- Mark Zuckerberg, Bill Gates and other CEOs and celebs are at a wedding pre-party in India this weekend.
- Billionaire Mukesh Ambani's lavish bash may help them make inroads into the huge Indian market.
- Apple, Microsoft, Amazon, Meta, and Netflix have all touted the country's enormous growth potential.
Bill Gates, Mark Zuckerberg, and Sundar Pichai are among the many US business leaders and other celebrities such as Ivanka Trump invited to a pre-wedding party in India being thrown by Asia's richest person this weekend.
The legion of technology, finance, and media bosses at Mukesh Ambani's three-day bash underscores not just his global influence, but India's growing importance to foreign companies.
Ambani, who owns a 42% stake in Reliance Industries, ranks 11th on the Bloomberg Billionaires Index with a $111 billion fortune, just behind Alphabet founders Larry Page and Sergey Brin. He's hosting this weekend's celebration for his youngest son, Anant, and his fiancée, Radhika Merchant.
The centibillionaire's grip on domestic commerce makes him a powerful partner for Western companies trying to break into the Indian market.
Meta, Alphabet, Qualcomm, and Intel have all invested in Reliance's telecoms subsidiary, Jio Platforms, in recent years.
Vital growth frontier
US executives are eager to cozy up to Ambani and Reliance because they see dollar signs when they look at India.
The Asian nation has long offered a plentiful supply of cheap labor, a deep pool of tech talent, and some level of familiarity as an English-speaking democracy.
The prolonged shutdown of Chinese factories during the pandemic, the political and legal challenges of operating in China, and the country's economic woes have also spurred many US companies to spread their global footprint and rely more on India.
India is also in the midst of a technological and financial revolution. More and more Indians are embracing digital payments, online communications, and e-commerce as their incomes rise.
"What I do see in India is a lot of people entering the middle class, and I'm hopeful that we can convince some number of them to buy an iPhone," Apple CEO Tim Cook said on an earnings call in May last year.
"I really feel that India is at a tipping point, and it's great to be there."
On another earnings call in August, Cook noted that Apple has a "very, very modest" share of the world's second-largest smartphone market, creating a "huge opportunity" for the company in India.
His comments help explain why Apple opened its first two stores in India last year, and its revenue from the country hit a new record in the fourth quarter.
On an April earnings call, Netflix co-CEO Ted Sarandos hailed India as a "big prize" given its "enormous population of entertainment-loving people."
Meanwhile, Meta gave a shout-out to India in its recent annual report, revealing it was one of the three biggest sources of growth for active users last year.
As for Amazon, its India business attracted about 1 billion customer visits to its website during the month-long Great Indian Festival sales event in the fourth quarter, including 4 million who made their very first Amazon purchase.
Moreover, Microsoft has touted India as a key driver of growth in LinkedIn members. Memberships jumped 19% year-on-year to 100 million there in the first quarter of 2023.
Profits, partnerships, and parties
India is clearly a key growth driver for some of America's largest companies, so it's no surprise they're keen to make further inroads into that market.
The Ambani pre-wedding event offers a chance to break bread with one of India's most powerful men and his family, rub shoulders with a who's who of industry leaders, discuss and strike local deals, and enjoy what's bound to be one of this year's most extravagant parties.
It's therefore no surprise that America's business elite are showing up in force.
Original source at: Business Insider | https://www.businessinsider.com/mark-zuckerberg-meta-ambani-wedding-party-big-tech-india-market-2024-3
- There's more evidence that stocks are in a secular bull cycle, Ned Davis Research said.
- Equities' recent performance, among other economic indicators, suggests more upside ahead.
- Since hitting its secular bottom in 2009, the Dow has hit fresh all-time highs every year for 12 years.
Investors are coming off a banner year in the US stock market — and there could be plenty more gains ahead, according to Ned Davis Research.
In a note published Thursday, chief global investment strategist Tim Hayes highlighted a handful of fresh evidence that suggests a secular, long-term bull cycle is indeed still alive and well. The recent strength in equities is consistent with the thesis, and broader macroeconomic conditions also support forecasts for more gains to come.
Over the last three months, stocks have passed what Hayes called the duck test: "If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck."
