“On my first day in office, I will abolish the preferential policies for electric vehicles. “Trump said at the recent Republican National Convention in Milwaukee.
He also claimed that this could save the American automotive industry, which is heading towards “complete destruction,” and enable American consumers to save thousands of dollars per car.
Trump also emphasized that if he cannot be elected president, the US automotive industry will be “bloodied” by China.
On July 22, four days later, incumbent President Biden announced his withdrawal from the 2024 election, and Trump’s opponent in November became Harris – in the former’s eyes, Harris was easier to deal with than Biden.
And once Trump starts his second term on the presidency, will the series of electric vehicle policies implemented by the Biden administration in the past be aborted? What impact will Trump’s new policies have on the US and even the global automotive industry?
Electric vehicles have a short range, are expensive and bulky. “In contrast to current President Biden, Trump has made no secret of his contempt for electric vehicles. As early as his previous term in 2020, Trump pushed for the cancellation of the fuel consumption standards for cars set by the Obama administration: under the original standards, car manufacturers had to achieve an average fuel efficiency of 5% per gallon of gasoline; In the new cycle from 2021 to 2026, the standard will be lowered to 1.5%.
“These (development of electric vehicles) expenditures are actually a new ‘green scam’. “At last week’s Republican Party Congress, Trump once again emphasized that the strategy of developing electric vehicles is not feasible and will only harm the interests of American auto workers. Trump said he wants to save this money for projects such as roads, bridges, and dams. In contrast, Biden has made the shift to electric vehicles one of his top climate and industry policies, and has set a goal of achieving 50% of new car sales as electric vehicles by 2030.
Regarding the electric vehicle mandate mentioned by Trump in his speech, electric vehicle media Electrek emphasized that the Biden administration has not actually issued any so-called “mandatory policies”. In the past few years, the Biden administration has successively passed bills related to the new energy vehicle industry, such as the Bipartisan Infrastructure Development Act and the Inflation Reduction Act. Among them, the Inflation Reduction Act has the greatest impact, but it has not directly mandated the sale of electric vehicles.
In November 2021, the Bipartisan Infrastructure Development Act was passed, involving multiple fields such as roads, bridges, railways, public transportation, and urban infrastructure, with a total value exceeding $1.2 trillion. In December 2022, the US Department of Energy (DoE) announced the first batch of 20 new energy industry related projects funded by the bill, with a total of 20 domestic US companies participating and receiving a total of $2.8 billion in funding support.
The Inflation Reduction Act was passed by the US Congress in August 2022. Its main content includes investing approximately $430 billion over the next decade, including $369 billion in subsidies for climate and clean energy to support the production and investment of electric vehicles, key minerals, clean energy, and power generation facilities. The Inflation Act stipulates that American consumers can receive a total subsidy of $7500 for purchasing clean energy vehicles that meet the requirements, but it must be produced and sold in the United States or North America as a prerequisite.
On Wednesday, “artificial intelligence trading” seemed to be in trouble, with the stock prices of the “Big Seven” experiencing their largest single day decline since October 2022.
According to Dow Jones market data, the stock index of these seven companies weighted by market value fell by 4.1%, accumulating a 9.8% decline since the recent high on July 10th. During the same period, the Roundhill Magnificent Seven ETF has fallen more than 11%, entering a correction zone for the first time since October last year.
Since the lower than expected inflation report in July, market expectations for multiple interest rate cuts by the Federal Reserve before the end of 2024 have risen, with the first round of cuts expected to begin in September. Since then, the total market value of the “Big Seven” has evaporated by over $1.7 trillion.
As expectations of the Federal Reserve’s September interest rate cut heat up, small cap and value stocks quickly rose after falling behind the S&P 500 and Nasdaq Composite Index for most of 2024.
The selling pressure on major indices seems to be mainly concentrated in the technology sector, which has seen an increasing proportion in the market capitalization weighted S&P 500 index over the past year. Before the end of trading on Wednesday, the information technology sector of the index fell nearly 4%.
The sell-off on Wednesday was driven by the latest financial reports from Tesla (TSLA. US) and Google’s parent company Alphabet (GOOG. US).
Tesla reported a 40% decline in quarterly profits. According to Dow Jones data, its stock price fell more than 12% on Wednesday, marking the largest decline since January. On the other hand, although Alphabet’s profits and sales growth exceeded expectations, its YouTube advertising revenue did not meet analysts’ expectations.
Perhaps the most concerning detail in the financial reports of both companies is that Alphabet’s active investment in artificial intelligence may take longer to take effect. The company’s stock price has fallen nearly 5% in recent trading.
Kim Caughey Forrest, founder and chief investment officer of Bokeh Capital Partners, said, “Their investment returns may take longer, which is crucial for me.” In the past two weeks, the sell-off of the “Big Seven” stocks caught investors off guard, but there are already signs of this happening.
According to BondCliQ data, investors have been selling corporate bonds issued by members of the “Big Seven” over the past two weeks, despite these sales having little impact on yields.
