U.S. stocks end strong amid expectations of policy changes despite concerns over economic contraction

The U.S. stock market started lower on anxiety over the economy, reflecting sluggish retail sales in the U.K. following a contraction in industrial production. However, as interest rates on government bonds fell, reflecting related concerns, they succeeded in shifting upward around individual stocks. In particular, the energy sector led the rise due to soaring international oil prices. Of course, concerns over the still-running economy are a burden on investor sentiment, limiting the rise. However, despite concerns about the economy, investor sentiment was good, so the Russell 2000 index, a small and medium-sized index, rose 1.35% (Dow +0.01%, Nasdaq +0.08%, S&P 500 +0.13%, Russell 2000 +1.35%, Philadelphia Semiconductor Index +0.66%)

Variables: Economic contraction and U.S.-China conflict

The previous day, U.S. industrial production fell 0.6% month-on-month, with most items shrinking, although there were some impacts from the auto strike. It shows that real indicators are slowing down following the recent 0.1% decline in retail sales. In addition, the slowdown in consumption is in full swing, with retailers mentioning a slump in the year-end shopping season in their earnings reports.

If consumption, which led to the U.S. economy in the first half of last year, slows down, the U.S. economy will inevitably shrink. Meanwhile, concerns over a contraction in the European economy continued, with retail sales in the UK falling 0.3% month-on-month. As the possibility of such a slowdown was highlighted, market participants began to reflect the possibility of the Fed’s rate cut in prices. CMEFEDWATCH expects to proceed quickly, with the probability of a rate cut at 62% at the FOMC in May 2024, with the Treasury rate falling

Meanwhile, Federal Reserve Bank of San Francisco Governor Daily San Francisco announced that he was not yet sure of progressing to 2% inflation. Bank of Chicago Governor Goolsbee also expressed concern that inflation is improving, but it is still very high. Boston Federal Reserve Governor Susan Collins also noted that inflation is easing but will not overreact because the data is uneven. In general, the Fed is still more inclined to wait and see, suggesting that it will not overreact, reducing interest rates or shifting short-term prices upward

In the meantime, the impact of Alibaba’s announcement (-1.91%) that the U.S. sanctions against China are affecting business operations following the previous day continues. On top of that, AMAT (-4.02%) plunged more than 8% at one point after news of the Justice Ministry’s investigation into delivery of Chinese semiconductor chip maker SMIC was reported despite the good earnings announcement. The U.S. Justice Department’s investigation into AMAT following Alibaba’s impact the previous day shows that the U.S.-China conflict issue is affecting the stock group.

However, as communication is underway through the U.S.-China summit, and news that U.S.-China commercial working groups will meet in the first quarter of 2024 spread, the fall of related stocks is either reduced or reversed. In the end, the U.S.-China friction continues, but signs of easing are being carried out by the working group, so the possibility of a series of adverse effects on the stock group is limited.

• Featured stocks: Retailers, energy sector strong

Discount retailer Ross Store (+7.22%) rose on better-than-expected earnings, same-store sales growth and new store growth. Of course, it was mentioned that same-store sales would decrease in the future due to the uncertain macro environment, but the impact was limited. Clothing company Gap (+30.58%) surged on mutual earnings and guidance. AMAT (-4.02%) fell on news of the Justice Department’s investigation despite good performance. Expedia (+5.05%), an online travel company, rose on the back of Evercore’s upward revision of its investment opinion and target price. Ford (+1.08%) is strong on the news that it has completed negotiations with the U.S. auto union. GM (+2.00%) also rose.

International oil prices, which plunged more than 20% from their high point due to concerns over slowing demand due to the recent economic contraction, surged more than 4% today as OPEC’s possibility of further production cuts increased. As a result, energy-related stocks such as Exxon Mobil (+2.44%), Chevron (+1.90%) and ConocoPhillips (+2.32%) rose. ChargePoint (-35.46%), an electric vehicle charging company, plunged on news that its upcoming sales would be weak. Blink charging (-7.57%) and Fisker (-13.52%) also fell. Tesla (+0.30%) also plunged nearly 4% due to related news, but successfully turned upward due to the influx of buying.

Following the previous day, Chinese tech companies such as Zindong Dotcom (-1.67%) and Baidu (-1.09%) continued to decline due to Alibaba’s announcement that U.S. sanctions against China are affecting business operations. But Xiaofeng (+3.45%) and Lioto (+4.97%) rose after announcing new EV models at an auto conference in Guangzhou. In addition, the fact that Riotto is included in the Hang Seng Index on December 4th also shows a favorable impact.
Elon Musk made a decisive contribution to the founding of openAI. Not only did he invest, but he also brought Ilya Sutzkeber to openAI. Ilya Sutzkeber and her teacher Jeffrey Hinton can be seen as the history of deep learning itself.
Ilya Sutzkeber believes in the emergence of universal artificial intelligence (AGI). Since I truly believe in the tremendous potential of AI, I know better than anyone how dangerous it is potentially. Therefore, it has constantly warned about the safety of AI.

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It is revealed that he is the leading figure in the coup to oust Sam Altman, and the message he sent right after the coup is as follows.
“Avoid activating AI or AGI that harms humanity or over-focuses power, and conduct the research necessary to make AGI safe.”
Elon Musk Is On The Same Line As Ilya Sutskever. It is more sincere than anyone else about artificial intelligence, but it constantly warns of potential dangers. The show is not necessarily the only one that was signed to suspend AI development with Steve Wozniak.

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Elon offered to take over as CEO himself in 2018 because he thought openAI was behind Google.
But others objected and left Elon. Because investments were cut off after Elon left, Sam Altman set up a for-profit subsidiary called openAILP to attract investments from Microsoft.
Musk wanted to make openAI the opposite of Google DeepMind. If Google DeepMind is basically a for-profit company and closed source, I thought it should be non-profit and open source. Google DeepMind and the newly established openAI have described it as a battle between ants and elephants.

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Elon Musk’s emphasis on avoiding the use of AI or AGI, which can harm humanity or over-focus power, is the influence of Elon Musk.
The truth of the coup is still unknown. However, the atmosphere of openAI’s company ironically changes a little with Elon Musk’s departure.
Sam Altman had to attract investment as CEO and expand his services. However, there must have been an atmosphere of opposition to this. Ilya Sutzkeber was the head of this opposition.
With Sam Altman ousted, wouldn’t openAI’s relentless commercial expansion be a bit of a pacemaker?

The following is a description of the person involved in the coup.