Market scorecard
US markets sold off yesterday after another round of solid economic data, which probably means further interest rate hikes by the Fed. ADP Research Institute data showed that US companies added the most jobs in more than a year in June, meaning inflation could potentially be a threat as the labour market continues with its resilience. All eleven sectors of the S&P 500 closed in the red, its worst performance since May.
In company news, Samsung (KS:005930) dropped 2.2% after reporting its biggest decline in quarterly revenue since at least 2009. Elsewhere, Japanese drug maker Eisai was among the biggest losers. There are concerns over the adoption of its Alzheimer's drug, even after the medication received full approval from the FDA.
At the end of the day, the JSE All-share closed down 2.37%, the S&P 500 fell 0.79%, and the Nasdaq was 0.82% lower. Meh
One thing, from Paul
This Friday's advice: travel. Going to faraway countries is not easy. Long-distance travel is tiring, uncomfortable and expensive. You arrive in places where you don't speak the language, understand the money or know the customs.
Yet, travel is hugely rewarding. It's how we make memories with family and friends that will last a lifetime. We see how others live, and what they think. We explore and learn. We gain a sense of perspective on our lives at home.
Writer Henry Miller said "travel is about stumbling across a new way of looking at things". It's worth every cent. There's a big, complex, and beautiful world out there.
Byron's beats
Inflection AI is a company that has created a chatbot called Pi. According to their website, "Pi is designed to be a kind and supportive companion offering text and voice conversations, friendly advice and concise information in a natural flowing style". They claim to have developed one of the most sophisticated large language models in the market.
The company has just raised $1.3 billion in a funding round from the likes of Microsoft (NASDAQ:MSFT), Bill Gates, Reid Hoffman and Nvidia (NASDAQ:NVDA).
What makes it even more interesting is that Inflection AI plans on building the largest AI cluster in the world, compromising 22 000 Nvidia H100 Tensor Core GPUs. So Nvidia are giving these guys money to buy Nvidia chips. That's quite funny.
The AI boom is in full flow and it is certainly fun to watch, especially if you own Nvidia shares.
Michael's musings
Recently, 19 Chinese researchers published a paper showing that AI created a CPU in only five hours. For perspective, it normally takes Intel (NASDAQ:INTC) about four years to develop a new CPU. The time was saved during the manual programming and verification phase, where the AI can almost instantly see if a programming design will work or not.
It is worth noting that the AI only designed a very basic CPU, the equivalent of something with technology going back to 1991. I think that is beside the point though. The researchers proved that AI can be used to improve the design process of these very complicated chips. From here, we will figure out how to use the technology to create usable computer chips.
AI is great for quickly testing complicated systems, like computer chip designs or medicine compositions. As Byron wrote about last week, AI was used to create a new drug currently in phase two trials. The trick now is to design AI systems that specialise in these areas.
Some think AI is just a nice gimmick. Others think it is equivalent in significance to the founding of the internet. I lean towards the latter, maybe not as big as the internet, but not far off.
Bright's banter
Diageo (LON:DGE) has officially ended its 15-year partnership with rapper and entrepreneur Sean "Diddy" Combs. The decision comes in the wake of a lawsuit filed by Diddy last month, accusing Diageo of racial discrimination.
According to Diddy's allegations, Diageo was guilty of under-promoting his liquor brands, specifically Croc and DeLeon, because they were perceived as "black brands" targeted at "urban" customers. Diageo, on the other hand, has vehemently denied these claims.
After assessing the situation, Diageo reached the conclusion that the damage to their relationship with Diddy was irreparable, leading to the termination of their long-standing collaboration.
This is certainly a significant development in the business world, considering the notable duration of their partnership. As the legal proceedings unfold, it remains to be seen how this incident will impact both parties involved and the wider industry.
Signing off
Asian markets fell across the board, causing the MSCI Asia-Pacific index to slide three days in a row. Benchmarks in Hong Kong, Japan, mainland China and South Korea dropped on what's been a long and grinding risk-off week. There have also been no signs of any stimulus decision by the Chinese government to help with economic recovery.
US equity futures extended on losses seen yesterday. The Rand has slipped to R19.08 to the US Dollar.
Good luck to the Mighty Bokke tomorrow.