The U.S. labour market accumulated strong gains as the pace of hiring was greater than expected, dampening the chance of an early rate cut.
December’s jobs report showed that 216,000 jobs were added for the month while the unemployment rate remained steady at 3.7%. Estimates were in the region of 170,000 as analysts were looking for their ‘goldilocks figure.
Job boost from U.S. government
The hiring boost came from a gain of 52,000 in government jobs and another 38,000 in health care-related occupations.
Average hourly earnings rose 0.4% on the month and were up 4.1% from the same period 2023, both higher than the respective estimates for 0.3% and 3.9%.
U.S. unemployment chart Jan 2021 – December 2023
S&P500 and Nasdaq
The S&P500 and Nasdaq recovered some early 2024 losses as the fresh data encouraged the debate and chance of a rate cut again. Later however, the strong U.S. jobs growth dampened the likelihood of rate a cut anytime soon. Yields were on the rise again.
Strong streak
Government hiring drove the gains, which extended one of the strongest streaks of job creation on record. The job growth has confounded forecasters expecting job losses as higher borrowing costs slowed the economy.
The metaverse is a hypothetical concept that has not yet been fully realized, but many experts and companies are working on developing it. Mark Zuckerberg is one of these ‘believers’.
Future challenge
The metaverse is quite likely to happen in the future, as technology advances and demand for immersive and interactive online experiences grows. Ai will help develop the metaverse at a greater speed.
However, there are also many challenges and uncertainties that could affect the development and adoption of the metaverse, such as interoperability, privacy, regulation, social issues, and user safety. Therefore, it is hard to predict when and how the metaverse will become a mainstream platform. Some estimates suggest that it could take another 10 to 15 years for the metaverse to reach its full potential.
What does Meta have to say about the Metaverse?
Meta and Mark Zuckerberg think that the metaverse is the next evolution of social technology and the successor to the mobile internet. They believe that the metaverse will enable people to feel present and connected with others in immersive and interactive digital spaces, where they can socialize, learn, work, play, and create. They also think that the metaverse will be a collaborative and open platform, where different companies and creators can build and interoperate with each other.
Product investment
Meta is investing heavily in developing the technologies and tools that will power the metaverse, such as virtual and augmented reality devices, software, and content.
Mark Zuckerberg has shared his vision and enthusiasm for the metaverse in various interviews and events, such as the Protocol interview, Connect 2021 keynote and the Lex Fridman podcast.
He has also demonstrated some of the impressive features and capabilities of the metaverse, such as photorealistic avatars, mixed reality experiences, and NFTs. He has said that he wants Meta to be a social technology company that helps bring the metaverse to life together with the community.
Time will tell if the Metaverse really is the future. So far it has failed to fully establish the following as Facebook enjoyed in its early days.
Mark Zuckerberg and Meta will not give up and will likely make his version of the Metaverse a success, one way or another.
‘Jimi, don’t forget to take the headset off if you go out again!’
The bumper festive period led to the High Street giant to raise its profit forecast by 5% to £960m for 2024. NEXT has about 460 outlets in the UK and Ireland.
The company also expects sales to grow by 3% in 2024/25 but warned that attacks on shipping in the Red Sea could cause delays and disruptions to its stock supply.
NEXT’s full price sales were up 5.7% in the nine weeks to 30th December, £38 million ahead of its previous guidance of 2%.
The company’s share price closed at: 8146.00 on 29th December 2023, as of 4th January 2024 the share price was: 8550.
Three months share price data for NEXT.
Is this an indication of better news for the UK high street in general?
Federal Reserve officials in December concluded that interest rate cuts are likely in 2024, though they appeared to provide little in the way of when that might occur, according to minutes from the meeting released Wednesday 3rd January 2024.
FOMC meeting minutes
The rate-setting Federal Open Market Committee (FOMC) agreed to keep its rate steady in a range between 5.25% and 5.5%. Members indicated they expect 0.75% cut by the end of 2024.
Uncertainty
However, the meeting summary noted a high level of uncertainty over how, or even if, that will happen. Markets have reacted negatively to this news.
The minutes noted an unusually elevated degree of uncertainty about the policy path. Several members said it might be necessary to keep the funds rate at an elevated level if inflation doesn’t cooperate, and others noted the potential for additional increases.