As technology stocks fell, the small cap Russell 2000 Index and the value oriented Dow Jones Industrial Average also fell, but Wednesday’s decline was relatively small and strong since early June.
Other market sectors continue to remain strong, with utility and healthcare stocks performing particularly well. Meanwhile, approximately 217 S&P 500 constituent stocks continued to rise on the same day.
However, the strength of these stocks is not enough to prevent the S&P 500 from experiencing its first 2% decline in 356 days. The index closed down 2.31% to 5427 points, marking its worst performance since December 2022.
The tech dominated Nasdaq Composite Index fell 3.64% to 17342 points, marking its worst performance since October 2022.
On Friday, July 19th Eastern Time, the stock price of SunPower (SPWR. US), a leading US photovoltaic company, plummeted by over 50%, hitting a historic low. Its stock price has plummeted by nearly 99% in the past three years. US investment bank Roche Securities stated that SunpPower told distributors on July 17th that the company no longer supports new leasing and power purchase agreement sales, cannot provide installation services, and will stop shipping.
In the eyes of analysts, this means that this well-established photovoltaic manufacturer, founded in 1985, is coming to an end and is likely to enter bankruptcy liquidation proceedings; Some institutions directly lowered the target price of the stock to $0.
SunPower stated in the letter that the company is no longer able to provide installation services for transported and delivered goods. “SunPower is aware of the ‘seriousness’ of this decision and is seeking alternative suppliers to transfer the sold projects
Bloomberg analyst Pol Lezkano said that this is actually saying ‘the company can no longer continue to operate’.
After the exposure of this letter, Wall Street analysts generally believe that SunPower is on the brink of bankruptcy.
Guggenheim Securities has lowered its target price for SunPower from $1 to $0, analysts Joseph Osha and Hilary Cauley wrote in Friday’s report, “This actually marks the end of SPWR as an operating company
Guggenheim analysts said that SunPower is likely to “enter into (bankruptcy) liquidation proceedings” and ultimately sell its remaining assets and delist its stocks. “Considering the company’s accumulated debt, we believe that SPWR’s equity no longer holds any value
Earlier this week, JPMorgan analysts also told clients that SunPower’s suspension of operations is “indefinite”. The bank explained that this decision was mainly due to the weakening of its cash flow and balance sheet.
Analysis suggests that there are two very important catalytic factors for the growth of rooftop solar business in the United States: low interest rates, which enable consumers to afford the cost of such installations, and state-level policies, where households installing equipment can receive generous rewards for selling excess solar power to the grid.
At present, the two catalytic factors mentioned above do not exist. Among them, the Federal Reserve has maintained ultra-high interest rates for a long time; California, the largest solar energy market in the United States and the headquarters of SunPower, has reduced the compensation for households and businesses for delivering excess solar power to the grid, causing a significant blow to the industry.
It is worth mentioning that Sunpower is one of the largest photovoltaic companies in the United States, with over 5000 employees and offices in China, Switzerland, Germany, Italy, Spain, South Korea, the United States, Australia, the United Kingdom, Greece, Israel, and the Philippines.
This year, SunPower has replaced its CEO and COO. Due to operational difficulties, SunPower announced in April that it would lay off approximately 1000 jobs, accounting for about 26% of its total workforce.
This is the third American photovoltaic company to collapse in the past month.
A few days ago, American photovoltaic manufacturer Toledo Solar announced that it will immediately terminate all research and development work and gradually cease operations, and the company is about to go bankrupt. Toledo Solar focuses on the household market and specializes in the cadmium telluride thin film solar cell technology route.
On June 28th, Titan Solar Power, a household photovoltaic installer, also announced a permanent closure. As one of the largest household photovoltaic manufacturers in the United States, Titan Solar has an 11 year history. Last year, it achieved sixth place in the country’s household photovoltaic market.
Titan Solar, SunPower, and many other American photovoltaic companies have also fallen into the tide of the times.
In addition to the three companies mentioned above, several photovoltaic companies in the United States have gone bankrupt this year, including Infinity Energy, Solcius, and Kayo Energy.
Roche Securities stated that in 2023 alone, over 100 household photovoltaic companies and distributors in the United States will go bankrupt, which is six times the total number in the previous three years; More than 100 companies are expected to face bankruptcy.
Taking California, which is most affected by NEM 3.0, as an example, the local demand for photovoltaics has plummeted and the installation of rooftop photovoltaics has decreased by 80%. The California Photovoltaic and Energy Storage Association reported that thousands of projects have been put on hold, over 17000 employees have been laid off, and a wave of well-known companies have declared bankruptcy.
If initially only smaller companies collapsed in the cold wave of household photovoltaics in the United States, now with the collapse of Titan Solar, the situation is further severe.
In the US household photovoltaic industry, leading companies such as Sunrun and Sunnova are also deeply mired in difficulties: poor management, dismal performance, and stock prices have fallen by 80% from their historical highs in 2021.
Israeli company CytoRisk, which utilizes artificial intelligence to develop disease research models, announced on Wednesday that it has raised $80 million in a private equity round, with participation from Nvidia, Pfizer, Thermo Fisher, and venture capital firm OurCrowd.
