David Fuller and Eoin Treacy's Comment of the Day
Category - Technology

    Chegg Sinks 48% as ChatGPT Threatens Growth Outlook

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    Chegg Inc. tumbles as much as 48%, its biggest drop since November 2021, after the online educational services company warned that ChatGPT was threatening growth of its homework-help services, making it one of the first companies to highlight generative AI’s negative impact on business. Jefferies cut the recommendation on the stock to hold from buy, saying the AI overhang is starting to impact fundamentals. 

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    Email of the day on combustion risk from EVs

    CATL Says New Super Strong Battery May Power Electric Flight

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    China’s Contemporary Amperex Technology Co. Ltd., known as CATL, unveiled its strongest battery to date Wednesday, saying that it could one day be used to power electric aircraft.  

    The battery, which loads more power into a smaller package, has an energy density of 500 watt-hours per kilogram, CATL’s Chief Scientist Wu Kai said during a presentation at the Shanghai auto show. CATL’s most recent battery, called Qilin, has an energy density of 255 Wh/kg and can power an electric vehicle for 1,000 kilometers (620 miles) on one charge. 

    The technology, which CATL calls a condensed state battery, is potentially a breakthrough that will help electrify sectors wed to fossil fuels because existing batteries are either too heavy or unsafe. Still, questions remain about the materials it will use, its cost and ultimate market impact.
     

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    Is FedNow a CBDC?

    This article from the CATO Institute may be of interest to subscribers. Here is a section: 

    What is FedNow?
    FedNow is an instant payments system—a sort of update to Fedwire and the Automated Clearinghouse (ACH). Individuals will not have direct access to FedNow, but they will have access to faster payments so long as their bank or credit union opts into the FedNow network. Although creating FedNow was not necessary to achieve faster payments, one big difference with FedNow will be that payments will no longer be held up on weekends, holidays, or after traditional business hours.
    FedNow is Not a CBDC
    Astute eyes will likely recognize that FedNow does vaguely resemble a wholesale CBDC. Where a wholesale CBDC would be restricted to financial institutions for use during interbank settlement, FedNow would also be restricted to financial institutions. The difference, however, lies in their design. Where a CBDC is a currency, FedNow is a payment rail. If we think of dollars and cents as water, then FedNow is the plumbing that gets those dollars and cents where they need to go. In contrast, a CBDC would involve replacing the water itself in this analogy.

    Under the current system, interbank settlement is performed on the Federal Reserve’s payment rails, thus ultimately affecting retail banking customers’ settlement times. It’s for this reason that Federal Reserve Governor Michelle Bowman said, “My expectation is that FedNow addresses the issues that some have raised about the need for a CBDC.” This statement should not be misunderstood to say that FedNow will take CBDCs off the table, but it does show that the Federal Reserve itself sees FedNow and CBDCs as distinctly different.

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    Buffett Praises BYD and TSMC After Selling Shares of Both Firms

    This article for Bloomberg may be of interest to subscribers. Here is a section: 

    Warren Buffett called electric-car maker BYD Company Ltd. “extraordinary” and said chip manufacturer Taiwan Semiconductor Manufacturing Co. is a “fabulous enterprise.” That hasn’t stopped him from selling shares of both firms.

    “We’ll find things to do with the money that I’ll feel better about,” the Berkshire Hathaway Inc. chairman and chief executive officer said of BYD in an interview with CNBC in Tokyo Wednesday. He said Berkshire wasn’t in a hurry to reduce that stake after recently trimming its holdings of BYD H shares to 10.9% from 11.13%, according to a filing this week.

    The billionaire investor took credit for Berkshire’s investment in TSMC amid speculation that one of his investing deputies picked the stock. He said the decision to reduce its stake in the business by 86% in the fourth quarter — which could have fetched $3.7 billion assuming the shares were sold at the average price over the period — resulted from concerns over geopolitical tensions between China and Taiwan, conditions he described as being outside of the company’s control.

    “I re-evaluated that part of it,” Buffett said. “I didn’t re-evaluate the business, the management, or anything of the sort.”

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    Bitcoin, Not Ether, Builds Crypto Market Dominance Ahead of Ethereum's Shanghai Upgrade

    This article from Coindesk may be of interest. Here is a section: 

    Ether's dominance rate remains stagnant between 19% and 20%. That compares with a rise to 21% from 14% in the weeks before a software upgrade last September known as the Merge. That technological overhaul replaced Ethereum's at-the-time energy-intensive proof-of-work mechanism of verifying transactions with a proof-of-stake system and set the stage for Shanghai. Staking involves depositing coins in the blockchain to boost the network's security and verify transactions in return for rewards.

    Investor caution in pricing ether ahead of Shanghai stems from several factors, including concerns tokens unlocked after the upgrade will flood the market and regulatory issues.

    "The Shanghai upgrade will unlock over 18 million ether staked since late 2020. The market is worried that the unlocking may bring about a sell-off, causing uncertainty in the market," Griffin Ardern, a volatility trader at crypto asset-management firm Blofin, told CoinDesk.

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    US Service Gauge Falls More Than Expected as Demand Moderates

    This article from Bloomberg may be of interest. Here is a section: 

    The group’s index of new orders at service providers dropped more than 10 points to a three-month low of 52.2. While still consistent with expansion, the scale of the drop suggests a significant slowing in the pace of bookings growth. The business activity measure, which mirrors the ISM’s factory production index, slipped to 55.4.

    “There has been a pullback in the rate of growth for the services sector, attributed mainly to a cooling off in the new orders growth rate, an employment environment that varies by industry and continued improvements in capacity and logistics,” Anthony Nieves, chair of the ISM Services Business Survey Committee, said in a statement.

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    Tesla Shares Drop After Price Cuts Barely Boost Deliveries

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    After Tesla cut prices of its top-selling Model Y by as much as 20% and discounted its most expensive vehicles by tens of thousands of dollars, Musk said in late January that orders were running at almost twice the rate of production. The figures reported Sunday indicate there was a slowdown later in the quarter, as the company ended up making almost 18,000 more cars than it sold.

    “Continued excess production over deliveries will keep the debate going on price elasticity versus general demand weakness,” Philippe Houchois, a Jefferies analyst with a buy rating on Tesla stock, said in a note.

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    Rivian Tops Tesla Gains In Premarket Trading: What's Powering EV Stock Higher?

    This newswire item may be of interest. Here is a section: 

    Kelley Blue Book sales data gathered from the state Registry of Motor vehicle showed registrations of 8,145 Rivian vehicles in the first quarter, analyst Chris Pierce said, citing information from Cox Auto’s first-quarter 2023 “Industry Insight Calls.” This compares to the consensus estimate of 7,167 vehicles, he added.

    The analyst also noted that first-quarter used vehicle data showed that fewer used Rivian vehicles were on sale relative to Lucid Motor Group (NASDAQ:LCID) and Ford Motor Co.’s (NYSE:F) Lightning EV pickup truck, which is a direct competition to Rivian’s R1T pickup truck.

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