But, despite this cautionary tone from Fed officials, markets expect the central bank to cut rates in 2024.
Dot plot
The dot plot of individual members’ indications released following the meeting showed that members expect cuts over the coming three years. This will bring borrow back to the 2% desired target.
The minutes indicated that clear progress had been made against inflation, with a six-month measure of personal consumption expenditures even indicating that the inflation rate has edged below the Fed’s 2% target.
FOMC Dot plot projections through 2026
However, the document also noted that progress has been uneven across sectors, with energy and core goods moving lower but core services still moving higher.
The Dot plot – what is it?
The dot plot, in relation to the FED or FOMC, is a chart that shows the projections of the Federal Reserve Board members and Federal Reserve Bank presidents for the federal funds rate, which is the interest rate that U.S. banks charge each other for overnight loans.
The dot plot is updated four times a year, after each FOMC meeting, and reflects the individual views of the policymakers on the appropriate level of the federal funds rate for the current year, the next few years, and the longer run.
The graph (dot plot) can help markets and the general public understand the Fed’s monetary policy stance and expectations for the future path of interest rates.
However, the dot plot is not a policy commitment or a forecast, but rather a snapshot of the opinions of the FOMC participants at a given point in time. The dot plot can change over time as new information and economic conditions develop.
Mark Zuckerberg, the CEO and cofounder of Meta Platforms Inc., sold some $190 million worth of Meta shares in November 2023, and another $238 million in December 2023.
These were his first stock sales since 2021, when he sold $2.9 billion worth of shares.
Meta Platforms is one of the leading social media and technology companies in the world with its flagship platform Facebook.
Its stock price has surged by 166% in 2023, making it one of the best-performing stocks among the so-called ‘Magnificent Seven’ group of tech giants. Meta has also rebranded itself as a metaverse company, aiming to create a virtual reality platform that connects people across its various apps and devices.
Philanthropic – The Giving Pledge
Zuckerberg and his wife, Priscilla Chan, have pledged to donate 99% of their Meta shares to charitable causes during their lifetimes, as part of the Giving Pledge initiative started by Warren Buffett and Bill Gates.
They have also established the Chan Zuckerberg Initiative, a philanthropic organization that focuses on education, health, science, and justice.
Mortgage lenders have started 2024 by cutting interest rates.
The UK’s biggest lender, the Halifax, has cut some interest rates by nearly a full 1%, with other lenders expected to follow suit. HSBC has announced it will also make cuts in January.
Halifax is reducing its rates, with interest on a two-year fixed deal being cut by up to 0.83%. HSBC is due to reduce rates on its two-year fixed rate for remortgages (for someone with at least 40% equity in their home) falling below 4.5% for the first time since early June last year.
Mortgage rate chart October 2021 – January 2024
The Bank of England’s (BoE) benchmark interest rate has been held three times at 5.25%, analysts now expect the next move to be down.
Wasted wind power will add £40 to the average UK household’s electricity bill in 2023, according to a think tank.
That figure could increase to £150 in 2026, Carbon Tracker has estimated.
When it is very windy, the grid cannot handle the extra power generated. So, wind farms are paid to switch off and gas-powered stations are paid to fire up. The cost is passed on to consumers.
The government said major reforms will halve the time it takes to build energy networks to cope with extra wind power. Energy regulator Ofgem announced new rules in November 2023, which it said would speed up grid connections.
Bottleneck
Most of the UK’s offshore wind farms are in England. Dogger Bank, off the coast of Yorkshire is the largest in the world. Meanwhile, around half of onshore wind farms are in Scotland but most electricity is used in south-east England.
Carbon Tracker said the main problem in getting electricity to where it is needed is a bottleneck in transmission.
Wind curtailment
The practice of switching off wind farms and ramping up power stations is known as wind curtailment. This cost is passed on to consumers, it said. Carbon Tracker researches the impact of climate change on financial markets. It said since the start of 2023, wind curtailment payments cost £590m, adding £40 to the average consumer bill.
It warned the costs were set to increase adding £180 per year to bills by 2030. Wind farms are being built faster than the power cabling needed to carry the electricity.
Cable issue
‘The problem is, there are not enough cables. The logical solution would be to build more grid infrastructure,‘ said an analyst at Carbon Tracker. ‘It’s not even that expensive,’ he added, compared with mounting wind curtailment costs.