Six of the world’s top ten pharmaceutical companies adopt the company’s technology
CytoReason plans to expand the application of its model to more indications and increase its proprietary molecular and clinical data. The company stated that six of the top 10 pharmaceutical companies worldwide use its technology to make data-driven decisions in the fields of immunology, inflammation, immune oncology, metabolism, and other therapeutic areas through AI platform based disease models.
The company also plans to establish an office in Cambridge, Massachusetts later this year.
The company stated that shortening research and development time and increasing the probability of technological and regulatory success (PTRS) are the top priorities for life science companies, and speed, safety, and accuracy are crucial when making asset related research and development decisions. CytoRisk provides molecular level insights and valuable AI tools for the pharmaceutical industry, helping practitioners improve the success rate of phase II clinical trials and optimize their R&D investment portfolios.
According to media reports, Pfizer expanded its partnership with CytoReason in 2022 with a $20 million investment, which could reach $110 million by 2027.
CytoReason said it looks forward to using this new funding to accelerate its growth, further consolidate its position in the market, and enable more pharmaceutical and biotechnology companies to improve the speed and accuracy of cross therapeutic development, thereby benefiting more patients worldwide.
Kimberly Powell, Vice President and General Manager of Healthcare at Nvidia, stated, “Over the past year, CytoReason has strengthened its platform with Nvidia’s latest accelerated computing and AI platform, achieving over 10 times acceleration in inference workloads. Our continued collaboration with CytoRisk will help more life science companies benefit from CytoRisk’s predictive clinical insights
AI based drug development is thriving
According to a previous article by Wall Street Journal, according to BCG’s latest research, the success rate of AI generated drug molecules in phase I clinical trials is as high as 80% -90%, while the historical average is about 50%. Except for Phase I, in Phase II clinical trials, AI found a success rate of 40% for drug molecules. The results indicate that AI has strong capabilities in designing or identifying molecules with drug properties, further demonstrating the clinical potential of AI in discovering molecules.
At the NVIDIA GTC conference, there were 90 events related to healthcare/life sciences, ranking first among all industries and surpassing popular fields such as automotive, cloud services, and hardware/semiconductor.
Novo Nordisk, the world’s hottest pharmaceutical giant, has announced at GTC that it will collaborate with Nvidia to build a supercomputer in Denmark. A spokesperson for the Novo Nordisk Foundation stated that artificial intelligence has the potential to fundamentally change the way complex scientific research is conducted in the fields of health and life sciences. This also represents Nvidia’s ambition to participate in this field.
According to calculations by TD Securities, the digital transformation of the healthcare industry has generated over $1 billion in revenue (including direct and indirect revenue) for technology companies, and over time, the market size may reach billions of dollars.
Analysts point out that currently, the application of AI technology in healthcare covers multiple aspects such as drug discovery, medical equipment and imaging, and digital healthcare systems, all of which Nvidia has already laid out. Subsequently, as the global healthcare industry shifts its research and capital expenditures towards generative artificial intelligence, Nvidia can generate substantial revenue through its powerful computing platform and AI software stack.
In addition, Nvidia announced partnerships with two leading healthcare companies, Johnson&Johnson and GE Healthcare, to reach agreements on the application of artificial intelligence in surgery and the introduction of medical imaging. Nvidia also unveiled over 20 AI driven healthcare tools at the conference.
On Monday, July 15th at around 12:35 PM Eastern Time, Federal Reserve Chairman Powell attended a lunch meeting at the Washington D.C. Economic Club and had a conversation with the club’s chairman and co-founder of the Carlyle Group, David Rubenstein.
This is his first public speech since last week’s unexpected cooling of CPI inflation. The monetary decision of the Federal Reserve’s FOMC will be made on July 31st, and officials will enter a period of silence from this Saturday until Friday after the FOMC meeting, so the remarks of Powell and other members of the vote this week are crucial.
Nick Timiraos, a well-known financial journalist known as the “Federal Reserve News Agency,” said that Powell’s latest speech hinted at a rate cut, but refused to disclose the specific time. Powell’s leadership of the Federal Reserve usually avoids surprising the market with short-term policy decisions, so his remarks today did not change the market’s expectation of the Fed remaining inactive in July. Powell said, “The synchronous slowdown of inflation and economic activity is basically in line with the expectations of the Federal Reserve. I will not send any signals regarding any specific FOMC meeting. We will make corresponding monetary decisions at each meeting.”
Overall, Powell’s speech remains “dovish”, stating that the US economy has been doing well in recent years and the job market has entered a better and more balanced state. He specifically mentioned that there has been more progress in US inflation in the second quarter of this year, and the last three inflation reports have been “quite good”: “The economic data in the first quarter did not strengthen our confidence (that inflation would fall back to the 2% target), but the three data in the second quarter, including last week’s data, did to some extent enhance our confidence.”
