March 2024

The ARPANET, also known as the Advanced Research Projects Agency Network, represented the first wide-area packet-switched network featuring distributed control and was among the earliest to adopt the TCP/IP protocol suite.

These innovations laid the groundwork for what would become the Internet. Initiated by the U.S. Department of Defence’s Advanced Research Projects Agency (ARPA), the primary goal of ARPANET was to connect computers at Pentagon-funded research institutions via telephone lines, facilitating resource sharing and communication across distant computers.

The project commenced in 1966, with the initial computers being connected in 1969. By 1971, the network was operational and underwent rapid expansion. ARPANET was instrumental in introducing several protocols pivotal in today’s Internet communication, including the Network Control Protocol (NCP) and subsequently, TCP/IP.

Following the advent of the wider Internet, which ARPANET played a crucial role in catalyzing, the network was officially decommissioned in 1990.

Happy Birthday WWW and thank you Tim-Burners-Lee (I think)

Let’s see how far artificial intelligence (AI) becomes embedded in the next generation of the World Wide Web and of further internet development. Will the big tech companies of today still be running the AI projects of tomorrow?

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Is the Bitcoin ascent unstoppable?

Bitcoin up on ETF growth

Bitcoin has been on a remarkable ascent! It soared past the $72,000 mark on Monday 11th March 2024, setting a new all-time record.

This surge is attributed to a growing demand for new spot exchange-traded funds (ETFs), which have been approved for listing in the U.S. by some of the world’s largest financial firms. 

The market for these ETFs is expected to reach $62 billion in the next two or three years. The cryptocurrency keeps surprising everyone with its value, which has grown to an amazing $1.42 trillion and is still rising… again!

Bitcoin moved off its all-time record shortly after achieving it.

Bitcoin chart 11th March 2024 – see CoinMarketCap

Bitcoin chart 11th March 2024 – see CoinMarketCap
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New UK British ISA announced in the March 2024 budget

British ISA

The new UK British ISA 

UK chancellor Jeremy Hunt revealed the British ISA as part of the Spring Budget 2024.

The British ISA aims to boost demand for UK businesses and encourage investment in UK-focused assets.

Key Features

Additional Allowance

The British ISA provides a separate £5,000 annual allowance in addition to the existing £20,000 ISA allowance.

Tax Advantages

Like other ISAs, investors in the British ISA will not pay tax on capital gains or income.

Investment Focus

While it’s not yet clear whether the new ISA will be exclusively for UK shares, it is expected to support UK-focused funds and investment trusts.

Eligibility Uncertainty

The inclusion of UK gilts or UK corporate bonds remains uncertain.

Consultation Period

The consultation period for the British ISA runs until June 6, 2024.

Potential Impact – Reviving UK Stock Market

The British ISA aims to revive interest in the UK stock market, which has faced challenges since the Brexit vote in 2016.

Supporting UK Companies

By providing tax-free savings opportunities, the ISA encourages investment in UK businesses.

Fund Industry Support

Fund management firms, including Premier Miton, lobbied for the British ISA’s creation.

Historical Context

The British ISA draws parallels with its predecessor, the personal equity plan (PEP), which focused on UK shares and funds.

ISAs replaced PEPs in 1999.

Conclusion

In summary, the British ISA introduces an additional allowance for UK-focused investments, supporting savers and UK companies alike. Its impact on the stock market and investor sentiment remains to be seen, but it represents a step toward bolstering the UK’s economic landscape

By ensuring that companies are valued fairly, a stronger stock market will facilitate the capital raising process for companies that seek to grow and attract more listings. This will have a positive impact on the economy and employment and is ultimately in everyone’s interest.

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Japan avoids technical recession

Japan GDP

According to the revised official data, the Japan’s gross domestic product (GDP) grew by 0.4% in the fourth quarter of 2023 compared to the same period in the previous year.

According to this revision, the economy avoided a technical recession, which is usually defined as two successive quarters of negative growth.

On Monday 11th March 2024, Japan’s Cabinet Office released figures that indicated a 0.3% decline in private consumption for the quarter. Private consumption accounts for about 60% of the economy.

Nevertheless, the updated figures fell short of expectations, as some economists had predicted a higher revision in Q4.

Nikkei 225 pulls back from recent highs

Nikkei 225 pulls back from recent highs
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Worry for Apple as iPhone sales in China slide?