The Dow Jones Industrial Average, for instance, has notched record highs already this year, which have been followed by records in the S&P 500. Since the Dow hit its secular bottom in 2009, it's advanced with higher highs and higher lows, touching fresh all-time highs every year for 12 years.
That tracks the trend seen in the secular bull cycles of the last 100 years, according to NDR.
While absolute performance has been strong, so have the measures of relative performance, Hayes added. Stocks tend to outperform bonds and commodities during secular bull cycles, as they are today, and that provides further "secular confirmation."
Secular bull markets also tend to result in US outperformance compared to other regions' stock markets, the strategist said.
In addition, low unemployment, rising confidence, and strong GDP figures also imply a positive macro picture, which together support a secular bull market.
To that point, labor market data out Friday showed the US added 353,000 nonfarm payrolls in January, far surpassing expectations for job growth. The unemployment rate held steady from at 3.7%.
"Not only did we get for the most part very good data about how 2024 started, but the pretty remarkable trends that we saw in 2023 held up after revisions as well," Nick Bunker, North America economic research director at Indeed Hiring Lab, said in comments to Business Insider. "Overall story is a labor market that's very resilient."
What's more, consumer sentiment surged last month to its highest in over two years, the University of Michigan reported on Friday.
Over the last two months, the gauge has climbed a cumulative 29% — the biggest two-month increase in more than three decades.
"Considering the increased confirmation from indicators of market performance and economic conditions, the secular bull is not only passing the duck test, but doing so with a high grade," Hayes said.
Original source at: Business Insider | https://markets.businessinsider.com/news/stocks/stock-market-outlook-bull-case-forecast-wall-street-jobs-economy-2024-2
- It's virtually impossible for first-time buyers to afford a home today, says Mark Zandi of Moody's.
- The surge in house prices and mortgage rates since the pandemic is pricing them out, he says.
- An expanded low-income housing tax credit could spur building and help buyers, Zandi suggests.
Sky-high house prices and mortgage rates have dashed many Americans' dreams of owning their own home, the chief economist of Moody's Analytics says.
Prices rose about 5% last year, and are up nearly 50% over the past four years or so, Mark Zandi said in a X post on Sunday, citing his firm's repeat sales house price index.
St. Louis Fed data shows about a 27% rise in the median US home sale price, from below $330,000 in the first half of 2020 to $418,000 in the last three months of 2023.
Meanwhile, 30-year mortgage rates have surged from historic lows of 2.5% during the pandemic to nearly 7%, Zandi noted.
Their rise is primarily due to the Federal Reserve lifting interest rates from nearly zero at the start of 2022 to more than 5% in an effort to curb inflation. Raising mortgage payments is a key aspect of how the Fed's rate hikes fight inflation, as homeowners are left with less disposable income to spend and drive up prices.
Aspiring homeowners face not paying more for goods and services, but the prospect of paying a near-record price for their property, and covering hefty monthly payments.
"For the two-thirds of Americans who own their home, the higher prices mean a massive increase in their wealth," Zandi wrote on X. "But of course, this is a massive problem for potential first-time homebuyers. Given the collapse in affordability, buying a home is not even remotely possible."
The so-called affordability crisis has been fueled by the lock-in effect, where homeowners on cheap mortgage rates don't want to lose it by selling. They've also balked at paying top dollar for their next place and taking on a far more onerous mortgage.
Stand-off
As for prospective buyers, many have been priced out and are waiting for mortgage rates to fall, as they're reluctant to settle for a worse home than they could have afforded just a few years ago. The stand-off between buyers and sellers, and a shortage of available homes, has pushed up prices while reducing transaction volumes, effectively freezing the market.
Indeed, sales volumes of existing homes slumped by 17% between February and December last year, from 4.6 million units to below 3.8 million, per the St. Louis Fed.
The US needs to create a lot more housing inventory to normalize the market and help first-time buyers get on the property ladder, Zandi said. He called for an expanded low-income housing tax credit to encourage developers to build more affordable homes.
Zandi has previously warned that several things need to happen for sales volumes to return to normal levels.
"The only way out of the box, the only way to get sales back up is mortgage rates have to come down, incomes have to continue to improve, we have to avoid a recession, and I suspect we'll have to see some house price declines at some point here," he told Yahoo Finance in November.