He pointed out that while the Federal Reserve is paying attention to the cooling of inflation, it has also begun to be more concerned about the potential risk of labor market weakness. Some analysts say that recent statements from multiple Federal Reserve officials are reinforcing this key shift in tone: “Now that (US) inflation has fallen and the labor market has indeed cooled down, we will consider the dual mission of (maximizing employment and price stability) at the same time, and the balance between them is much better. If there is an unexpected weakness in the labor market, it may also be another reason to take policy action.”
Powell also reiterated his remarks during the congressional hearing last week, saying that interest rates could be cut without waiting for inflation to fall to the Federal Reserve’s target of 2%. “It will take too long”, because the impact of monetary policy is lagging. If the interest rate is kept too high for too long, it will excessively inhibit economic development. “The job market does not have to be more tight than before the COVID-19 epidemic.”
His other remarks during the Q&A session included: Powell was asked if he would serve as Federal Reserve Chairman until May 2026 and said, “Yes. I have no comment today on whether I will continue to be appointed as the Chairman of the Federal Reserve in the future. I feel very happy to serve as the chairman of the Federal Reserve.
A ‘hard landing’ of the US economy is not currently the most likely scenario, and it has always been believed that there is a ‘soft landing’ path. There is a possibility of inflation falling back to 2% without causing pain in the job market.
The neutral interest rate may have risen from the level during the crisis. The FOMC monetary policy still has some limitations, but it is not extremely restrictive anymore. The factors that cause slow changes in prices may or may not have changed.
The Federal Reserve will use ChatGPT to predict potential questions that may be raised by the media during press conferences after the FOMC, but will not use AI for monetary decision-making. The questions generated by ChatGPT are not as excellent as those asked by reporters on site.
I have long been very concerned about the unsustainable size of the US fiscal deficit. Although the Federal Reserve should not evaluate these, we really need to work hard to resolve the unsustainability of the debt problem. Solving the deficit problem requires cross party cooperation.
Political violence has no place in American society. It is fortunate that the injuries sustained by former US President Trump after his assassination were not more severe. The decision of the Federal Reserve will not be influenced by political factors, and Powell refuses to discuss the market impact of Trump’s assassination.
During Powell’s speech, the US stock index maintained its upward trend, with small cap stocks leading the way with a nearly 2% increase. The Dow Jones Industrial Average rose over 200 points and both hit historic highs with the S&P 500 index at the beginning of the session. After his Q&A session, the gains of major stock indices, except for small cap stocks, narrowed.
As Powell talked about the progress of inflation and confidence, the 10-year US Treasury yield fell below 4.20% and hit a new daily low. During the speech, it regained its short-term decline and expanded to 4.6 basis points within a day after the speech, standing at 4.23%.
The yield of two-year US Treasury bonds also plummeted to a daily low of 4.4154% in the short term, but rose and approached 4.46% within a day after Powell’s speech.
Spot gold expanded its gains to a daily high of $2439.75 per ounce in the early stages of Powell’s speech, but narrowed its gains to 0.4% after the speech, pushing it below $2420. Prior to Powell’s speech, it had risen 1% and broken through the $2430 integer.
At the beginning of Powell’s speech, the US dollar index DXY turned down and approached 104 within a day, then recovered from the overall decline and turned back to rise again. After the speech, the increase expanded to 0.13% at 104.23. The US dollar rose 0.1% against the Japanese yen and returned above 158, having previously plunged to a daily low of 157.19.
Today, let’s take a look at some highly acclaimed must-have investment tools in the US stock market. Many of these tools are commonly used by strategists, so after years of ups and downs in the US stock market, these tools are becoming more and more user-friendly. Everyone should quickly learn to use them and rely on tools to get rich!
“My Favourite Investing Tools”（MY FAVOURITE INVESTING TOOLS），Created by “FROM GROWTH TO VALUE”.
Categories and corresponding companies are as follows:
1.Screeners
oFinviz
oTIKR
oMorningstar
2.Information
oSeeking Alpha
oYahoo Finance
oYouTube
osubstack
3.Brokers
oInteractive Brokers
oDEGIRO
4.Financial Data Analysis
oKoyfin
5.Charts
oYCharts
6.Earnings Calls
oQuartr
7.Financial Terms
oInvestopedia
The companies or services listed in the chart provide specific tools or data to help investors make better investment decisions. For example:
Screeners such as Finviz and Morningstar offer powerful features to help users filter stocks based on specific financial and market criteria.
Information platforms like Seeking Alpha and Yahoo Finance provide market news, analysis, and data.
Brokers such as Interactive Brokers and DEGIRO offer stock trading services.
Financial data analysis tools like Koyfin provide in-depth market and financial analysis.
Charting tools like YCharts offer complex data visualization and charts.
Earnings call transcript tools like Quartr provide access to company earnings call transcripts.
Financial term explanations like Investopedia offer educational resources on financial and investment concepts.
The aim of the guide is to provide investors with a practical reference to let them know what resources they can utilize when conducting various investment analyses and decisions.