Industry group RenewableUK reportedly said that grid constraints, ‘reflect a chronic lack of investment in the grid.’
‘We need to move from a grid which is wasteful, to one that’s fit for purpose as fast as possible.’
However, historically it has taken between 10 and 15 years for new transmission cables to be approved.
Maybe more battery storage plants around the UK would help reduce the bottlenecks? As renewable power continues to expand, this would enable the extra power to be stored to use later.
This would be better than firing up antiquated fossil fuel power plants.
Are you selling online and making a little extra income?
Well, if you are, as from 1st January 2024 you will now fall foul of UK tax rules if you do not declare the income generated from these sales.
Companies like Etsy, eBay, Vinted, Airbnb etc. are obliged to collect and share details of such transactions with the tax authorities. That will allow HMRC to zero in on anyone who should be declaring the extra income but isn’t.
While HMRC was already able to request information from UK-based online operators, from the start of this year there are new rules that the UK has signed up to in cooperation with the OECD – Organisation for Economic Cooperation and Development, as part of a global effort to clamp down on tax evasion.
New rules
The new rules require digital platforms to report the income sellers are getting through their site on a regular basis.
It will apply to sales of goods such as second-hand clothes and items that have been handcrafted, but also services such as: food delivery, taxi hire, freelance work and accommodation lets or even renting out your driveway for parking.
Rule summary
Online sellers already paying tax do not need to alter what they are already doing.
Individuals have a £1,000 tax-free allowance for money made through property.
There is also a £1,000 allowance for trading income – for example, if you offer tutoring or gardening, or if you are selling new or second-hand items online.
People earning below those thresholds may not have to fill in a tax return, but should keep records in case they are asked for them.
The information will be shared between countries that have signed up to the OECD tax rules.
The UK government said the new rules would help it ‘bear down on tax evasion’, as sellers on digital platforms would now be treated more like traditional businesses.
Bitcoin surged Monday and Tuesday 1st and 2nd January 2024, climbing above $45,000 to hit its highest level in nearly 21 months, as the rally in cryptocurrencies continues. Other cryptocurrencies have joined in the rally, with Ether and Solana both rising.
Traders are anticipating the potential approval of a bitcoin exchange-traded fund (ETF) in the U.S., as well as the upcoming Bitcoin ‘halving’ due to happen in May 2024.
U.S. news organisation the New York Times is suing ChatGPT-owner OpenAI over claims its copyright was infringed to train the system.
The New York Times has filed a lawsuit against OpenAI and Microsoft for using its news stories to train chatbots without permission or compensation. The lawsuit claims that the defendants have infringed on the paper’s intellectual property rights and seek to ‘free-ride’ on its investment in journalism.
The lawsuit also alleges that the chatbots pose a threat to the jobs of journalists and the quality of news reporting. The New York Times is seeking damages and an injunction to stop the defendants from using its content. The lawsuit, which also names Microsoft as a defendant, says the firms should be held responsible for ‘billions of dollars’ in damages.
Permission
ChatGPT and other large language models (LLMs) ‘learn’ by analysing a massive amount of data often sourced online. The lawsuit claims ‘millions’ of articles published by the New York Times were used without its permission to make ChatGPT smarter, and claims the tool is now competing with the newspaper as a trustworthy information source.
It alleges that when asked about current events, ChatGPT will sometimes generate excerpts ‘verbatim’ from New York Times articles, which cannot be accessed without paying for a subscription.
Subscription
According to the lawsuit, this means readers can get New York Times content without paying for it – meaning it is losing out on subscription revenue as well as advertising clicks from people visiting the website.
It also gave the example of the Bing search engine – which has some features powered by ChatGPT – producing results taken from a New York Times-owned website, without linking to the article or including referral links it uses to generate income.
For true cryptocurrency bulls, the most lucrative investments in 2023 were in the stock market.
While Bitcoin rallied over 150% for the year, shares of Coinbase, Marathon Digital, MicroStrategy and the Grayscale Bitcoin Trust, which are all tied closely to the digital currency, did substantially better, rising more than 300% in value. Bitcoin miner Marathon Digital soared some 688%.
