This Week's Signals
February 17, 2024
Artificial Intelligence
“Technology company Nokia unveiled an AI-powered tool that generates messages for industrial workers, including warnings about faulty machinery based on real-time data and recommended ways to boost factory output. The tool, "MX Workmate", will expand on Nokia's existing communications technology used by industrial clients by harnessing generative AI large language models (LLMs) to write human-like text…” Read more here
“In November, Airbnb acquired a stealth AI firm launched by Siri’s co-founder, called GamePlanner.AI. The deal valued the secretive startup at around $200 million, according to reports. Though the hosting company didn’t telegraph its plans for GamePlanner at the time, Airbnb co-founder and CEO Brian Chesky today shared a high-level overview of Airbnb’s larger plans for AI, saying that it planned to accel at the “application layer” of AI, building one of the “most innovative AI interfaces ever created.” Read more here
“Apple announced there are now over 1,000 apps, designed specifically for Vision Pro. The announcement came from Greg Joswiak, Senior VP of Marketing at Apple, who also added there are over 1.5 million compatible apps for the headset.” Read more here
Consumer Inflation Fighters
“Target Corporation (TGT) today introduced its new low-price owned brand, dealworthy, designed to give consumers incredible value on nearly 400 everyday basics. With dealworthy, Target is offering more options at lower prices, starting at less than $1, while strengthening its portfolio of owned brands.” Read more here
CHIPs Act
“President Joe Biden’s administration plans to launch a $5 billion semiconductor research consortium to bolster chip design and hardware innovation in the US and counter China’s efforts to capture the cutting edge of the industry.” Read more here
“Applied Materials Inc., the largest US maker of chipmaking machinery, jumped in late trading after giving a bullish revenue forecast for the current period, signaling that some of the largest semiconductor companies are increasing their investments in new production… The outlook suggests that the chip industry is bouncing back more quickly than expected. Applied Materials supplies gear to all of the sector’s major manufacturers — a list that includes Samsung Electronics Co., Taiwan Semiconductor Manufacturing Co. and Intel Corp. That makes the company’s projections an indicator of confidence in future demand at these key parts of the electronics supply chain.” Read more here
Consumer Inflation Fighters
“Millennials in their 30s sank deeper into credit card debt toward year-end, a new report found, as US credit card debt continued to climb to new heights… The data comes months after the federal student loan pause ended in October, a source of financial strain for many younger adults. Additionally, interest rates on credit cards remain at near 38-year highs, making it harder to pay off climbing debts, which tend to tick higher during the holiday season.” Read more here
Digital Infrastructure & Connectivity
“Nvidia CEO Jensen Huang believes that, over the next four to five years, a trillion dollars' worth of data center infrastructure and hardware will be built across the world.” Read more here
“Citing a recent real estate filing, BizJournal reports Microsoft purchased nearly 300 acres of land from the energy firm for $17.7 million. The seller was identified as United Power and Land Co., a company affiliated with Xcel, in a deal that closed on February 12. Xcel has confirmed the sale and Microsoft’s plans for a data center, but further details about the scope of the project weren’t shared.” Read more here
“US operator AT&T and the First Responder Network Authority (FirstNet) have announced a ten-year, $8 billion investment to expand and upgrade the nationwide public safety network. FirstNet will invest $6.3 billion through its network contract with AT&T and "anticipates an additional $2 billion" for ongoing investments in coverage enhancements for public safety. According to AT&T, the next phase of FirstNet will include the addition of 1,000 purpose-built FirstNet cell sites within the next two years.” Read more here
“A crypto data center provider says it is planning to spend $100 million building a 200MW facility in the US state of Oklahoma. Polaris Technology is constructing the Bitcoin mining facility on a 42-acre site at the John T. Griffin Industrial Park, Port Muskogee, south of Tulsa.” Read more here
Digital Identity & Data Privacy
“Screenshots shared with TechCrunch show that the exposed data included private keys for BMW’s cloud services in China, Europe, and the United States, as well as login credentials for BMW’s production and development databases. It’s not known exactly how much data was exposed or how long the cloud bucket was exposed to the internet. “Unfortunately, this is the biggest unknown in public bucket problems,” Yoleri told TechCrunch. “Only the bucket owner can see how long it has actually been open.” Read more here
