Weekly Bot Brief Newsletter on Robotics 7/17/2020

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

Bots in The News:

The Bot Index ended the week up 1.922%, culminating 5 straight weeks of superior performance to the S & P 500. Good economic news in manufacturing and housing stimulated the markets, allowing the Bot Index to set another all-time high to the 214.30 level.

Almost one third of the components of the index gained in excess of 5%, with the greatest increase coming from the Japanese firm Cyberdyne who rose 14.73%. The low priced stock’s increase came on low volume so trading did not play a factor in the gain and there was no actionable news to account for the jump.

The second-best performer – Intuitive Surgical rose, not because of something it did, but was something that impacted its primary competitors. Goldman Sachs reported that ISRG rival – Johnson and Johnson was experiencing a ‘major delay’ in its robot surgery program. Together with an FDA mandate requiring more stringent regulations regarding future robotic surgical procedures which was taken to inhibit future competition the stock bounced 13% for the week.

The Federal Reserve reported that industrial production climbed 5.4% in June compared with 1.4% in May. The consensus estimate was for an increase of 4.6%. In addition, Federal Reserve governor Lael Brainard called for sustained large-scale asset purchases to help the economy recover. This resurgence in industrial statistics helped Rockwell (+6.82%), Textron (+7.66%) and Teledyne (+10.11%) to bounce during the week.

Other gainers during the week included:

         Lockheed Martin    5.91%

          Northrup Grumman         5.08%

          Lincoln Electric      5.96%

          Faro Tech              11.79%

          Accuray Inc.           5.80%

It was bound to happen – shares of NIO Inc. were downgraded by Goldman Sachs following the company’s spectacular July move, dropping the stock almost 26%. In sympathy with NIO, Tesla fell 2.84%.

Several of the Japanese names slid during the week, with Yaskawa Electric leading the decliners with a 5.27% drop.

Amazon’s anticipated year-over-year expected earnings decline led investors to pull back on the stock, leading to a 5.27% retracement.

Are You Alive Out There Mr. AI:

Several years ago we were invited by the Cato Institute to participate in a debate with the editor of The New Atlantic regarding the impact of robotics on our future. One of the audience became quite upset with the notion that robots could become more like humans than this person wished to believe. With that backdrop we just happened upon a really interesting article in Mind Matters News, entitled Could Super Artificial Intelligence Be, In Some Sense, Alive. The feature centered on the musings of philosopher Borna Jasenjak of the Luxembourg School of Business. In his book Guide to Deep Learning Basics he poses the question of whether artificial intelligent ‘beings’ could some day be considered alive. In the future it is likely that AI robots could become so superior to human beings that they could continue to evolve to a point where their functions, logic, reasoning and reproductive capabilities may mirror living entities. This concept leads to the need for serious philosophical debate as to the definition of life….and death.

That long-ago debate at Cato ended with no determination of whether robots could ever develop a ‘soul’. That one nebulous characteristic seemed to be the basis of how to distinguish man versus machine. The enclosed cartoon may be a hint as to how this debate may be concluded at long last:

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 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.