March 23: This Week's Thematic Reads
If you missed out on this week's signals, we've got you covered
Aging Population
“Across the globe, nearly every nation is experiencing population aging. The United Nations states that the percentage of the global population aged 65 and above is expected to rise from 10% in 2022 to 16% in 2050. People aged 60 and older also outnumbered children younger than five years in 2020. While this demographic shift has implications for the social and economic makeup, nations remain siloed in matters regarding population aging.” Read more here
“The growing portion of the population 65 and older is expected to place unique labor demands on health care compared with other parts of the economy… The health care sector is expected to add 2.1 million jobs through 2032, according to the Bureau of Labor Statistics — 45% of all job growth in the next decade, the analysis notes. Nurse practitioner employment is expected to see a growth rate of 45%, physician assistants by 27% and home health and personal care aides by 22%.” Read more here
“To meet the demand for direct care providers, states must undergo “a systems change,” said Josh Hodges, chief customer officer at the National Council on Aging, or NCOA, an advocacy group dedicated to improving care for older Americans. States are recognizing that if they want to serve older adults, they “have to serve caregivers, and the direct care workforce is a vital part of the older adult experience,” he said. With a projected 9.3 million direct care jobs needing to be filled by 2031, states must find ways to fill that gap.” Read more here
Artificial Intelligence
“Nvidia Corp. Chief Executive Officer Jensen Huang showed off new chips aimed at extending his company’s dominance of artificial intelligence computing, a position that’s already made it the world’s third-most-valuable business. A new processor design called Blackwell is multiple times faster at handling the models that underpin AI, the company said at its GTC conference in San Jose, California. That includes the process of developing the technology — a stage known as training – and the running of it, which is called inference.” Read more here
“The government of Saudi Arabia plans to create a fund of about $40 billion to invest in artificial intelligence, according to three people briefed on the plans — the latest sign of the gold rush toward a technology that has already begun reshaping how people live and work.” Read more here
“Microsoft has hired Mustafa Suleyman, a well-known leader and entrepreneur in artificial intelligence, to lead the software giant’s efforts on consumer AI products. Suleyman helped lead Google’s DeepMind, a pioneering artificial intelligence lab that the company acquired in 2014. He left Google and co-founded AI startup Inflection AI, a startup that was last valued at $4 billion and raised funding from investors including Microsoft and Nvidia.” Read more here
“Epic is betting that generative artificial intelligence will be the future of healthcare. The EHR vendor is developing over 60 applications that use the technology, including a billing chatbot and tools to create denial and appeal letters and emergency department discharges. The company's dominance in the hospital industry could give it an advantage in the generative AI market, as health systems might be more likely to invest in a company they've already spent tens — to hundreds — of millions on for their EHRs, Forbes reported March 18.” Read more here
“Hippocratic AI announced a collaboration with NVIDIA to develop empathetic AI healthcare agents — powered by the NVIDIA AI platform – enabling super-low-latency conversational interactions… The AI healthcare agents are built on Hippocratic’s safety-focused large language model (LLM), the first designed specifically for healthcare. Health systems, payors, digital health companies, and pharma deploy Hippocratic AI’s healthcare agents to augment their human staff and complete low-risk, non-diagnostic, patient-facing tasks over the phone.” Read more here
“Microsoft is gearing up for its “year of the AI PC” with two new Surface devices that won’t be sold directly to consumers. The Surface Pro 10 for Business and Surface Laptop 6 for Business both feature Intel’s latest Core Ultra processors, Microsoft’s new Copilot key, and a Neural Processing Unit (NPU) to accelerate some existing and upcoming AI-powered features in Windows 11. Microsoft is calling them “the first Surface AI PCs built exclusively for business.” Read more here
CHIPs Act
“The US will award Intel Corp. $8.5 billion in grants and as much as $11 billion in loans to help fund an expansion of its semiconductor factories, the Commerce Department announced Wednesday, marking the largest award from a program designed to reinvigorate the domestic chip industry. The package will support more than $100 billion in US investments from Intel, including efforts to produce cutting-edge semiconductors at large-scale plants in Arizona and Ohio, the department said on Wednesday. The money also will help pay for equipment research and development and advanced packaging projects at smaller facilities in Oregon and New Mexico.” Read more here
Cloud Computing
“Tencent Holdings Ltd. is looking to expand its cloud business in Saudi Arabia and the United Arab Emirates, in a bet that a focus on developing industries including artificial intelligence in the Middle East will require huge new investments in data storage.” Read more here
Consumer Inflation Fighters
“Split-payment or installment plans such as buy now, pay later (BNPL) enable consumers to spread the costs of purchases over multiple installments. Consumers appear to prefer these options. PYMNTS Intelligence data revealed that in the 12 months before being surveyed, about 3 in 5 shoppers opted for installment plans when shopping. This growing popularity has captured the attention of merchants. Seventy-eight percent of them told PYMNTS Intelligence that they plan to enhance their use of installment plans, while 39% of acquirers, the entities that enable merchants to offer these plans, said they plan to do the same.” Read more here
“Second-hand shopping is gaining traction in several countries around the world. Data from the Statista Consumer Insights survey reveals that in the United States, now as many as 60 percent of respondents say they have made at least one second-hand purchase in the past year, up from 49 percent in 2019. A similar trend can be seen in the other countries polled in the survey, with France seeing the biggest leap (+17 p.p.)” Read more here