EV Transition
“While there are some serious challenges surrounding EVs—such as the need to build out the nation’s charging infrastructure—automakers are on track to continue on a path of substantial growth. Leading forecasters agree that sales and market share will continue to grow in 2024. But they disagree on the rate of growth, and give different weights to some of the main factors that affect the market, from gasoline prices to the availability of low-cost models.” Read more here
“According to a new report published by Allied Market Research, titled, “Residential EV Charging Station Market," The market was valued at $5.4 billion in 2022, and is estimated to reach $101 billion by 2032, growing at a CAGR of 36.1% from 2023 to 2032.” Read more here
Guilty Pleasure
“Anheuser-Busch can’t just blame the culture wars for a tepid year. Customers appear unwilling to pick up the tab on increasing beer costs, which rose nearly 6% from April 2022 to 2023 as beer companies struggled to keep up with the increased cost of packaging and transportation caused by inflation. Other brewers experienced a similar sales slump to Anheuser-Busch. Heineken’s stock dropped over 6% on Wednesday after the brewer forecasted a modest single-digit profit growth. Heineken raised prices by over 10% in the first half of 2023, and continued price hikes into the second half of the year as volumes declined. Pricing has impacted volumes, that’s obvious.” Read more here
“The makers of Hershey and Cadbury chocolates are planning more price hikes to cover a fresh record-setting surge in cocoa prices, even as inflation-hit consumers curb their purchases and company profits face a hit. Cocoa prices have roughly doubled over the past year, hitting a series of record highs in recent weeks due to shrinking supplies. Chocolate makers had been passing the rising costs on to consumers without losing much demand. But shoppers are cutting back to a greater degree than they did last year, Hershey and Cadbury maker Mondelez (MDLZ.O), opens new tab disclosed in recent quarterly earnings calls, hurting their outlooks for sales.” Read more here
Nuclear Energy & Uranium
“Boris Schucht, chief executive of Urenco, said a US bill proposing to ban uranium imports from Russia would boost a multibillion-dollar effort by western nations to strengthen their nuclear supply chains by providing long-term certainty to market participants… Russia controls almost 50 per cent of global uranium enrichment capacity, a dominant position that has raised energy security concerns in the west following Moscow’s full-scale invasion of Ukraine. The US and crucial allies are now trying to rebuild their nuclear fuel supply chains, which were compromised by a collapse in demand after the Fukushima accident in 2011 caused a leak of radioactive materials.” Read more here
Safety & Security
“The US moved ahead with a $23 billion sale of F-16 warplanes, missiles and bombs to long-time ally Turkey after Ankara’s ratification of Sweden’s membership in NATO. Congress approved Turkey’s acquisition of as many as 40 Lockheed Martin Corp. F-16 Block 70 aircraft and 79 upgrade kits to modernize its fleet as well as hundreds of missiles and bombs.” Read more here
“The Senate on Sunday pushed a $95 billion emergency aid bill for Ukraine and Israel past a critical hurdle, with a bipartisan vote that kept it on track for passage within days. The vote was 67-27 to move forward on the package, which would dedicate $60.1 billion to helping Kyiv in its war against Russian aggression, send $14.1 billion to Israel for its war against Hamas and fund almost $10 billion in humanitarian assistance for civilians in conflict zones, while addressing threats to the Indo-Pacific region. In a rare Sunday session, 18 Republicans joined Democrats to advance the measure, which leaders hope the Senate will approve as early as Tuesday.” Read more here
Space Economy
“There could be a “gold rush” in space, says Tim Marshall, author of The Future of Geography and a former diplomatic and foreign affairs editor at Sky News. Just as miners in the 19th century ventured into the lawless frontiers of North America, the presence of rare materials on the moon and elsewhere might fuel a race to harness the opportunities of outer space.” Read more here
“Intuitive Machines is looking to succeed where past ventures have failed with its inaugural lunar lander mission, which would mark the first time a private company has landed a spacecraft on the moon — ever.” Read more here
Don’t be a stranger
Thanks for reading and if you have a suggestion for an article or book we should read, or a stream we should catch, email us at info@tematicaresearch.com. The same email works if you want to know more about our thematic and targeted exposure models listed below.
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.