BOGOFF! Buy one get one free offer!
What further depths of despair will the Post Office will sink to – fining people for unknowingly using fake stamps.
“Even the stamps are made in China!”
Chinese EV makers continue their BIG push into European markets
This expansion occurs as the European Union investigates subsidies provided to Chinese electric vehicle manufacturers, a situation that may lead to the imposition of tariffs.
In May 2024 Nio opened a new EV showroom in Amsterdam, while Xpeng introduced its G9 and G6 sports utility vehicles in France.
Over the years, China’s electric vehicle industry has flourished due to the government’s incentives and support, raising concerns among politicians in Europe and the U.S.
Public marketing campaigns are unfolding against the backdrop of a European Commission investigation into subsidies provided to Chinese electric vehicle manufacturers. The outcome of this inquiry may result in EU tariffs being imposed on Chinese EV imports.
The United States has preempted such measures, with the Biden administration enacting a 100% tariff on Chinese EV imports.
Meanwhile, Chinese EV producers are intensifying their international expansion efforts, aiming to compete with Elon Musk’s Tesla on a global scale and secure an early advantage over traditional car manufacturers.
IMF recommends UK interest rates should be cut to 3.5% by end of 2025
The International Monetary Fund (IMF) advises that the Bank of England should contemplate reducing its interest rates to 3.5% by the end of 2025.
This suggestion is made as the UK’s economy steadily recovers from the recession caused by the pandemic, while policymakers are dealing with inflationary challenges.
The ‘thinking’ behind the recommendation
Economic Recovery and Inflation Outlook
The IMF’s recommendation is grounded in its assessment of the UK’s economic trajectory.
Growth Forecast
The International Monetary Fund has upgraded its growth forecast for the UK in 2024, signaling a positive outlook. It anticipates growth of 0.7% this year and 1.5% in 2025.
Inflation
The IMF anticipates that UK inflation will decline to near the Bank of England’s target of 2% and stabilise at this rate in early 2025, indicating that inflationary pressures are within manageable limits.
Soft Landing
The UK economy is said to be approaching a ‘soft landing‘ following the mild recession of the previous year. Policymakers are focused on finding a balance between fostering growth and managing inflation.
Monetary Policy Considerations
The Bank of England’s Monetary Policy Committee (MPC) has been closely monitoring economic indicators and inflation trends. Here’s why the IMF’s recommendation matters:
Interest Rate Peaks
The Monetary Policy Committee has indicated that interest rates might have reached their peak. The current restrictive monetary policy is having an impact on the actual economy and the dynamics of inflation.
Market Expectations
Analysts anticipate the first interest rate cut by September 2024 at the latest. Market expectations align with this projection, with the base interest rate likely to be lowered to 4% by the end of 2025.
Balancing Act
Policymakers face the delicate task of supporting economic recovery while preventing runaway inflation. The IMF’s suggestion aims to strike this balance.
Implications for Borrowers and Savers
Mortgage Holders
Variable Rate Mortgages
If you have a variable rate mortgage, a rate cut could reduce your monthly payments. However, keep an eye on your lender’s response to any rate changes.
Fixed Rate Mortgages
Fixed-rate borrowers won’t immediately benefit from rate cuts, but they should still monitor the situation. If rates continue to fall, refinancing might become attractive.
Savers
Savings Accounts
Lower interest rates typically lead to diminished returns on savings accounts. It may be wise to diversify your investments to seek potentially higher yields in other areas.
Fixed-Term Deposit
Current fixed-term deposits will remain unaffected; however, new deposits might generate lower yields. It is advisable to carefully assess your alternatives.
Conclusion
The IMF’s recommendation highlights the intricate balance between fostering economic recovery and managing inflation. As the Bank of England considers its next steps, it is crucial for borrowers and savers to remain informed and adjust their financial strategies as needed.
For homeowners, investors, and savers alike, grasping the potential consequences of rate cuts is key to making well-informed choices in an ever-changing economic environment.
Disclaimer: The information provided here is based on current projections and should not be considered financial advice. It is not given as financial advice – it is for discussion and analysis only!
Consult a professional advisor for personalised recommendations.
Remember – always do your careful research first!
RESEARCH! RESEARCH! RESEARCH!
