Weekly Bot Brief Newsletter on Robotics 4/23/2021

                            "There is no force on earth more powerful than an idea whose time has come."         Victor Hugo

Bots in The News:

The Bot Index eeked out a small improvement over the broader market’s slight decline of 13 basis points last week. The bots gained just under one-half percent even though the index held more losers than gainers for the weekly performance. Good earnings reports buoyed the two largest gainers within the bots. NIO Ltd. was the standout performer for the week with an increase of 13.83%. Set to report for its first quarter results on April 29^th, the consensus from Wall Street is for the company to lose only 37 cents per share on revenues of $5.21 billion. If those estimates prove accurate, the company’s earnings would have increased 43.9% over last year and revenues would have gained 116.87%.

Also reporting earnings was Intuitive Surgical whose stock shot up 7.75%. The company’s earnings and revenues each exceeded analysts’ expectations. The earnings per share rose to $3.52, niftily beating the $2.64 expected by Wall Street, while revenues rose to $1.29 billion which was 18% above last year and almost two hundred million above consensuses.

3D Systems and Textron both shed some of their weakness over the past few weeks to jump 4% and 3.23% respectively.

The poorest performance came primarily from the Japanese stocks within the index. Yaskawa Electric led the decliners with a 5.37% retracement while Fanuc Corp. fell 4.89% and fellow Japanese company Cyberdyne slid almost 4%. NVIDIA Corp.  was the weakest domestic name as it dropped 4% as the company faces some British anti-trust concerns over its takeover of chip maker ARM.

Economic Singularity: Technology and labor collide:

In the most recent American Economic Journal, a Yale professor – William Nordhaus laid out his theory regarding the impact of rapid technological advances on the economy. While other recent articles have downgraded the prospects for worldwide growth due to demographic trends, declines in fundamental inventions and a general lack of business dynamism, Mr. Nordhaus, however, takes a more sanguine belief that “rapid growth in information technology and artificial intelligence will cross some boundary (Singularity), after which economic growth will rise rapidly as an ever-increasing pace of improvements cascade through the economy.” With the speed of supercomputers growing at a rate of 63% per year over the 2009–2019-time frame, computers will reach that boundary of Singularity where ‘humans become economically superfluous in the sense that their relative performance is negligible. Humans would be the equivalent of oxen as compared to supertankers. Super intelligent computers are the last invention humans would make.”

Mr. Nordhaus outlined the three stages which would lead to Singularity. The first is the increasingly rapid and deep storage and manipulation of data. The second phase is computerized control and production whereby computers take orders from humans but become more autonomous in their appointed tasks. The final stage is computerized innovation which is the ‘last frontier’ of intelligent machinery which can produce everything that humans need and can design new and improved processes in the production cycle.

This theory leads to the conundrum which we have addressed in past commentaries. At what point can the population afford to purchase the production of robotically produced goods and services if all labor becomes ‘autonomously mechanized’? Mr. Nordhaus does address this challenge with, “we thus would see the euthanasia of the laboring classes in the sense that all of national income eventually goes to the owners of capital. Workers would be well-paid but would control a vanishing part of national output. However, as long as corporations own most of the capital, and people or human institutions own corporations, capital income will indirectly flow through to humans.”

Mr. Nordhaus leaves us with a more positive outlook in that “fortunately the euthanasia of the laboring classes is far off and will flash warning signals so that, if it does occur, humans will have time to contemplate the social structures of such an era.”

Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association, Member IEEE.

The Bot Brief is a weekly newsletter designed for economists, investment specialists, journalists, and academicians. It receives no remuneration from any companies that may from time to time be featured in the brief and its commentaries, analysis, opinions, and research represent the subjective views of Balcones Investment Research, LLC. Due to the complex and rapidly changing nature of the subject matter, the company makes no assurances as to the absolute accuracy of material presented.