The investment tools mentioned above each have their own characteristics, suitable for different investor needs and strategies. Here is an overview and in-depth comparison of the features of these tools:
Screeners:
Finviz and Morningstar provide advanced stock screeners that can filter potential investment opportunities based on various financial indicators and market performance.
TIKR: Possibly a relatively new tool, it offers global market data and focuses on the needs of value investors.
Finviz: Known for its intuitive interface and wide range of data filtering options. It offers market maps, stock charts, and advanced screeners.
Morningstar: Considered an authoritative resource for investment research, it provides in-depth fund and stock analysis, as well as comprehensive evaluations of portfolios.
Information
Seeking Alpha, Yahoo Finance, and YouTube are platforms for investors to access market news, analysis, and viewpoints.
Seeking Alpha: Provides in-depth articles and research reports from investors and analysts.
Yahoo Finance: Offers a wide range of financial news, real-time stock quotes, and simple investment portfolio tracking tools.
YouTube: Investors can find various video content on financial and investment topics, including tutorials, analysis, and interviews.
Substack: A newsletter platform that may offer in-depth analysis and exclusive content from individual columnists.
Brokers
Interactive Brokers and DEGIRO provide online trading platforms for investors to buy and sell securities.
Interactive Brokers: Preferred by professional investors, offering extensive market access and advanced trading tools.
DEGIRO: Popular for its lower trading fees and user-friendliness, particularly suitable for retail investors in Europe.
Financial Data Analysis
Koyfin offers financial data analysis and market insights.
Koyfin: A relatively new tool favored by investment analysts for providing rich market data and visualization tools.
Charts
YCharts provides advanced charting and data visualization tools.
YCharts: Catering to professional investors and financial analysts, it offers detailed charts and financial data analysis functions.
Earnings Calls
Quartr provides records and analysis of corporate earnings calls.
Quartr: Focused on collecting and organizing earnings call data of companies, enabling investors to track and analyze the financial performance of businesses.
Financial Terms
Investopedia is an educational platform that provides definitions and explanations of financial terms.
Investopedia: One of the most well-known financial education resources, it offers detailed explanations of financial terms, as well as guidance on investing and personal finance.
The comparison of these tools shows that they cover a wide range of needs from market analysis to individual education. Different investors can choose a corresponding combination of tools based on their investment style and needs to optimize their investment strategies.
You’re welcome!
The strategist will continue to update the situation of strategy combinations;
Last time, a brother found the strategist and said he wanted to follow the strategist for live trading. Let’s have a vote to see what the brothers think:
For brothers who trade in the US stock market, feel free to engage if you have any questions!
On the 12th, according to sources cited by the media, OpenAI, the leader in generative AI, is developing a new AI big model project called “Strawberry”, which is very mysterious.
What is OpenAI’s mysterious project ‘Strawberry’?
According to media reports, an internal document of OpenAI in May showed that the “Strawberry” project being developed by the internal team of OpenAI aims to enhance the reasoning ability of OpenAI’s model and its ability to deal with complex scientific and mathematical problems, so that large models can not only generate query answers, but also plan in advance, so as to browse the Internet independently and reliably and carry out “in-depth research” defined by OpenAI.
According to over a dozen artificial intelligence researchers, this is a feature that big language models have not yet been able to achieve.
It is obvious that OpenAI does not want to disclose detailed information about ‘Strawberry’ at this stage.
When asked about the details of “Strawberry,” a spokesperson for OpenAI just took a roundabout approach and said, “We hope that AI models can see and understand the world like humans. Continuously researching new AI capabilities is a common practice in the industry, as we all believe that AI’s reasoning ability will continue to improve over time
After all, even within OpenAI, the working principle of “Strawberry” is strictly confidential, and there is currently no news on the release time of “Strawberry”.
But some media have revealed that the predecessor of the “Strawberry” project was the Q * algorithm model, which can solve difficult scientific and mathematical problems. And mathematics is the foundation of the development of generative AI. If AI models master mathematical abilities, they will have stronger reasoning abilities, even comparable to human intelligence. And this is also something that current large language models cannot achieve.
Last year, Q * was first exposed in an internal letter from OpenAI, and CEO Ultraman was fired because of this Q * project.
Some OpenAI insiders have pointed out that Q * may be a breakthrough for OpenAI in its pursuit of General Artificial Intelligence (AGI), and its rapid development is shocking, raising concerns that AI’s rapid development may threaten human security. At a time when such concerns were spreading, Ultraman chose to accelerate the development and commercialization of the GPT series models without informing the board, which sparked dissatisfaction from the OpenAI board and led to their decision to kick him out.
Using ‘Strawberry’ to Improve the Reasoning Ability of Large Models
Although we cannot obtain detailed information about ‘Strawberry’, we can see from OpenAI’s recent clues that enhancing the reasoning ability of generative AI models is its next development focus.
OpenAI CEO Ultraman once emphasized that the key to AI development in the future will revolve around reasoning ability.
At an internal staff meeting this Tuesday, OpenAI presented a demonstration of a research project, stating that the project has human like reasoning abilities. An OpenAI spokesperson confirmed the internal meeting to the media, but refused to disclose the details of the meeting, so it cannot be determined whether the project being demonstrated is a ‘strawberry’.