Update
The Bank of England has given its strongest hint yet that interest rates could be cut this summer. This comment was observed in a recent speech given by the deputy governor of the Bank of England.
“Every vote counts – even the green one!”
Make-shift polling station
Bakery fakery!
Wall Street is in love with Nvidia as results beat estimates – but can the stock maintain these meteoric gains?
Nvidia’s shares surpassed $1,000 for the first time during extended trading on Wednesday 22nd May 2024, following the chip manufacturers report of fiscal first-quarter (Q1) earnings that exceeded analysts’ expectations.
Investors have been using Nvidia’s performance as a barometer for the AI industry’s growth, which has captivated the market over the past year. The robust results indicate that the demand for Nvidia’s AI chips continues to be strong. However, there may be an argument that it is time to take some profits from these massive gains. Can it continue its meteoric climb?
It was also announced that revenues from the upcoming next-generation AI chip, ‘Blackwell‘, are expected later in the year.
In extended trading, the stock increased by around 7%. Additionally, Nvidia announced a 10-for-1 stock split. Given the post-market activity, the shares are on track to reach a new high on Thursday 23rd May 2024.
Nvidia one year share price
Earnings Per Share: $6.12 vs. $5.98 – (Nvidia financial reports)
Revenue: $26.04 billion vs. $24.65 billion – (Nvidia financial reports)
Nvidia anticipates sales of $28 billion for the current quarter, surpassing Wall Street’s expectations of $26.61 billion sales, as reported – (Nvidia financial reports)
The company declared a net income of $14.88 billion, or $5.98 per share, a significant increase from $2.04 billion, or 82 cents per share, in the same period last year. (Nvidia financial reports)
Over the past year, Nvidia’s sales have surged, driven by purchases from tech giants like Google, Microsoft, Meta, Amazon, and OpenAI, which have invested billions in Nvidia’s GPUs. These high-end, expensive chips are essential for the development and deployment of artificial intelligence (AI) applications.
Nvidia’s primary business segment, data center sales, encompasses AI chips and other necessary components for operating large AI servers.
The revenue for Nvidia’s data centre sector soared over 400% compared to the previous year. This growth was attributed to the delivery of the company’s ‘Hopper’ graphics processors (GPU’s), including the H100 GPU.
It was also reported that Meta’s Lama 3, their newest large language model utilizing 24,000 H100 GPUs, as a notable income stream this quarter.
UK retail sales flop 2.3% in April, missing estimates
Wet weather was to blame for the U.K. retail sales volumes drop of 2.3% in April 2024.
Shoppers were deterred from the high street, the Office for National Statistics (ONS) said Friday 24th May 2024.
Economists expected a smaller retail sales fall of 0.4%.
Sales volumes declined across multiple sectors, with clothing retailers, sports equipment, games and toys stores, and furniture outlets experiencing a downturn as adverse weather conditions led to a decrease in customer visits, according to the ONS.
March’s figure was revised from flat to a 0.2% decline.
Sales increased by 0.7% over the three months leading up to April, compared to the preceding three months, despite a sluggish December and holiday season. However, there was a 0.8% decline when compared with the same period last year.
Will the Bank of England (BoE) drop interest rates in June now that inflation is down to 2.3% – close to the target of 2%?
SEC approves rule change to allow creation of ether ETFs
On Thursday 23rd May 2024, the SEC sanctioned a rule amendment that clears the path for ETFs investing in ether, one of the largest cryptocurrencies globally.
This move occurs less than half a year after the Securities and Exchange Commission greenlit Bitcoin ETFs. These funds have been a significant triumph for the industry, with net inflows reportedly exceeding $12 billion.
May was widely anticipated as a likely verdict time for the ether funds, aligning with the SEC’s deadline to determine the fate of the VanEck Ethereum ETF.
Numerous firms that back Bitcoin ETFs – such as Bitwise, BlackRock and Galaxy Digital – have been reported to have initiated the process to launch their own ether ETF.
Ether’s value saw a modest increase following a 20% climb earlier in the week in anticipation of the SEC’s ruling. However, some investors might be holding back, considering the SEC’s approval of the rule change doesn’t ensure the launch of all proposed funds.
Ethereum one year chart (CoinMarketCap)
“Do you ever get that sinking feeling?”
