The Bot Brief

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

- Victor Hugo

Bots in The News:

While the political world was focused on the indictment of former President Donald Trump, the stock market reacted to another lowering revision for the fourth quarter GDP. With the second reduction based upon weakening consumer spending, investors took the reduction in growth as a potential sign that the Fed may have soon room to decelerate its inflation fighting rate increases. Hence, the quarter ended with a week that noted a near 4% gain by the bots and a 3.48% increase in the broader index.

There were two companies whose stocks improved by double digits. NIO Inc. gained 15.87% as Chinese markets provided a tailwind despite NIO’s expectations of weak first quarter deliveries. Immersion Corp. also gained 11.78% as the second-best gainer for the week. The stock jumped on massively increased volume Friday that went from an average of 326,000 to 2,266,000 which indicates institutional interest in the low-priced stock.

Oceaneering International and Tesla joined the gainers with near 9% increases each for the week.

Of the thirty-company index, the Bot Index only held four stocks that were underwater. Google fell 1.94% as the announcement of weakening consumer spending impacted the company.

Just ‘Cause Somethin’ Ain’t Been Done, Don’t Mean It Can’t Be Did!  Shel Silverstein

On the heels of recent comments by Elon Musk regarding the rapidly rising dangers that AI presents, The Economist published an article entitled, ‘Where are all the robots?’. In the apparent contradiction, it should be noted that AI and mechanical robotics are not mutually exclusive. In fact, while they both represent advances in productivity through automation, their applications and markets are significantly different. The Economist article noted, ‘with two vacancies for every unemployed American, the highest rate on record…labour markets across the rich world are historically tight.’ The reasons for the irrationally sluggish growth in the use of mechanical robots hinges on their current lack of flexibility and legacy systems within the industrial and office world which are their primary markets.

The recently introduced AI ChatGPT and its progeny, however, have the consumer as their marketplace. This market provides anyone with a smart device the ability to develop creations from their ideas. So, while Musk’s concerns last year about robotics’ destruction of the job market has yet to be fulfilled, his concerns regarding AI may well be justified.

[As an aside to the above commentary, Balcones Investment Research has a theory regarding the extremely low labor participation rate (which is the reason for such a low unemployment rate). It has been long noted that the Baby Boom generation was likely to be involved in a $64 trillion wealth transfer. With covid’s million casualties, many of which were of the Baby Boomer’s advanced age, the inheritances by the Gen X and Millennials may very well have negated the occurrence of the financial strains of unemployment]

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 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 material presented