Outperform
Not only have these stocks outperformed primary cryptocurrency, but they’ve been among the biggest gainers across the whole U.S. stock market. In the universe of publicly traded U.S. businesses with a market value of at least $5 billion, the four Bitcoin-tied stocks were among the eight best performers, according to analysts.
Boom or bust?
The crypto boom represents a major recovery from 2022, when coin prices plummeted, taking related equities down with them. A year highlighted by hedge fund collapses, crypto lender failures and crippling losses at miners was punctuated in November 2022, when crypto exchange FTX spiralled into bankruptcy, leading to the arrest of founder Sam Bankman-Fried on fraud charges.
A jury in New York convicted Bankman-Fried on seven criminal counts
Bankman-Fried conviction
In 2023, a New York jury convicted Bankman-Fried on seven criminal counts, setting the 31-year-old former billionaire up for a possible long-stretch behind bars. Weeks later, Changpeng Zhao (CZ), founder of crypto exchange Binance, pleaded guilty and stepped down as the company’s CEO as part of a $4.3 billion settlement with the Department of Justice. He faces a possible prison sentence of 18 months or longer.
By the time of Bankman-Fried’s conviction and Zhao’s plea deal, the damage to the broader crypto market had mostly been realised, and investors were looking to the future. One of the biggest drivers for bitcoin this year was an easing of the Federal Reserve’s interest rate hikes, which created a more attractive case for riskier assets, but only marginally.
Bitcoin halving due May 2024 & ETF’s
Prices were also bolstered by the upcoming Bitcoin halving, which takes place every four years and is scheduled for May 2024. In the halving process, the reward for mining is cut in half, capping the supply of bitcoin.
Additional buying was sparked by the potential for a flurry of bitcoin exchange-traded funds popping up in the new year.
Marathon
Among companies closely tied to Bitcoin, the best-performing stock this year was Marathon, a mining firm that just eclipsed that market cap level last week thanks to a 125% surge in December as of Tuesday’s close. On Wednesday, the shares surged another 15%.
Last year at this time, Marathon was hanging on by a thread. The company was in the midst of a quarter that ended with a loss of almost $400 million on sales of just $28.4 million because of tumbling bitcoin prices
Mining
Bitcoin mining is an expensive operation because of the high energy costs required to operate the supercomputers. A drop in bitcoin prices means a sharp reduction in the money producers make selling the coins they mine, even as their energy bills get little relief.
Outside of the mining universe, the best-performing crypto stock in the U.S. this year is Coinbase, which has soared some 386% into 2023 year end.
Coinbase
As the only major publicly traded crypto exchange in the U.S., Coinbase has long been a popular way to buy and trade cryptocurrencies in its home market. But with the struggles at Binance, the largest exchange in the world, Coinbase picked up useful market share during non-U.S. trading hours, according to a report from research firm Kaiko in late November 2023.
Binance is still open for business(Art illustration of a fictitious crypto trading room)
Shortly after Zhao’s plea deal, Coinbase CEO Brian Armstrong reportedly said that the news amounted to ‘a vindication of the long-term strategy that we’ve taken to focus on compliance, make sure we were building a trusted company.’
Coinbase’s revenue and stock price are still way below where they were during the heyday of crypto trading in 2021, when retail investors were jumping into the market to buy all sorts of digital currencies, including gimmicks like Dogecoin.
But the business has stabilized following drastic cost-cutting measures starting last year and extending into early 2023.
Tesla recalled more than two million cars in December 2023 after the U.S. regulator found its driver assistance system, Autopilot, was partly defective, it was reported.
It follows a two-year investigation into crashes which occurred when the tech was in use. The recall applies to almost every Tesla sold in the U.S. since the Autopilot feature was launched in 2015.
The update happens automatically and does not require a visit to a dealership or garage but is still referred to by the U.S. regulator as a recall.
The UK Driver and Vehicle Standards Agency reportedly said it was not aware of any safety issues involving Teslas in the UK, noting that cars sold in the UK are not equipped with all of the same features as cars in the U.S.
Chinese company, Build Your Dreams (BYD), has moved another step closer to over-taking Tesla as the world’s biggest-selling manufacturer of electric vehicles.
The firm said on Monday it had sold a record 526,000 battery-only vehicles in the last three months of 2023, aided by more than a 70% surge in sales in December 2023.
Tesla is scheduled to release its latest quarterly vehicle production and delivery figures before Wall Street opens on Tuesday.
