The Bot Brief

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

- Victor Hugo

Bots in The News:

World geopolitical events dominated the market in last week’s trading. However, issues associated with the domestic economy also contributed to the 2.39% decline in the S & P 500 and the 3.43% slide in the Bot Index. Issues involving the ‘choosing of sides’ between China, Iran, N. Korea, and Russia versus the Western nations’ support for Israel and the Ukraine further confounded investors. It was just such alliances that led to World War 1.

In the U.S., economic conditions of the budget deficit, persistent inflation, high and rising interest rates, the GOP’s failure to appoint a Speaker of the House continued to weigh on investor sentiment. A recent report from our friend Michael Lewis of Free Market Inc. pointed out the Fed’s Quantitative Tightening of monthly reducing the Fed’s balance sheet by $69 billion in Treasuries and $35 billion in mortgage-backed securities. With only three tools at the disposal of the Fed’s monetary policy, this avenue will take approximately six years to move to a ‘normalized’ balance sheet. That leaves only the Fed Funds rate and reserve requirements in the Fed’s decision-making arsenal.

As such, there were only three companies within the Bot Index that produced positive results. The best performance was produced as 3D System’s turned around its year-long slide. The company developed and has utilized in a Swiss surgery, it custom cranial implant for use in cranioplasty repair. The 3D printed device can be created on site to custom manufacture skull replacement parts. The stock rose 14.73%.

Again, due to international conflicts, the defense stocks within the Index performed comparatively well with AeroVironment and Lockheed the only gainers. AeroVironment rose 4.79% as Cathy Wood’s Arc Investment placed the company as one of her ‘best stocks to buy and hold for the next 15 years.’

The two EV stocks in the Index were the only double-digit decliners. Tesla fell 15.56% and NIO Inc. dropped 10.51%. In Elon Musk’s recent investor call he noted inflation and interest rates will likely produce headwinds for the company. In a quote he stipulated, “I’m not saying things will be bad, I’m just saying they might be…..macroeconomic conditions are stormy.”

NVIDIA Corp. shareholders responded to the U.S. Government’s restrictions on advanced microchip sales to China. Consequently, analysts at Citicorp and Morgan Stanley reduced their stock price targets by $55 and $30 respectively.

Zachs noted that it expects ABBVia Corp’s third quarter earnings are expected to decline as its Humira pharmaceutical goes off patent.

Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association (now A3 Automation), 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 view 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 the material presented.