But according to insiders, the “Strawberry” project includes a specialized “post training” method, in which the generative AI model has been pre trained on a large dataset and further adjusted to improve its performance on specific tasks. This is similar to the Self Thought Reasoner (STaR) method developed by Stanford University in 2022.
One of the creators of STaR, Professor Noah Goodman from Stanford University, has stated that STaR can enable AI models to “guide” themselves to higher levels of intelligence by repeatedly creating their own training data. In theory, it can be used to enable language models to achieve intelligence beyond that of humans.
This is in line with OpenAI’s desire for ‘reasoning ability’. Moreover, OpenAI also released a five level roadmap for the future development of AI on the 11th:
According to OpenAI’s conjecture, AI will go through five stages in the future:
Level 1: chatbots, artificial intelligence with conversational language
Level 2: Reasoning, human level problem-solving
Level 3: Agent, a system that can take action
Level 4: Innovators, AI that can assist in invention
Level 5: Organizer, AI capable of completing organizational tasks
Based on the information currently collected, the “Strawberry” project is highly likely to be the key to helping OpenAI achieve Level 2 AI.
According to media reports, an OpenAI executive stated that AI models are currently at the first level, but it is expected to soon reach the second level, which is inference. OpenAI is currently working on achieving doctoral level intelligence on specific tasks, which is expected to be achieved within a year or a year and a half.
Another feature that OpenAI focuses on is improving the ability of large language models to perform Long Horizon Tasks (LHT), which requires the model to plan ahead and execute a series of tasks over a longer period of time.
According to insiders, in order to achieve this goal, OpenAI hopes that “Strawberry” can become a model for creating, training, and evaluating “deep research”, and use “Computer Using Agents” (CUA) to autonomously browse web pages and take action based on their findings.
If OpenAI succeeds, the “Strawberry” project is likely to redefine AI’s capabilities, enabling it to make significant scientific discoveries, develop new software applications, and autonomously perform complex tasks, taking humanity one step closer to AGI.
Due to market speculation that the Federal Reserve will cut interest rates about twice this year, the S&P 500 index hit its 36th new high since early January. Bloomberg data shows that analysts also predict that US companies’ earnings for the second quarter are expected to grow by around 9%, the highest level since the first quarter of 2022.
Compared to betting on the standard 25 basis point rate cut in September, traders are increasing their bets that the Federal Reserve will cut interest rates by 50 basis points in September.
This is fully reflected in the federal funds futures market. The weaker than expected inflation data released on Thursday sparked a buying frenzy in October, which continued on Friday. The contract expiring on October 31st has fully absorbed the expectation of decision-makers to cut interest rates by 25 basis points at the September 18th meeting.
Any buying at a higher price level means that more people are expected to believe that the Federal Reserve may initiate its first easing cycle in years with a ‘big bang’.
The position also benefited from the expectation of a 25 basis point interest rate cut on July 31st and September 18th, but traders gave up hope for a rate cut in July a few weeks ago, and no major Wall Street bank predicted a rate cut in July.
The open interest data of futures on the Zhishang Exchange indicates that Thursday’s buying has brought new risks. The trading volume was slightly lower than 260000 contracts, setting a record for the trading volume of contracts expiring in October. Interest in buying remained high on Friday, with a trading volume of nearly 150000 as of 10:30 am New York time.
On Friday, there was little change in the market’s implicit expectations for the Federal Reserve’s policies. Compared to Thursday’s Consumer Price Index (CPI) data, the Producer Price Index (PPI) released earlier on Friday had little impact on the market.
The settlement value depends on the swap contracts determined by the Federal Reserve’s policy decisions, which fully digest the expectation of a 25 basis point rate cut by the Fed in September and a total of 60 basis point rate cuts by the end of the year – this means that there will be two 25 basis point rate cuts within the year, and the probability of a third 25 basis point rate cut is 40%.
Goldman Sachs begins to be bearish
Scott Rubner, Managing Director and Strategist of Goldman Sachs’ Global Markets Division, released a report on Monday stating that the US stock market will experience two consecutive painful weeks starting from early August as a large amount of funds flow out of the stock market. Rubner said, “Painful trading has shifted from upward to downward. The best trading day of the year has passed, buyers are already full, and ammunition is running out
Rubner believes that the threshold for corporate performance is high because these high expectations have already been formed, which means that the earnings season is no longer a tailwind period for the stock market. The most important thing is that the positions of systematic funds have reached such a high level that any surge in volatility or lower than expected returns, especially from “large holdings of market value weighted stocks, may force non fundamental sellers to reduce risk”.
From a historical perspective, August was the month with the worst inflow of funds into passive investors and mutual fund stocks. Rubner wrote that there is no expected inflow of funds in August, as investors have already deployed funds for the third quarter after hitting the second largest stock inflow on record in the first half of 2024.