“Evidence is mounting that many Americans have reached their limit for tolerating higher prices, raising questions about how much consumer expenditures will continue to power US economic growth this year. After spending freely with savings built up during the coronavirus pandemic and income fuelled by a healthy job market, consumers are becoming more cautious, according to comments from retail and consumer goods executives and official data.” Read more here
Data Privacy & Digital Identity
“Researchers from the CISPA Helmholtz Center for Information Security in Germany have disclosed the details of a new denial-of-service (DoS) attack vector that impacts several widely used UDP-based application protocols and hundreds of thousands of internet-facing systems.” Read more here
Digital Infrastructure & Connectivity
“Spending on edge computing is growing fast and because it's 2024, analyst firm IDC believes AI is a big reason for the boost. "Edge computing will play a pivotal role in the deployment of AI applications," wrote IDC analyst Dave McCarthy. "To meet the scalability and performance requirements, organizations will need to adopt the distributed approach to architecture that edge computing provides. OEMs, ISVs, and services are taking advantage of this market opportunity to enable AI in edge locations." That need for distributed scale means that by 2027 IDC predicts global spending on edge compute will approach $350 billion – well beyond its expected $232 billion spend in 2024, which itself represents 15.4 percent growth over 2023.” Read more here
“Speaking over the week at the South by Southwest conference (SXSW 2024) and reported by AI Business, CEO Michael Dell said: “There definitely needs to be a big build-out of data center capacity for sure.” He added: “We could need 100 times more of this in 10 years than we have today.” Dell attributed the increase in data center demand to the rising interest in AI services, and explained that people will learn that they can get better results from generative AI models. He said we are only in the first or second year of “the big AI revolution” and predicted that the growth of AI will be 10x faster than the growth rate of the Internet.” Read more here
EPS Diplomats
“US. stocks have been unaffected by higher interest rates from the world’s most powerful central bank over the past few years, as incremental earnings growth gives investors ample reasons to pour money into equities even amid an increasingly gloomy policy-rate outlook, according to DataTrek Research... a Fed hawkish pivot would be a sign that the economy remains reasonably strong, a good backdrop for improving corporate earnings in 2024 and 2025…” Read more here
Guilty Pleasures
“Bitcoin isn't the only asset that's been breaking records with triple-digit gains over recent months — cocoa's 186% gain over the last 12 months has eclipsed bitcoin's roughly 150% climb in the same stretch. At the end of last week, cocoa futures touched a record $8,018 per metric ton. The commodity has pared gains since, but it remains near all-time highs due to weaker crop yields in West Africa, political instability in some of the top-producing countries, lack of investment in new cocoa plants, and imbalanced supply and demand.” Read more here
Precision Ag & Agri Science
“John Deere is looking to increase American agricultural yields by 50% by 2050 through the use of connectivity technology. “Our population is expected to grow to almost 10 billion by 2050,” Ryan Krogh, global combine business manager at John Deere, said during the company’s opening keynote speech at Satellite 2024.” Read more here
Space Economy
“SpaceX is building a network of hundreds of spy satellites under a classified contract with a U.S. intelligence agency, five sources familiar with the program said, demonstrating deepening ties between billionaire entrepreneur Elon Musk's space company and national security agencies. The network is being built by SpaceX's Starshield business unit under a $1.8 billion contract signed in 2021 with the National Reconnaissance Office (NRO), an intelligence agency that manages spy satellites, the sources said.” Read more here
The Strategies Behind Our Thematic Models
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
CHIPs Act – Capturing the reshoring of the US semiconductor industry and the $52.7 billion poised to be spent on semiconductor manufacturing.
Cloud Computing – Companies that provide hardware and services that enhance the cloud computing experience for users, such as co-location, security, and edge computing.
Consumer Inflation Fighters - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
Core Holdings – Companies that reflect economic activity and are large enough to not get pushed around by day-to-day market trends. Low-beta, large-cap names able to better withstand economic turmoil.
Digital Infrastructure & Connectivity -The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
EPS Diplomats - Profitable large capitalization companies proven to produce above-average EPS growth and provide investors with the benefit of multiple expansions.
EV Transition - Capturing the transition to EVs and related infrastructure from combustion engine vehicles.
Guilty Pleasure – Companies that produce/provide food and drink products that consumers tend to enjoy regardless of the economic environment and potential long-term health hazards associated with excessive consumption.
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Luxury Buying Boom - Tapping into aspirational buying and affluent buyers amid rising global wealth.
Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Nuclear Energy & Uranium – Companies that either build and maintain nuclear power plants or are involved in the production of uranium.
Precision Ag & Agri Science – Companies that look to address shrinking arable land by helping maximize crop yields utilizing technology, science, or both.
Rebuilding America - Turning the focused spending on rebuilding US infrastructure into revenue and profits.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.
Space Economy – Companies that focus on the launch and operation of satellite networks.
The Strategies Behind Our Dividend Income Models
Monthly Dividend Model – Pretty much what the name says – this model invests in companies that pay monthly dividends to shareholders.
ETF Dividend Model – High-yielding ETFs that provide a range of exposures from domestic equities, international equities, emerging market equities, MLPS, and REITs.
ETF Enhanced Dividend Model – A group of high-yielding ETFs that utilize options to enhance yield through collecting option income.
Don’t be a stranger
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