Vote for me. UK election date set: 4th July 2024
Amazon plans to give Alexa an AI make-over
Amazon is reportedly set to launch an enhanced version of its long-standing voice assistant this year, which will be available for a monthly fee, according to sources.
This new service reportedly will not be part of the Amazon Prime subscription. The news emerges as OpenAI introduced a chatbot capable of engaging in two-way conversations, contrasting with Alexa’s current common uses such as setting kitchen timers and providing weather updates.
Now what’s wrong with that – that’s how I use my Alexa!
UK Prime Minister announces snap general election for 4th July 2024
On 22nd May 2024, UK Prime Minister Rishi Sunak announced a snap general election for 4th July 2024 This decision caught many by surprise, as the election was called more than around six months earlier than legally required.
Election Date: 4th July 2024 – let the fireworks begin
The Conservative Party, led by Rishi Sunak, is facing significant challenges in opinion polls, trailing behind the opposition Labour Party.
The economy, immigration, health services, and cost of living have been identified as key issues for voters.
Labour, led by Sir Keir Starmer, is considered the clear frontrunner, with a substantial lead in recent polls.
Since 2010, the Conservatives have seen five prime ministers: David Cameron, Theresa May, Boris Johnson, Liz Truss, and now Rishi Sunak.
Sir Keir described the past 14 years as “Tory chaos” and emphasised that it’s time for change.
So, the UK is gearing up for an early election, and the outcome will be closely watched both domestically and internationally
“What kind of wizardry is this – I just want a simple white loaf please!”
Science making a white bread taste like brown…
Hybrid ‘Hybread’ Bakery, where a white loaf tastes like wholegrain.
Why not just waste even more time on nonsense science… what’s the point?
“Intelligence is the ability to adapt to change.” – Stephen Hawking
Stephen Hawking – 1942 – 2018
This quote emphasizes the importance of flexibility and learning in the face of new situations, a key aspect of what it means to be intelligent.
It’s a reminder that intelligence isn’t just about knowledge or cognitive ability, but also about how we use that knowledge to navigate and grow within our ever-changing world
Big tech companies pledge AI safety commitments
Leading technology companies, such as Microsoft, Amazon, and OpenAI, have united under a significant international accord for artificial intelligence (AI) safety measures, established at the Seoul AI Safety Summit on Tuesday 21st May 2024.
Following the agreement, firms from various nations, including the UK, China, Canada, the U.S., France, South Korea, and the United Arab Emirates, have pledged to voluntarily commit to the secure development of their cutting-edge AI models.
Framework
AI model developers who have not already done so agreed to issue safety frameworks that detail how they will address the challenges posed by their advanced models, including the prevention of technology misuse by malicious entities.
These frameworks will feature ‘red lines’ that tech companies will establish to delineate the types of risks associated with advanced AI systems that are deemed ‘unacceptable.’ These risks encompass, but are not limited to, automated cyberattacks and the potential for bioweapons.
Kill switch
In the event of such dire scenarios, companies have declared their intention to introduce a ‘kill switch’ that would halt the development of their AI models should they be unable to ensure the mitigation of these risks.
“It is unprecedented for so many prominent AI firms from diverse regions of the world to concur on identical commitments regarding AI safety,” Rishi Sunak, the UK Prime Minister reportedly said on Tuesday 21st May 2024.
He further noted that these commitments would guarantee that the world’s foremost AI companies will maintain transparency and accountability concerning their safe AI development strategies.
This agreement builds upon a prior set of pledges made in November 2023 by entities engaged in the creation of generative AI software.
The involved companies have consented to seek feedback on these standards from ‘trusted actors,’ which include their respective national governments when suitable, prior to their publication in anticipation of the forthcoming AI summit – the AI Action Summit scheduled to take place in France in early 2025.
EU gives greenlight to the world’s first significant law on artificial intelligence
On Tuesday 21st May 2024, European Union member states reached a consensus on the world’s first significant law to regulate artificial intelligence, a move echoed by institutions globally to implement controls on the technology.
The EU Council announced it has granted final approval for the AI Act, a pioneering regulation designed to establish the first extensive framework for artificial intelligence.
The EU Commission is authorized to impose fines on companies violating the AI Act, up to 35 million euros ($38 million) or 7% of their annual worldwide turnover, whichever is greater.