Mobile phone

According to recent analysis, Apple’s iPhone sales in China dropped some 24% in the first six weeks of 2024 compared to the same period last year.

Apple faces stiff competition from local rivals in one of its biggest markets.

Meanwhile, Huawei, a Chinese company, saw its sales soar by 64% in its home market during the same period, the analysis demonstrated. But we do not have sales data of other countries for comparison.

The report also said that overall smartphone sales in China shrank by 7% in the same period.

Huawei, which suffered for years from US sanctions, boosted its sales after launching its Mate 60 series of 5G smartphones in August 2023.

Is this a worry for Apple, after all, the iPhone is Apple’s flagship product? Also, Apple recently junked its electric vehicle project and has been left behind in AI. Is the crown ever-so-slightly slipping?

Apple 3 month share price with 50 day moving average

Apple 3 month share price with 50 day moving average
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Humanoid robot startup Figure AI valued at $2.6 billion

Humanoid robot

Figure AI is a robotics company that aims to create the first commercially viable humanoid robot. The plan is for the robot to perform various tasks in different industries.

Brett Adcock, a former software engineer and entrepreneur, founded the company in 2023. He envisioned a way to enhance the quality of life by integrating artificial intelligence (AI) and humanoid engineering.

Figure AI, a startup that has created a humanoid robot for commercial use, has secured $675 million in funding. Some of the investors include Jeff Bezos, Nvidia, Microsoft and OpenAI.

The company plans to use the funds to speed up the development of its general-purpose robot, named Figure 01. This robot resembles and behaves like a human.

Figure AI was founded in 2022 and has been working on creating a versatile robot that can perform multiple tasks.

Flagship product

Figure AI’s flagship product is a human-like robot called Figure 01. This robot can mimic human appearance and motion. It uses sophisticated AI techniques to acquire new skills, adjust to changing situations, and communicate with its surroundings.

Figure 01 can perform tasks that require dexterity, mobility, and intelligence, such as manufacturing, logistics, warehousing, and retail. The humanoid robot is designed to work safely and efficiently alongside humans, complementing their skills and capabilities.

Figure 01

Investment

Some of the world’s leading technology companies, such as Microsoft, OpenAI, Nvidia, and Amazon, have invested in Figure AI.

The company also collaborates with BMW, a major global automaker, to use Figure 01 in its production facilities. Figure AI aims to transform the automotive industry by introducing more flexibility, productivity, and innovation to the manufacturing process.

Vision

The vision is for the company to build a future where humans and humanoids can coexist and cooperate to accomplish more than ever before.

Figure AI is to create humanoids that can help humans address the urgent challenges of the 21st century. These tasks will likely include climate change, population growth and social inequality. The company’s goal is to develop a versatile humanoid that can be marketed and accessible for everyone.

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Powell says the Fed is not ready to start cutting interest rates yet

U.S. interest rates

In his Capitol Hill testimony on 6th March 2024, Federal Reserve Chairman Jerome Powell reiterated that was not yet time to begin cutting interest rates.

To fight inflation, which reached a rate of 9% in the summer of 2022, the central bank has significantly increased interest rates in recent times. However, prices are still stubborn, especially for things like housing and groceries.

Due to the robust economic performance in early 2024, the expected reduction in interest rates has been postponed. Instead of taking place this month, the rate cuts are now more probable in May or June 2024.

Powell reportedly said: ‘The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.’

He reiterated the pledge to lower inflation to the 2% target and keep long-term inflation expectations stable.

UPDATE

On Thursday 7th March 2024 Powell also said: the Fed is ‘not far’ from the point of cutting interest rates

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“An investment in knowledge pays the best interest.” – Benjamin Franklin

A Scholar

Benjamin Franklin, 1706 – 1790

Benjamin Franklin, a ‘polymath‘ and one of the Founding Fathers of the United States, made significant contributions in various fields.

Here are some highlights of his life and achievements

Inventor and Scientist

Franklin is renowned for his experiments with electricity. His famous kite experiment demonstrated the connection between lightning and electricity.

He invented practical devices such as the lightning rod, bifocals, and the Franklin stove.

Statesman and Diplomat

Franklin played a crucial role in drafting the United States Constitution and the Declaration of Independence.

He served as the United States Ambassador to France during the American Revolutionary War, securing French support for the American cause.

Writer and Publisher

Franklin was a prolific writer and publisher. His “Poor Richard’s Almanack” contained witty proverbs and practical advice.

He founded the first public lending library in America and established the University of Pennsylvania.

