November 16: This Week's Thematic Reads
Our stance has always been that thematic investing reflects the shifting landscapes in the world around us. With that in mind, we are once again sharing several "ripped from the headlines" signals for our targeted exposure, themes, and what they support.
More of these signals that support the themes and strategies at Tematica Research can be found here. I also use insights from these and other signals to manage TheStreet Pro Portfolio.
Aging of the Population
“As Texas’ population continues to age, there is a growing concern about a shortage of board-certified geriatricians available to provide specialized care. The aging baby boomer generation will double the number of people ages 65 and older?between 2000 and 2030. This will result in older Americans making up 21% of the population, according to U.S. census data.” Read more here
Artificial Intelligence?
“Salesforce Inc. plans to hire more than 1,000 workers to sell its new generative AI agent product. The hiring surge is aimed at capitalizing on “amazing momentum” for the new artificial intelligence product, Chief Executive Marc Benioff said in a message. “Agentforce became available just two weeks ago and we’re already hearing incredible feedback from our customers.”?Read more here
"Budgets will shift to emerging AI-powered channels that embrace creative automation and conversational commerce as marketers begin to feel more optimistic about the coming year. Seventy-five percent of participants in a study from Smartly released today anticipate a budget increase to support change." Read more here
"The telecom industry has been facing pressure as traditional revenue sources from voice calls and text messages decline, with consumers increasingly turning to internet-based platforms. At the same time, infrastructure costs are rising as companies invest in upgrading networks to 5G technology. Gen AI is now presenting telcos with a unique opportunity to develop new products and services while reimagining traditional telecom offerings.?McKinsey & Company has said that GenAI adoption could "revitalize profitability for telcos" by enhancing profit margins." Read more here
Artificial Intelligence, Digital Infrastructure
“Server spending in Europe is projected to increase by 25% in 2024, driven by demand for AI-optimised hardware. This growth rate will moderate to 11% in 2025. Technology providers have increased their server spending by 46% in 2024, indicating a substantial build-out of AI infrastructure capacity.” Read more here
Cash-Strapped Consumer?
“There is pent-up demand for projects… Our customers tell us that their lives are changing. Their families are growing. They’re upsizing, they’re downsizing. They need to move for a job. There is demand for remodeling, and they are putting it on hold until they see a more favorable financing environment. And so the demand is there, the question is, when it’s unlocked.” Home Depot customers have continued to put off projects, even though they’re in good financial shape, he said. About 90% of the company’s do-it-yourself customers own their homes.”?Read more here
“Retail sales made during China’s annual Singles’ Day shopping event reportedly slowed again this year amid the country’s economic challenges and consumer skepticism about retailers’ promotions. While eCommerce platforms used to see growth in the double digits during Singles’ Day, more recent estimates put those figures in the low single digits… “?Read more here
CHIPs Act
“Late Tuesday, a person familiar with Biden administration plans told?Barron’s?that the Commerce Department will award all of the $39 billion before the end of Biden’s term. The $36 billion in announced Chips Act awards were just letters of intent. Next come long-form term sheets. Finally, both sides negotiate and sign legally binding agreements. Actual disbursement will be pegged to construction milestones over the coming years.” Read more here
Cybersecurity, Data Privacy
“The FBI is alerting companies that cybercriminals are using compromised U.S. and foreign government email addresses to send fraudulent emergency data requests.?By sending these fraudulent requests to U.S.-based companies, the hackers are looking to gain access to the companies’ holdings of their customers’ personally identifying information (PII), the FBI said in a Nov. 4 Private Industry Notification.”?Read more here
"U.S. and Canadian banks reported a tenfold surge in digital scams this year as criminals flock to techniques that rely on duping customers into sending them money, according to cybersecurity firm BioCatch." Read more here
Energy Pain Point
“The German industrial conglomerate has been among the early winners in a data-center boom driven by artificial intelligence, which powered growth in orders, revenue and profit at Siemens’s key smart infrastructure segment. The division makes electrical and grid equipment that are in high demand amid a rush to build more infrastructure to support the AI era.” Read more here
Homebuilding & Materials
“Homebuyers are confronting borrowing costs that are markedly higher than a month ago, but some shoppers are forging ahead. In the four weeks ended Nov. 10, contracts to buy previously owned homes were up 4.7% from a year earlier, according to Redfin Corp.?data. And a measure of mortgage applications?rose?for the first time in seven weeks, according to the Mortgage Bankers Association.” Read more here
Luxury Buying Boom
"The personal luxury goods market looks set to face its first slowdown since the Global Financial Crisis this year, as macroeconomic uncertainty and a pronounced slowdown in China weigh on consumer spending, according to the Bain & Company’s annual luxury report." Read more here
"Burberry, like other luxury goods companies, has been hit by consumers' fading appetite for luxury in China and elsewhere, but it has lagged in the industry-wide slowdown... Schulman told reporters Burberry would add more lower-priced "entry-level" products to its range as part of a pricing shift. Burberry has the most pricing power in outerwear, while it has less in handbags, he said." Read more here
Nuclear Energy & Uranium
"The Biden-Harris administration on Tuesday laid out a road map to at least triple U.S. nuclear power generation capacity by 2050 by deploying 200 GW of net new capacity from newly constructed reactors, restarts of reactors idled for economic reasons and power uprates of generating equipment at existing nuclear power plants. The detailed plan envisions 35 GW of new nuclear capacity operating or under construction in the U.S. by 2035 as the industry ramps to a sustained deployment pace of 15 GW per year by 2040." Read more here
Safety & Security
“China on Tuesday debuted its latest model of stealth fighter jet and foreshadowed an ambitious pipeline of advanced drones, as Beijing displayed its determination to match American military might by investing heavily in the latest tech and forging ever-closer bonds with partners like Russia.”?Read more here
“In September, German Defense Minister Boris Pistorius proposed pushing the amount of spending dedicated to the military from 2% of gross domestic product to between 3 and 3.5%. In a new poll released Monday by the Koerber-Stiftung Institute, 50% of respondents supported Pistorius’ idea, while a further 15% said even more should be spent on German defense.” Read more here