Could ChatGPT Be Your Next Financial Advisor?

Good morning.?Today is National Ex-Spouse Day, the day you reflect on the positive moments you shared with your ex...your welcome for reminding you. Maybe someday you'll make it right, or maybe someday they'll make it right... whose fault was it really?

— Robert Baggetta

Stock data as of market close, cryptocurrency data as of 4:25 ET.?

Markets:?US stocks rallied on Thursday after weaker-than-expected jobs and factory-gate inflation data, leading Asian equity markets to set for gains. Futures for equity benchmarks in Australia, Japan, and Hong Kong signal the markets will open higher. Asian currencies were little changed in early trading, while the dollar fell against all its Group-of-10 peers for the second day.

Eye-Eye Captain:?Treasuries climbed early but gave up gains as yields ticked higher in the afternoon session amid improved risk sentiment. The policy-sensitive two-year yield, however, stayed within a narrow range of around 3.97%. Amazon.com Inc. gained the most in two months after announcing new technology aimed at cloud customers and a marketplace for AI tools. Banks, including JPMorgan Chase & Co., Wells Fargo & Co., and Citigroup Inc., will kick off the earnings season on Friday.

ECONOMICS and WORLD

Decisions Decisions...

In March, the Federal Reserve's economists expected a recession later this year due to "subdued" growth and "some softening" in the labor market. The recent banking instability, along with the second and third largest bank failures in US history, has further exacerbated the economists' pessimism.

Despite this, Goldman Sachs' chief economist believes that the US economy can avoid a recession with just a 35% chance of a recession over the next 12 months. He argues that the latest data confirms that inflation is still slowing and that there has been "particularly encouraging" news from the labor market recently. As a result, Goldman Sachs forecasts US GDP growth will fall to just 1.3% in 2023.

Who's Benefitting

The possibility of lower borrowing costs pushed U.S. equities up, as the Dow, S&P 500, and Nasdaq rose by more than 1% with the Nasdaq adding 2%. This marks the first time all three have risen on the same day in a week. Tech stocks, including Amazon, Tesla, Cisco Systems, and Salesforce, benefited from this prospect of lower interest rates, and their shares were higher.

Meanwhile, solar power companies, such as SolarEdge Technologies and Enphase Energy, soared after receiving positive coverage from HSBC and Deutsche Bank. Finally, DISH Network shares bounced back after hitting a 24-year low, thanks to an analyst price cut the previous day. Predictions for future stock movements will depend on how the Federal Reserve acts to address inflation, and investors will need to keep a close eye on economic data and Fed policy changes.

Cash App Murderer: A tech consultant, Nima Momeni, has been arrested and charged with the murder of Cash App founder Bob Lee. The two men knew each other, but authorities have not revealed their connection or a possible motive. Lee was stabbed to death in San Francisco, and Momeni was taken into custody in a suburb of the city. Friends and colleagues of Lee have mourned the loss of a brilliant and generous man, and Momeni is expected to be arraigned on Friday. The arrest has sparked discussion about crime in San Francisco, with prominent tech leaders and officials sharing differing opinions.

Crypto & AI

Crypto Markets

Yesterday's rally in Ethereum was attributed to the successful rollout of another upgrade to the Ethereum blockchain, and crypto-exposed stocks, including Coinbase, Block, and MicroStrategy, were all higher. The March producer price index showed some moderation in inflation pressures, which investors saw as a sign that the Federal Reserve may end its rate-hiking campaign sooner than expected. Jobless claims rose last week, but the labor market remains tight.

Bitcoin miners had a strong week, with several posting double-digit gains on Thursday as Bitcoin rose by 2% to $30,500. Marathon Digital, Hut 8 Mining, Stronghold Digital, Iris Energy, and Bit Digital all saw significant gains for the day and week. Despite these gains, stocks for these companies remain sharply lower than a year ago, likely due to higher energy prices and a Bitcoin price that's still over 50% below its all-time high. However, Bitcoin miners are benefiting from the idea that both inflation and the job market are cooling, potentially allowing the US Federal Reserve to pause or even reverse its interest rate hikes.

The recent release of the producer price index for March and initial jobless claims for the week ending April 8 support this idea. Currently, short-term interest rate markets suggest a 60% chance of a 25-basis point rate hike at the Fed's next meeting on May 2-3.