Philanthropist and Civic Leader

Franklin was deeply committed to civic causes. He helped establish fire departments, hospitals, and educational institutions.

His philanthropic efforts extended to the creation of the Philadelphia Contributionship, one of the earliest insurance companies.

Legacy:

Benjamin Franklin’s legacy endures through his contributions to science, literature, and the foundation of the United States.

His wit, and wisdom continue to inspire generations.

What is a polymath?

A polymath is an individual whose knowledge spans over a substantial number of subjects. They are known to draw on complex bodies of knowledge to solve specific problems. The term comes from the Greek word ‘polymathēs,’ which means ‘having learned much.’

Polymaths excel in various fields, including science, technology, engineering, mathematics, and the arts. They embody the idea that humans are limitless in their capacity for development and should embrace all knowledge to develop their abilities fully.

Thank you Wikipedia.

Note: image is of a fictitious scholar and not of Benjamin Franklin
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U.S. national debt is piling up

U.S. debt pile

The U.S. national debt has been growing more quickly in recent months, increasing about $1 trillion nearly every 100 days.

U.S. debt permanently crossed over $34 trillion on 4th January 2024 according to data from the U.S. Department of the Treasury.

It reached $33 trillion on 15th September 2023, and $32 trillion on 15th June 2023. Before that, the $1 trillion move higher from $31 trillion took about eight months.

The U.S. national debt is the total amount of money that the federal government owes to its creditors. That can include, individuals, other countries and corporation. It is composed of two main components: federal debt held by the public and federal governmental debt.

The national debt has grown over time due to various factors, such as recessions, defense spending, and tax cuts. The debt-to-GDP ratio gives insight into whether the US has the ability to cover all of its debt. It also shows how it affects economic growth. 

U.S. national debt pile is growing

U.S. Debt
U.S. national debt is piling up

The national debt increased by 13.3% under President Biden. Up from $27.77 trillion as of 1st March 2020 to $31.46 trillion as of 1st March 2023. The debt also grew by $1.5 trillion, or 5.6%, between the end of 2020 and the end of 2021.

The gross domestic product (GDP) measures the annual economic output of the entire country. The national debt exceeds this amount, which is very high.

As of the end of February 2024, the U.S. debt is almost $34.4 billion. This is the money that the federal government has to borrow to pay for its operating expenses.

The World Bank found that if the debt-to-GDP ratio exceeded 77% for an extended period, it slowed economic growth.

U.S. national debt

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Bitcoin passes $69000 then pulls back

Bitcoin

The relentless volatile march of Bitcoin continues… again!

Bitcoin jumped gain, edging ever closer to its all-time high after the rally took a breather over the weekend. Last week, Bitcoin surged $10,000 in the space of a couple of days.

It looks very much like the ETFs are kicking in during normal weekly trading moving Bitcoin other than just at weekends. The market also has an eye on the halving event due in April.

Bitcoin 7 day chart showing it above $69000 on 5th March 2024 – CoinMarketCap

Bitcoin 7 day chart showing it above $69000 on 5th March 2024 – from CoinMarketCap.

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Gold futures rise above $2125 to highest level ever

Gold at record high

Gold futures for April settled at $2126 per ounce, the highest-level going back to the *contract’s creation in 1974.

Analysts suggest that, adjusting for inflation, gold set an all-time high of approximately $3200 in 1980 and bodes well for big gold increases to come in the future.

Why is gold going up?

The outlook for interest rates. The Federal Reserve is expected to cut rates in 2024 to further stimulate the economy as the inflation fight comes to an end. Lower interest rates make gold more attractive as an alternative asset that does not pay any income.

The geopolitical and economic uncertainty. The U.S.-China trade and political tensions, the conflicts in the Middle East, the Russia/Ukraine war, other conflicts around the world and the upcoming U.S. presidential election are all sources of risk and volatility for the global markets. Investors seek gold as a safe haven asset that can preserve wealth and hedge against inflation.

The supply and demand dynamics. The demand for gold has been rising from central banks, investors, and consumers, especially in China and India, the world’s largest gold consumers. The supply of gold, on the other hand, has been constrained by the pandemic-related disruptions, environmental regulations, and declining ore grades.

Gold price as at 08:20 GMT 5th March 2024 in U.S. dollars per ounce

Gold price per ounce as at 08:20 GMT 5th March 2024 in U.S. dollars

The above are some of the reasons why the price of gold is climbing to touch an all-time high. However, the future performance of gold may depend on how the economic and political situation evolves, as well as the market sentiment and expectations.