For the year, BYD said it had sold more than 3 million new energy vehicles (NEVs), which includes battery-only vehicles and hybrids. Almost 1.6 million of its total sales were battery-only vehicles, the firm said.
Industry analysts have forecast that Tesla sold around 483,000 electric vehicles in the last three months of 2023 and 1.82 million for the year as a whole.
House prices have ended the year 1.8% lower in the UK, according to Nationwide Building Society
The Nationwide forecasts no growth or a further fall in 2024.
The lender said the average house price across the UK was £257,443 in December 2023. This was flat compared to November 2023 but down compared to December 2022.
The lender reportedly said that consumer confidence ‘remains weak’, despite some mortgage rates falling in anticipation for Bank of England (BoE) to cut borrowing costs in the months ahead.
The number of housing transactions has been running at around 10% below pre-Covid levels, Nationwide reported. The fall was more pronounced for those buying a house using a mortgage – down 20% compared to before the pandemic.
However, the volume of cash deals continues to run above the levels recorded before Covid hit.
This was the famous UK advertising slogan of a once famous and proud Japanese business that later fell from grace. It became a 1980’s advertising hit for Toshiba in the UK.
There was a time when more than one of your TV’s, computers, laptop’s, Hi-Fi’s, speaker systems or other essential electronic goods would have been made by Toshiba.
Once an untouchable powerful conglomerate for Japan’s dominance in electronics – known as Japan Inc – the company for forced to delist, ending a 74-year history with Tokyo’s stock exchange.
So why did one of Japan’s most famous industrial names have such a spectacular fall from grace?
It all started in 2015 when accounting malpractices came to light, with many of them involving top management. For seven years, Toshiba had overstated its profits.
In 2020, Toshiba found further accounting irregularities
There were also allegations related to corporate governance. An investigation launched in 2021 found that Toshiba had colluded with Japan’s trade ministry – which saw Toshiba as a strategic asset – to suppress the interests of foreign investors.
At the time, analysts said this made foreign investors uncertain about investing in Japanese stocks, making it not just a Toshiba problem, but an issue for Japan’s entire stock market.
In late 2016, Toshiba said it would take charge of several billion dollars related to the construction of a nuclear power plant that U.S. unit Westinghouse Electric had bought a year earlier. Just months later, Westinghouse filed for bankruptcy leaving Toshiba facing a collapse of its nuclear business and more than $6bn in liabilities.
Sell-off
Toshiba sold off businesses including medical systems, mobile phones, and white goods try to thwart these difficulties. But it was later forced to place its flag ship chip unit, Toshiba Memory, up for sale – a deal that was delayed for a number of months over a dispute with one of its partners.
At a time when companies were investing heavily in the future of technology and innovation, Toshiba was having to sell off a prized asset to raise cash – a resentful place to be.
Cash injection
Toshiba managed to secure a $5.4bn cash injection at the end of 2017 from overseas investors, helping it avoid a forced delisting. But that meant shareholders had more of a say in the about the company.
That lead to protracted battles that paralysed the maker of batteries, chips and nuclear and defence equipment. After a great deal of debate over whether the company should split up into smaller companies, Toshiba set up a committee to explore whether it should be taken private.
In June 2022, Toshiba received eight buyout offers
Earlier in 2023, the company announced it would be taken over by a group of Japanese investors led by state-backed Japan Investment Corp (JIC) for $14bn. It’s not clear yet what the new owners plan for Toshiba – maybe AI products will come to the rescue?
Japan Investment Corp
JIP does reportedly have a positive track record in making businesses from big manufacturers including Sony’s laptop division and Olympus’s camera unit. After acquiring Sony’s Vaio laptop business in 2014, it helped the company achieve record sales last year.
But Toshiba is a much bigger company, it employs around 106,000 people and some of its operations are seen as critical to national security.
It has now de-listed and hopefully will find a way to re-gain back to its former glory.
The original extremely memorable and successful Toshiba advertising campaign from the 1980’s
The original extremely memorable and successful Toshiba advertising campaign from the 1980’s
The UK Supreme Court has upheld earlier decisions to reject a bid to allow an artificial intelligence to be named as an inventor in a patent application.