His analysis of data since 1928 shows that the S&P 500 index reached a “local peak” in mid July and then entered the typically fifth worst two weeks of the year in early August.
He wrote, ‘We are ending the best trading period of the year.’ Rubner also said that for now, this is his last bullish view of the US stock market.
It is worth noting that there have been more voices of bearish sentiment towards US stocks recently.
Morgan Stanley strategist Mike Wilson said that as uncertainty surrounding the US presidential election, corporate earnings reports, and Federal Reserve policies intensifies, traders should be prepared for a pullback in the US stock market. I think there is a high possibility of a 10% correction between now and some point during the US election period
David Kelly, Chief Global Strategist at JPMorgan Asset Management, believes that although the latest non farm payroll data shows a gradual slowdown in US economic growth and the Federal Reserve is expected to cut interest rates twice in 2024, he is not optimistic about US stocks because they may face the risk of a significant pullback.
Legendary Wall Street investor John Hussman recently stated that by some standards, the S&P 500 index seems to be the most overvalued since before the 1929 stock market crash. Hussman even stated that a 70% drop in the US stock market is not surprising.
According to Bloomberg’s report on July 12th, insiders revealed that Musk donated money to a low-key organization called America PAC. It is currently unclear how much money he paid, but insiders describe the amount as enormous. The next time the committee needs to disclose the donation list is July 15th.
This move highlights the growing influence of this tech giant with a net worth of $263.6 billion, who ranks first on the Bloomberg Billionaires Index, and also demonstrates how a self proclaimed political independent who would rather stay out of politics can transform into a figure who frequently uses his X social media platform to support right-wing views and attack the Democratic Party.
Before Musk paid, Trump had already surpassed his competitor Joe Biden in terms of fundraising amount, as wealthy Wall Street and corporate funders came to the rescue. At the same time, the catastrophic debate led Democratic donors to put away their check books, causing Biden’s new sources of funding to gradually dry up.
Musk has not publicly endorsed any candidate for the 2024 election. He stated earlier this year that he estimated he would not provide funding for the campaigns of Trump or Biden. But his decision to open his wallet now has created an opportunity for him to become an important Republican financier.
Biden’s campaign fundraising encounters obstacles
According to media reports on Friday (July 12), two sources revealed that some Democratic donors have told Future Forward that if Biden continues to be the party’s presidential candidate, they will shelve donation commitments worth approximately $90 million.
Two informed sources estimate that the total amount of donation commitments put on hold by donors is about or exceeds $90 million, but they did not specify who made these decisions. According to another source, ‘Future Forward’ has not yet made significant strategic decisions until it is clear who will become the campaign leader.
Regarding this news, a consultant from Future Forward stated that the organization hopes that donors who have suspended their donations can return after the uncertainty is resolved. LinkedIn co-founder and billionaire Reid Hoffman’s assistant also criticized these phenomena.
Hoffman is one of the main donors to ‘Forward’ and has donated $10 million. Hoffman’s assistant Rae Steward told the media that freezing funds by some other donors at this critical stage of the election cycle is a problematic decision.
Three weeks ago, Biden’s poor performance in a debate with former President Donald Trump intensified concerns about whether the 81 year old could defeat Trump and be competent in public office. This has also led to a more open call within the Democratic Party for a “change of leadership” in recent times.
The day before, when introducing Ukrainian President Zelensky during the NATO summit, Biden mistakenly referred to him as “President Putin”. At the subsequent press conference, Biden made another slip of the tongue and referred to Vice President Harris as “Vice President Trump”.
On Friday, several Democratic congressmen joined the ranks of ‘Biden should withdraw from the presidential race’. California Democratic Congressman Mike Levin recently wrote, “I believe it’s time for President Biden to pass on the torch
However, Biden emphasized at yesterday’s press conference that he will not give up running for the 2024 presidential election unless opinion poll data shows that “it is impossible to win”.
According to The Washington Post, the Leadership Now Project, an organization composed of hundreds of business leaders, has sent a letter to the White House suggesting that current US President Biden abandon his bid for re-election.
The situation of the US presidential election is affecting the nerves of the global market, and the heated debate over whether Biden will give up running for re-election has also spread to Wall Street. At present, traders are transferring funds to the US dollar, US treasury bond bonds and other assets that may be affected by Trump’s return to the White House – “Trump Trading” is making a comeback.
Currently, the consensus on Wall Street is that Trump’s re-election will stimulate a combination of inflation trading benefiting from loose fiscal policies and greater protectionism, such as the US dollar, US bond yields, and banking, healthcare, and energy stocks.
However, while the “Trump deal” reappeared, a long silent financial problem – the US debt crisis – also attracted attention again.
In a report shared by Nomura to the Daily Economic News, Rob Subbaraman, Nomura’s head of global macro research, analyzed that in the worst-case scenario, the US election could catalyze the country’s fiscal balance to a critical point, similar to the debt crisis experienced by some emerging market countries. Trump’s victory may lead to market expectations of more fiscal stimulus and further inflation. A more extreme scenario is that he may halt debt repayment and trigger a default.