UK headline inflation rate falls to lowest in three years but comes in hotter than expected
The April inflation came in higher than anticipated, falling to 2.3%, as reported by the Office for National Statistics on Wednesday 22nd May 2024.
Traders have now reduced their expectations of a June interest rate cut by the Bank of England (BoE). Markets reacted negatively in early trading.
The headline inflation rate decreased from 3.2% in March, marking the first instance since July 2021 that inflation has fallen below 3%, nearing the Bank of England’s target of 2%.
Contrary to the predictions of economists surveyed by Reuters, who expected a more significant drop to 2.1%, services inflation – a critical indicator monitored by the BOE due to its significance in the UK economy and as a gauge of domestically generated price increases – only fell marginally to 5.9% from 6%, missing the anticipated 5.5% from the BOE.
Core inflation, which excludes energy, food, alcohol, and tobacco, decreased to 3.9% in April from 4.2% in March.
The substantial decline in the headline rate was largely anticipated due to the year-on-year decrease in energy prices. However, investors shifted their attention to core and services inflation following indications from BOE policymakers of a potential interest rate cut later in the summer, contingent on new data.
After the data release, the market-makers probability of a June rate cut plummeted to 15% from 50% and the chance of an August cut also fell to 40% from 70%.
Lingering concerns over underlying inflationary pressures mean a June rate cut is unlikely. However, these figures may convince more rate setters to vote to ease policy, providing a signal that a summer rate cut is still a possibility.
Nasdaq Composite Index hits a new all-time high on Monday 20th May 2024
The Nasdaq is a stock market index predominantly comprising technology and internet-related companies. Investors and traders closely monitor its performance as it serves as a barometer for the technological sector’s robustness and the general market mood.
Nasdaq all-time high
The Nasdaq Composite surpassed its previous highest value, marking a significant milestone in its history.
Contributing factors
Tech success
The surge was propelled by robust performances from leading tech companies like Apple, Amazon, Microsoft, and Alphabet (Google).
Economic optimism
Positive economic data, the lingering promise of interest rate cuts, and optimism about future growth contributed to investor confidence.
Market sentiment
The all-time high indicates a positive sentiment in the stock market; however, it is crucial to keep an eye on current trends and potential corrections.
Note
Keep in mind that stock markets are subject to volatility, with prices capable of swift fluctuations. It’s crucial for investors to proceed with caution and take into account their individual risk tolerance before making any investment choices.
If in doubt – do nowt!
RESEARCH! RESEARCH! RESEARCH!
Microsoft announces new PCs with AI chips
Microsoft is promoting new computers equipped with advanced chips, engineered to operate the new artificial intelligence (AI) capabilities embedded in the Windows operating system.
On Monday 20th May 2024, Microsoft unveiled a Surface Laptop and a Surface Pro tablet, both featuring a Qualcomm chip capable of executing AI tasks both online and offline.
The new Microsoft Copilot+ PCs feature chips designed by ARM and are powered by Qualcomm’s Snapdragon X Elite and X Plus chips, which are also based on ARM architecture. These Snapdragon-powered PCs represent the initial series of devices under the Copilot+ PC brand, introducing over 20 models from various manufacturers, such as Acer.
The partnership between Microsoft, Qualcomm, and PC manufacturers is focused on providing superior processing and quick response times, with these ARM-based chips being integral to the new AI designs.
In addition, manufacturers like Lenovo, Dell, HP, Asus, Acer, and Samsung are launching AI-ready PCs featuring Qualcomm’s Snapdragon X Elite and X Plus processors. These processors offer extended battery life and compatibility with Microsoft’s Copilot AI chatbot.
Microsoft’s powerful AI vision – some tech information
Windows PCs designed for AI, known as Copilot+ PCs, are fitted with new, powerful chips capable of an astounding 40+ TOPS, ensuring all-day battery life and access to cutting-edge AI models.
Promoted as the fastest and most intelligent Windows PCs ever created, they boast features like Recall, Cocreator, and Live Captions, which can translate audio from over 40 languages into English.
These devices include sleek, lightweight, and elegantly designed models from Microsoft Surface and OEM partners such as Acer, ASUS, Dell, HP, Lenovo, and Samsung. Pre-orders are now open, with availability starting on June 18 and prices reportedly beginning at $999. This represents a major shift in the Windows platform, placing AI at the forefront of PC architecture.