Gold is a complex and dynamic asset that can be influenced by many factors, both fundamental and psychological.

*Gold contract creation 1974

The gold futures contract for April 1974 was the first gold contract to be traded on the U.S. futures market, and it settled at $126.30 per ounce on its first day of trading. The contract was created after the U.S. ended the gold standard in 1971 and allowed the price of gold to fluctuate according to markets.

Remember: always do your research!

RESEARCH! REASEARCH! RESEARCH!

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A brief explanation of Bitcoin halving

Bitcoin

Bitcoin halving is an event that occurs approximately every four years, when the reward for mining Bitcoin transactions is reduced by 50%. This means that the number of new Bitcoins created and entering circulation is also cut in half. 

Bitcoin mining

Bitcoin mining is the process of using computers to validate transactions and add them to the blockchain, a distributed ledger that records all Bitcoin activity. Miners compete to solve complex mathematical problems and the first one to find a valid solution gets the block reward, which is currently 6.25 Bitcoins per block. 

Bitcoin halving

The Bitcoin halving is coded into the Bitcoin protocol by its perceived creator, Satoshi Nakamoto, as a way to control the total supply of Bitcoin and make it scarcer and more valuable.

There can only be 21 million Bitcoins in existence, and the halving ensures that the last Bitcoin will be mined around the year 2140. 

The Bitcoin halving has implications for the Bitcoin network and the price of Bitcoin. On one hand, the halving reduces the inflation rate of Bitcoin and increases its scarcity, which could lead to higher demand and upward pressure on the price.

A brief explanation of Bitcoin halving

On the other hand, the halving also reduces the profitability of mining and could cause some miners to exit the network, which could affect the security and stability of the network. 

Important

The Bitcoin halving is an important event for the Bitcoin community and the cryptocurrency industry, as it reflects the unique and innovative nature of Bitcoin as a digital and decentralized form of money.

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Is it acceptable to use the North Sea as a dumping ground for carbon waste?

Carbon waste

Norway has a long history of carbon management. For nearly 30 years, it has captured and reinjected carbon from gas production into seabed formations on the Norwegian continental shelf.

Norway’s government wants to show the world it is possible to safely inject and store carbon waste under the seabed, saying the North Sea could soon become a ‘central storage camp’ for polluting industries across Europe.

Norway’s carbon management projects (Sleipner and Snøhvit) have been in operation since 1996 and 2008, respectively, and are often held up as proof of the technology’s viability. These facilities separate carbon from their respective produced gas, then compress and pipe the carbon and reinject it underground.

Carbon capture storage – nothing new

Offshore carbon capture and storage (CCS) refers to a range of technologies that seek to capture carbon from high-emitting activities, transport it to a storage site and ‘lock’ it away indefinitely under the seabed.

Norway is currently a leading pioneer in carbon capture and storage (CCS), a technology that aims to reduce greenhouse gas emissions by trapping carbon dioxide from industrial sources and injecting it into underground reservoirs. Norway has been operating CCS projects in the North Sea since 1996, using depleted oil and gas fields as storage sites.

Norway’s ambitious plan to expand CCS is called Project Longship, which involves building a full-scale CCS value system that can serve as a model for other countries and industries. The project consists of two parts: a capture facility in Brevik that will process emissions from a cement factory, and a transport and storage system that will ship the captured CO2 by ship to an offshore terminal and inject it into a permanent storage location in the North Sea. 

Project Longship is expected to be completed by 2024, with a reported capacity to store 1.5 million tonnes of CO2 per year. The project has a total cost of 1.7 billion euros, of which the Norwegian government will cover 80%. The project is also supported by the European Union, which sees CCS as a key climate solution. 

Norway’s current Energy minister (2004) reportedly said that the project will prove to the world that CCS is possible and necessary to meet the Paris Agreement goals. He also said that the North Sea could become a ‘central storage camp’ for CO2 from other countries and industries, as it has the potential to store up to 1.25 billion tonnes of CO2. That’s a real concern to me.

Long-term safety concerns

However, not everyone is convinced by Norway’s CCS vision. Some critics have raised concerns about the long-term safety and environmental impacts of storing CO2 under the seabed, as well as the ethical and moral implications of using the North Sea as a dumping site for carbon waste.