The ‘Trump Deal’ is making a comeback
According to a report by The Washington Post on July 5th, the Leadership Now Project, an organization composed of hundreds of business leaders, has sent a letter to the White House suggesting that current US President Biden abandon his bid for re-election. This letter has been signed by 168 people, including Christy Walton, the daughter-in-law of the founder of Wal Mart, Michael Novogratz, a billionaire, and Paul Tagliabue, the former president of the NFL.
The media also reported that an increasing number of Democratic senators believe that President Biden cannot continue his campaign. According to two insiders, Virginia Democratic Senator Mark R. Warner is attempting to rally a group of Democratic senators to demand that Biden withdraw from the presidential race.
On the same day, in an interview with ABC News, Biden stated that he was “exhausted” and “sick” on the night of the debate, but still “in good condition” and no one had told him to “undergo cognitive and neurological tests”. He also stated that no one is more qualified than himself to become president or win this election.
Prior to the interview, Biden had just delivered a speech in the swing state of Wisconsin, stating that he would not yield to pressure to withdraw from the election and would “defeat Trump”.
JPMorgan Chase stated in a report on July 3 that if Biden falls behind Trump by 8% to 10% in key swing states such as Michigan, Wisconsin, and Pennsylvania in polls over the next three weeks, he will face enormous pressure to withdraw from the race. Currently, Trump is leading in swing states, with a lead ranging from a draw to 5.6%.
With the changing situation of the US election, the market has begun to adjust its investment portfolio. The consensus on Wall Street is that Trump’s re-election will stimulate a combination of inflation trading benefiting from loose fiscal policies and greater protectionism, leading to a strengthening of the US dollar, higher yields on US Treasury bonds, and increased returns on banks, healthcare, and energy stocks.
Among all the “Trump Trading” markets, the bond market has the most intense trading activity. Investors have stepped up buying short-term treasury bond bonds and selling long-term treasury bond. Big banks, including Morgan Stanley and Barclays, are betting that the yield curve will steepen. From June 28 to July 1, the yield of benchmark 10-year US treasury bond bonds rose for three consecutive days, and then fell back a few days later. As of 19:43 on July 5, the yield of 10-year US treasury bond bonds was 4.335%.
And currency is the market that sends signals earliest. According to Bloomberg analysis, although the US dollar has been boosted this year by the Federal Reserve’s suggestion to maintain interest rates at higher levels, it has also risen as Trump’s chances of winning the debate increase, as he promises to impose more tariffs and take a tougher stance on immigration issues.
In the US stock market, medical insurance companies, banks, and energy stocks are being favored by investors. Bloomberg reported that these stocks are expected to benefit from Trump’s policies on regulatory environment, mergers and acquisitions, and trade relations.
Tom Essaye, President and Founder of Sevens Report, stated that Republican policies are typically more favorable for business development.
In the upcoming presidential election, the direction of taxation is a key issue facing the market.
Last week, the bond market demonstrated this. Due to concerns about the increase of deficit, the yield of US treasury bond bonds soared, because after Biden’s poor performance in the debate, investors began to consider the potential impact of Donald Trump’s second election as president.
This is one of the most important policy issues of the past decade, “Greg Valliere from AGF Investments told me.
The reason is as follows: Several provisions in the 2017 Tax Reduction and Employment Act will expire next year, reducing the corporate tax rate from 35% to 21% and lowering the personal tax rate.
The budget proposal issued by the US government earlier this year called for a minimum tax rate of 25% for the richest Americans and a maximum income tax rate of 39.6% for those earning more than $400000 a year.
For businesses, President Biden has proposed raising the corporate tax rate to 28%, while a Republican victory could lower the tax rate to 15%.
The enthusiasm for tax cuts drove the stock market up in 2017, and Wall Street believes that Trump’s re-election as president will make these tax cuts more likely to be extended.
However, as we have seen in the market trend this week, professionals warn that this may not necessarily be a home run for investors.
Keith Lerner from Truist told me that extending tax cuts may not necessarily be good news for the market, emphasizing the importance of bond retail investors when assessing the risk of increased debt.
The bond market is always likely to have a negative view of candidates’ potential actions to lower taxes, extend current policies, or increase spending, “Lerner said.
For those preparing investment strategies, UBS Chief Investment Officer Solita Maselli pointed out that the enthusiasm brought by reducing taxes and relaxing regulations may weaken due to trade issues.
As a result, “interest rates and the US dollar may initially rise,” Marcelli wrote in a report to clients
But please remember, it’s still too early and the market may be too eager to assume that a Republican victory will guarantee tax cuts.
Valier believes that as more and more Republican lawmakers worry about worsening fiscal conditions, both parties are “hesitant to extend tax cuts”.
The Congressional Budget Office (CBO) estimates that extending the Tax Cuts and Jobs Act will increase the deficit by $4.6 trillion over the next decade, which is $1.1 trillion more than previous estimates. At present, the total federal debt of the United States exceeds $34 trillion, and it is expected that the government will spend nearly $900 billion on interest payments by 2024.