Dr Stephen Thaler (an ‘inventor’), had sought to have his AI, called Dabus, recognised as the inventor of a food container and a flashing light beacon. But in 2019, the Intellectual Property Office (IPO) rejected this, saying only a person could be named as an inventor. The decision was then backed by both the High Court and Court of Appeal. The IPO argued, and courts have supported the view, that only ‘persons’ can have patent rights, not Artificial Intelligence.
Now five Supreme Court judges have dismissed a bid to reverse those decisions, concluding that ‘an inventor must be a person’, and that an AI cannot be named as an inventor to secure patent rights.
The judgement does not deal with the issue of whether Dabus did in fact invent the food container and light.
This issue will likely be debated for some time yet – maybe an AI court of the future could decide?
And this is what it came up with… (exactly as it was written)
Christmas is a time of joy
A time to celebrate and enjoy
The birth of our Savior and King
Who came to earth to bring
Peace and love to all mankind
And hope for those who seek and find
Christmas is a time of grace
A time to forgive and embrace
The ones who hurt us or make us sad
And remember the good times we had
With family and friends who are dear
And wish them all a happy new year
Christmas is a time of light
A time to shine and delight
The world with our gifts and talents
And share our blessings and abundance
With those who are in need or alone
And make them feel they have a home
The UK is at risk of recession after revised figures indicate the economy shrank between July and September 2023.
A recession is defined as when the economy shrinks for two three-month periods in a row.
Gross Domestic Product (GDP), which measures the health of the economy, contracted by 0.1% after previous estimates suggested growth has been flat. There was no growth between April and June 2023, after it was first calculated to have risen by 0.2%.
There have been concerns over the UK’s weak economic growth for a while now, but the UK has managed to avoid a recession so far. Whether or not there is a small recession, the bigger picture for analysts is that they expect real GDP growth to remain subdued throughout 2024. However, bear in mind that projections and forecasts do change, as already demonstrated.
Earlier this week, data showed that inflation, which measures the rate of price rises, slowed by more than expected to 3.9% in the year to November 2023, down from 4.6% in the previous month.
Social media platform X suffered global outages for just over an hour on Thursday 21st December 2023.
According to Downdetector, which tracks outages by collating status reports, more than 47,000 U.S. users encountered issues with X and X Pro.
Some users in the UK were also unable to view posts on the site with the message ‘Welcome to X!’ X, (formerly Twitter), is owned by Elon Musk which he bought for $44 billion (£35 billion) in 2022.
The hashtag #TwitterDown started trending within minutes of reports of the outages emerging. But the outage was short-lived, with users able to access the platform again after just over an hour. Since Mr Musk bought the platform, it has been experiencing a loss of advertising revenue.
He has also been accused of allowing antisemitic posts next to advertising. X sued a left-leaning pressure group, Media Matters for America, which made the accusation.
Last month, Elon Musk slammed advertisers that left X, saying they would kill the social media platform.
Unfortunately, X has been attracting the wrong kind of attention in recent months – the question is, can it weather the storm?
The Nasdaq and Dow hit new all-time highs in recent days and the S&P 500 is hot on their heels.
After nine straight days of gains, Wall Street suddenly reversed an hour and a half before the closing bell on Wednesday 20th December 2023.
The sell-off expanded into Asia overnight, with Japan’s Nikkei 225 leading losses, before stocks across Europe also slid into the red on the Thursday morning, 21st December 2023.
Some indicated Wednesday’s sell-off was as simple as investors taking profits after a nine-day mini bull run, in the absence of any obvious catalyst and with U.S. stocks widely seen as overbought.
Other market analysts pointed to a high volume of zero-day options trading as the death knell for the winning streak.
Time left for a Santa rally?
Markets have been on a tear in recent eeks and months, maybe it’s time for a breather. But some suggest U.S. equities are overbought in general – so, is this something more discerning?
Charles Schulz was an American cartoonist and the creator of the comic strip Peanuts, featuring his two best-known characters, Charlie Brown and Snoopy.
UK inflation fell by more than expected in November 2023, driven largely by a drop in fuel prices.
Inflation dropped to 3.9% in the year to November 2023, down from 4.6% in October 2023. Other than fuel, slowing food and household items were also behind the drop.
Inflation has fallen a long way from its peak in 2022, it is still almost double the Bank of England’s 2% target.