Norway’s CCS project is a controversial and complex undertaking that will test the feasibility and acceptability of this technology.

Whether it will succeed or fail remains to be seen, but it will certainly have a significant impact on the future of climate action.

Is it safe or wise to pump waste into and hide it under the sea? Humankind doesn’t have a very good track record when it comes to clearing up after itself, does it? Go look at the rubbish in space!

Is it safe or wise to pump waste into and hide it under the sea? Humankind doesn’t have a very good track record when it comes to clearing up after itself, does it? Go look at the rubbish in space!

Only time will tell?

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Inflation in the euro-zone eased to 2.6% in February 2024

Euro zone inflation

Euro zone inflation eased to 2.6% in February figures showed on Friday 1st March 2024, but both the headline and core figures were higher than expected.

Core inflation

Core inflation, removing the volatile elements of energy, food, alcohol and tobacco was 3.1% above the 2.9% rate expected.

The February figures will be a headache for EU policymakers, as core inflation is still holding above 3% even as the headline rate moves toward the ECB’s 2% target.

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Is AI driving a market bubble or is there so much more yet to come?

Tech bubble

As tech giant Nvidia soars on hype around artificial intelligence (AI), and as global stock indexes claim record highs, debate has grown about whether the stock market has entered a ‘bubble.’

An AI bubble of boom

We are reminded of the dotcom bubble where investment was rife in anything tech – so, are we now potentially facing a new tech bubble – an AI bubble of boom?

That’s generally seen as a period in which asset prices inflate rapidly, potentially beyond their core value; and risk crashing just as fast.

Other AI stocks are chasing the dream too adding to the hype. However, some are in the slow lane playing catch-up and this may suggest there is much, much more to come.

The likes of AMD, Intel, Amazon, OpenAI, Arm and a myriad of other tech companies big and small have much more AI to bring to the tech table.

Let’s use Nvidia as an example of a potential stock bubble

If we look at the valuation of Nvidia, justifiably it is actually very high, too high even – that’s the first sign of a potential problem, valuation. The second issue is investor positioning – whenever you have a market bubble, investors are very clustered or very concentrated, either in one market or in one sector as a whole.

Nvidia one year chart as of 29th February 2024. Price 791

Nvidia one year chart as of 29th February 2024. Price 791

Sectors

It doesn’t matter which markets you look at – the U.S., Europe or Asia markets – the problem is the same. We now have an historic valuation between the tech sector, the AI sub-sector of the tech sector, and the rest of the market.

Investors are very clustered in this tech sector. However, some leading commentators say of tech that this is not hype – this is real. It most probably is, for now, and with much more to come from the smaller tech and AI companies that have yet to show their true AI value. But all bubbles burst in the end.

Pop!

There is certainly plenty of room for AI to grow – it’s in its infancy – but the question is: ‘how and when will the bubble burst? Because, in my humble opinion, it most certainly will.

We may not see a dramatic market crash like 1999-2000 or 2007/2008, but an investor rotation out of areas of concentration into the broader market will likely happen.

If you look at the bubbles of 1999-2000, and then in 2007/2008, one key characteristic was investor leverage. And we had, whether it was retail investors or institutional investors, a very high level of leverage, and that was either through borrowings or it was through derivatives.

The AI tech boom has legs but there will almost inevitably be a rotation from AI to other sectors – that will then adjust the overvalued AI sector. And it could pullback quite hard.

Be ready!

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India’s economy smashes expectations with 8.4% growth

India GDP smashes expectations

India is ‘easily’ the fastest growing economy in the world according to the IMF, as the country’s Q3 GDP growth soared past analysts’ estimates.

The world’s fastest growing major economy expanded 8.4% in the last three months of 2023.

8.4% GDP growth in Q3

At 8.4%, India’s economy expanded at its fastest pace in six quarters, data showed late Thursday, on strong private consumption and upbeat manufacturing and construction activity. Reuters estimates had pegged growth in the October to December period at 6.6%.

Prime Minister Narendra Modi posted on the social media platform X, that it shows ‘the strength of Indian economy and its potential.’

India economy due to jump ahead of Japan and Germany

India is forecast to leap ahead of Japan and Germany as the world’s third biggest economy in the next few years.

The better-than-expected growth was led by a strong performance by the country’s manufacturers, with the sector expanding by 11.6% in the period.

Private consumption, which makes up almost two-thirds of the country’s gross domestic product (GDP), also rose by 3.5%.

India is on a tear.