ChatGPT > Your Financial Advisor

Alejandro Lopez-Lira, an assistant professor at the University of Florida's Warrington College of Business, believes that ChatGPT could be used to help investors trade stocks. Lopez-Lira tested ChatGPT's ability to predict stock market returns by asking it to assess whether a news headline was good, bad, or irrelevant to a company's stock. He thinks that investment professionals will soon begin to incorporate this kind of artificial intelligence tool into their analysis, making markets more efficient. Smaller stocks offer more predictability, according to Lopez-Lira, as larger stocks are priced more accurately, making it harder to trade on news.

RUSSIA-UKRAINE

A pro-Kremlin blogger has shared a video online that purportedly shows a Ukrainian soldier being beheaded by Russian soldiers. The footage emerged shortly after another video showing the bodies of two decapitated Ukrainian soldiers was posted on pro-Russian social media. The Ukrainian government has expressed outrage and launched an investigation into the video. International reactions have also been strong, with calls for those responsible to be held accountable for their actions. This is not the first disturbing video to emerge during the ongoing conflict between Ukraine and Russia, with previous videos showing execution and castration.

How Much Longer

Recently leaked US documents have revealed that Russia's security apparatus had disagreements over the war in Ukraine, with the defence ministry accused of undercounting casualties. The files indicate that the FSB security service claimed that Russian National Guard, Wagner mercenaries, and others were not being counted.

However, Russia has warned that the leaks may be fake and deliberately dumped by the US. The leaked documents corroborate what was already widely known about Russia's reluctance to publicize the numbers of dead and wounded. The leaks suggest that President Vladimir Putin may have been shielded from the true extent of Russia's losses on the battlefield.

Banks, Uranium and EVs

CHIPS

Royal Bank of Canada (RY.TO, $132.09):?Royal Bank of Canada has become the largest lender and financial service provider to the fossil fuel industry, overtaking JPMorgan Chase, according to a new report by climate activist groups. The report states that in 2022, 60 of the world's largest banks provided a total of $673bn in loans and financial services to the sector, which is a 19% decrease from the previous year. RBC provided the most financing last year, at $42.1bn. The shakeup is largely due to JPMorgan's 41.7% decline in loans and services last year, while RBC increased its business with the sector by 4.2%.

Cameco Corporation (CCO.TO, $35.19) is currently trading at similar levels as its fair value estimate, according to a two-stage Discounted Cash Flow (DCF) model analysis. The model forecasts future cash flows, discounts them back to today's value, and calculates a fair value estimate. Analysts have set a price target of CA$ 48.28, indicating a potential 23% increase from the estimated fair value. The attractiveness of Cameco has caught various investors' attention as Uranium energy has gained popularity among other energy usage materials.

Tesla, Inc. (TSLA, $185.90):?President Biden’s proposed new rules on tailpipe emissions could limit the pollution cars are allowed to emit for model years 2027 through 2032. The new rules could result in automakers being forced to build more electric vehicles (EVs) and fewer gasoline-powered ones. Tesla, the undisputed leader in EV sales in the US, would be the single-biggest beneficiary of the EPA’s new effort to slash auto-related emissions. The EPA estimates that if the rules go into effect as proposed, EVs as a portion of new-car sales would rise from less than 6% now to around 67% by 2032. However, automakers may challenge the proposal, and the final rule could be weaker than the proposal.

What Else Is Pulsin'

U.N. Says Somalia Faces Catastrophic Hunger as Climate Crisis Fuels Drought

Zelensky Condemns Video Appearing to Show Russian Soldier Beheading Ukrainian POW

Brazil’s Lula Will Ask China’s Xi to Help Broker Peace in Ukraine; U.S. Sees No Peace Talks in 2023

Juul Reaches $462 Million Settlement with New York, California, Massachusetts and Others

Want to sue your doctor? You'll be up against a powerful group with billions of dollars;?

Renters being asked for SIN, driver's licence and other sensitive information by some landlords

Innovation / Environment / Positives

New self-built hybrid rocket could break world altitude record

Rare earth elements recovered from coal

Climate tech boosted by $7.5bn investments in space tech

How important is AI in construction?

THANKS FOR READING THE ECONOMIC PULSE. SUBSCRIBE FOR MORE DETAILS ON THE ECONOMY AND NEWS AROUND THE GLOBE