The Bank has put up interest rates 14 times since December 2021 to try to slow price rises, pushing up savings rates but also borrowing costs.
The Bank of England Interest rate is currently at 5.25%, a 15-year high.
The Nasdaq Composite index reached a new all-time intra-day of 16,764 points on Monday 18th December 2023.
This was a remarkable achievement for the index, as it surpassed its previous record of 16,729 points. The Nasdaq Composite index has been on a strong uptrend since March 2020, when it bottomed out at 3,193 points amid the COVID-19 pandemic.
Nasdaq 100 index chart -18th December 2023
Nasdaq chart
Since then, the index has recovered thanks to the rapid development and adoption of vaccines, economic stimulus measures, digital transformation trends, consumer demand for online services and products and through the arrival of AI.
The Nasdaq is one of the most popular and widely followed indexes in the world, as it tracks the performance of over 3,000 companies listed on the Nasdaq stock exchange.
The Nasdaq is known for its high concentration of technology and innovation stocks, such as Apple, Microsoft, Amazon, Google, Facebook, Tesla, and many others.
The 10-year Treasury yield slipped further on Monday 18th December 2023, as the final full trading week of 2023 gets underway.
Traders are attempting to digest the ‘dovish’ tone of the U.S. Federal Reserve. The central bank held its key interest rate at 5.5% and revealed that policymakers were pencilling in at least three rate cuts in 2024 marking a more aggressive series of cuts than what was previously expected.
The yield on the 10-year Treasury was marginally lower at 3.913%. Last Thursday, the yield fell below the 4% level, hitting its lowest since July this year.
Bank strategists described the Fed’s move as a ‘big shift’
Guessing game starts
The question now is when will these rate cuts happen, and on Friday we had some mild pushback from Fed officials against the market excitement.
In 1993, amidst the hustle and bustle of family life and work commitments, I distinctly recall contemplating that should I have any disposable income, I would invest it in these particular stocks.
I worked in tech running my own business and Microsoft was one of the businesses I wondered about, Apple was another and later Amazon too.
I never bought them, but had I have done, this is what would have happened.
Microsoft
Microsoft in 1993 was trading at around $2.35 per share. Today the company’s share price is trading at around $374.00 per share. So, had I bought $1,000 (adjusting for splits and dividends), my $1000 would be worth about $160,000 now. Had I bought $10,000 – I would have made just over $1 million.
Amazon
Had I bought Amazon a little later in 1997 and held it, a $1000 investment would now be worth a staggering $1.7 million (adjusting for splits and dividends). After the IPO and subsequent stock splits Amazon shares were trading at just 7 cents each according to Amazon’s website.
Apple
And as for Apple – a stock purchase in 1993 of $1000 would now be worth approximately $900,000 (not allowing for stock splits and dividends). Apple was trading at 22 cents per share in 1993.
The question is, if I had made the stock purchases – would I still be holding them long-term?
Intel’s new chip will go head-to-head with Nvidia and AMD
Intel unveiled new computer microchips on Thursday 14th December 2023, including Gaudi3, a chip for generative AI software.
Intel also announced Core Ultra chips, designed for Windows laptops and PCs, and new fifth-generation Xeon server chips. Intel’s server and PC processors include specialized AI parts called NPUs that can be used to run AI programs faster.
AI race
AI models, like OpenAI’s ChatGPT, run on Nvidia GPUs in the cloud. It’s one reason Nvidia stock has been up nearly 230% year to date while Intel shares have risen 68%. And it’s why companies like AMD and, now Intel, have announced chips that they hope will attract AI companies away from Nvidia’s dominant position in the market.
Gaudi3 will compete with Nvidia’s H100, the main choice among companies that build huge factories of the chips to power AI applications, and AMD’s forthcoming MI300X, when it starts shipping to customers in 2024.
CEO Gelsinger
‘We’ve been seeing the excitement with generative AI, the star of the show for 2023,’ Intel CEO Pat Gelsinger reportedly said at a launch event in New York where he announced Gaudi3 along other chips focused on AI applications.
Intel upping the anti with its Gaudi AI chip. The AI PC to become the new AI start of 2024 and beyond!
‘We think the AI PC will be the star of the show for the upcoming year,’ Gelsinger added. And that’s where Intel’s new Core Ultra processors, also announced on Thursday, will come into play.