This progress is a big part of Microsoft’s wider initiative to drive AI innovation onto devices, enhancing the AI capabilities that are already present in the cloud through Copilot.
This is a massive development in the deployment of AI to the masses.
OpenAI and Reddit strike a deal
Reddit’s shares have surged following the announcement of a partnership with AI start-up OpenAI
Through this deal, OpenAI, the creator of the ChatGPT chatbot, will gain access to Reddit’s content and introduce AI-driven features to the platform.
OpenAI has also secured agreements with various publishers, reports suggest, including the Associated Press and the Financial Times, in the past few months.
This move underscores Reddit’s strategy to diversify its revenue streams beyond advertising.
Additionally, the partnership emerges amidst increasing legal actions by copyright holders against AI companies for utilizing their content.
Sony, the world’s largest music publisher, reportedly issued letters to Google, Microsoft, and OpenAI inquiring about the potential use of its songs in AI system development.
Furthermore, Google formed a partnership in February, granting the tech behemoth access to Reddit’s data for AI model training.
U.S. debt and deficits are generating concerns about potential threats to the economy and financial markets
The federal debt reportedly reached $34.5 trillion, marking an increase of approximately $11 trillion since March 2020.
This surge has sparked discussions among government and financial leaders, with a notable Wall Street firm questioning whether the associated costs could threaten the stock market’s upward trend. The Congressional Budget Office projects that the public debt will soon surpass any previously recorded levels relative to GDP.
Federal Reserve Chair Jerome Powell has emphasized the urgency for elected officials to address this issue promptly.
“Can you explain democracy to me again please?”
“Can you explain democracy to me again please?”
China is a major and critical world supplier and full decoupling may be impossible
Chinese firms are becoming increasingly optimistic about a rise in trade exports, as there is little evidence of global companies completely decoupling from China, Allianz Trade reports.
More than one in ten Chinese exporters, ranking as the second-largest exporter of goods to the U.S. following Mexico, anticipate an increase in exports.
While a total decoupling of supply chains from China may not occur, the option for diversification remains open.
The global economy is so interlinked it is virtually impossible to decouple China
China’s Baidu has exceeded revenue expectations, thanks to a resurgence in advertising and the expansion of its cloud services
Baidu, one of China’s leading search engine firms, surpassed analysts’ revenue forecasts for the Q1 on Thursday 16th May 2024.
This was predominately due to a recovery in advertising revenue and a surge in demand for its AI-driven cloud products.
The company announced a revenue of 31.51 billion yuan ($4.37 billion) for the quarter ending 31st March 2024, exceeding the average analyst projection of 31.21 billion yuan, according to a latest dataset.
Shares of Baidu listed in the U.S. saw an approximate 3% increase in premarket trading.
The tech giant has been actively enhancing its sales efforts focused on AI-centric products and services.
“All the batteries currently on Earth store just 10 minutes of the world’s electricity needs.”
Does the recent precious metal rally in gold, silver and platinum have further to go? Some analysts think so
Precious metal prices received a significant uplift on Thursday 16th May 2024 following the release of better-than-expected U.S. inflation data, which increased the likelihood of rate cuts by the Federal Reserve, again.
Gold prices reached their highest point in over three weeks on Thursday too, while silver achieved its highest price in over three years, and platinum ascended to a peak close to its one-year high.
According to strategists in a recent comment, gold prices might soon approach the $2,400 again, silver could rise to as much as $30 per ounce, and platinum has the potential to hit $1,130 per ounce.
Silver price per ounce 16th May 2024 – chart snapshot
Gold price per ounce 17th May 2024 – chart snapshot
“Do as I say, not as I do!”
“Do as I say, not as I do!”
Dow, S&P 500 and Nasdaq Composite all hit new highs as favourable data allows potential rate cuts to get ever closer – September 2024 looks likely
All three major indices closed at records on 15th May 2024
The Dow climbed 0.88%, while the S&P 500 gained 1.17%, ending the session above 5,300 for the first time. The tech-related Nasdaq Composite closed higher by 1.40%.
Dow closed at a new high of: 39908
S&P 500 closed at a new high of: 5308
Nasdaq Composite closed at a new high of: 39908
