Weekly Bot Brief Newsletter on Robotics 6/28/2019

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

Bot Index Highlights:

For the second week in a row, the Bot Index outperformed the broader markets. Seven stocks, whose fortunes exceeded three percent for the week, contributed to the .87% gain in the Index. That positive was in spite of the negative turn in the S & P 500 during period. The best performer was the chip-maker NVIDIA who shares rose 8.22%. The stock was propelled by hopes of trade agreements that could ensue following the G-20 talks. Secondarily, a recommendation by the research firm Wedbush, who initiated coverage with an outperform rating and a $184 target, helped shareholders who have witnessed the decline of the stock over the past months. The stock closed Friday at $164. Shares of Offshore International gained 6.64% following a Zach’s report entitled, “3 Stocks to Buy as Oil Service Firms Regain Pricing Power.” Finally, the Japanese companies Yaskawa Electric and Cyberdyne Inc. each rose 6.61% and 3.25% respectively, spurred on by optimism regarding international trade talks.

On the negative front, AeroVironment Inc. declined 11.28% following the news that it experienced a decline in 4^th quarter earnings. The drone manufacturer reported per share earnings of $.24 versus the prior year’s $.70. The decline was based upon a whopping 23% decline in revenues. Joining AeroVironment in the loser’s column were Google (-3.65%) and NIO Inc. (-3.41%)

Bots In The News:

The June 2019 issue of The American Economic Review Insights included a brief by Francesco Caselli and Alan Manning entitled Robot Arithmetic: New Technology and Wages. The feature was enlightening in its arguments that ‘new technology is unlikely to cause wages for all workers to fall and will cause average wages to rise if the prices of investment goods fall relative to consumer goods.’ The authors, from the London School of Economics, debunked the fears of robotics creating job losses and expounded upon the fact that labor will no longer be a fixed factor based upon demographics. Instead, global GDP will be an ‘economy of abundance because there is no longer a natural limit to the level of production caused by the existence of labor as a fixed factor.’

One of the founders of the investment management firm Blackstone gave $190 million to Oxford University to fund research in Artificial Intelligence. Stephen Schwarzman noted, in his donation, that governments are totally unprepared to deal with the issues surrounding AI’s impact upon our economy and mankind.

The United States Navy seems to have a special interest in the use of robotics in its defense activities. The creation of a special unit entitled, Heterogeneous Collaborative Unmanned Systems (HICUS) is the latest in the use of a combination of aerial and underwater drones to provide surveillance and attack activities. The Navy has indicated it would present a week-long demonstration of the unit’s capabilities later in 2019.

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

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.