Original source at: Business Insider | https://www.businessinsider.com/zandi-moodys-house-prices-mortgage-interest-rates-affordability-crisis-market-2024-1
- Chinese tech giants are racing to catch up with US firms like OpenAI in the AI arms race.
- Over 40 AI models have been approved for public use by the government, per local news reports.
- China has tight controls on AI , with tech companies required to "adhere to socialist values."
China's tech giants are racing to catch up in the AI arms race.
The Chinese government has approved more than 40 AI models in the past six months since it began this process, according to local media reports cited by Reuters, as tech companies seek to make up ground on US rivals like OpenAI.
That includes 14 new Large Language Models (LLMs) approved for public use in just the last week. A senior executive at Chinese tech firm Tencent previously described the country's emerging AI gold rush as a "war of a hundred models" in September.
Leading the way in this "war" is Baidu, a search engine giant sometimes referred to as "China's Google."
The company has released a ChatGPT-rival named "Ernie Bot" which, after a rocky start, it now says has over 100 million users and can go head-to-head with OpenAI's GPT-4 model.
Baidu faces competition from Apple smartphone rivals Huawei and Xiaomi, who have also invested in their own AI models, and from TikTok owner Bytedance.
The latter's AI push has already proven highly controversial. Bytedance has built an unreleased AI voice converter that researchers warn could be used for fraud, and the company was suspended from accessing OpenAI's tools in December after The Verge reported that it had been using them to build a ChatGPT competitor.
Unlike their US rivals, Chinese companies that develop their own chatbots face political as well as technological challenges.
The Chinese government requires LLMs to meet a strict set of rules before being released to the public, with regulations released last year stating that all chatbots must "adhere to core values of socialism" and not challenge state power.
That has meant that many of the country's most advanced AI models have a tendency to avoid sensitive topics, such as the status of Taiwan.
When Bloomberg quizzed a selection of China's ChatGPT rivals, including Baidu's Ernie Bot and the Tencent-backed Minimax, they either tried to change the subject when asked certain questions or refused to answer what they deemed to be "illegal" questions. When asked whether Taiwan is a country, all the bots described it as a part of China.
Taiwan, a self-governing nation that China regards as a breakaway province, has responded by announcing funding for its own AI model, named Taide, that it hopes will be free of Chinese political influence.
Ultimately, it may be geopolitical tensions that hobble China's attempts to become an AI superpower.
The US has announced a series of restrictions on the sale of advanced semiconductors crucial for building and training AI to China, with experts warning that this will hamper the ability of Chinese companies to build advanced large language models.
Original source at: Business Insider | https://www.businessinsider.com/chinese-government-approves-more-ai-models-rivals-us-report-2024-1
- Donald Trump claimed credit for the stock market's surge to record highs this month.
- The former president said investors are betting he'll be re-elected this year and stocks will rise.
- Trump predicted in 2020 that a Biden presidency would cause a devastating market crash.
Stocks have surged to record levels this year, not because of potential interest-rate cuts or recession relief, but because investors are betting on Donald Trump to be re-elected — at least according to the former president.
"THIS IS THE TRUMP STOCK MARKET," Trump said in a Truth Social post on Monday. "BECAUSE MY POLLS AGAINST BIDEN ARE SO GOOD THAT INVESTORS ARE PROJECTING THAT I WILL WIN, AND THAT WILL DRIVE THE MARKET UP."
"EVERYTHING ELSE IS TERRIBLE (WATCH THE MIDDLE EAST!), AND RECORD SETTING INFLATION HAS ALREADY TAKEN ITS TOLL," he continued.
The benchmark S&P 500, tech-heavy Nasdaq Composite, and venerable Dow Jones Industrial Average have notched record highs in recent days.
Trump appears to be taking credit for the market boom, in a bid to prevent it from boosting Joe Biden and the sitting president's reelection campaign.
The reality-TV star took a slightly different tack in December, however, complaining the rally was "making rich people richer."
Trump repeatedly boasted about rising stocks during his time in office, and warned in 2020 that electing Biden would trigger a "stock-market collapse the likes of which you've never had."
In contrast to Trump's claims, many experts have attributed the striking rally to a brightening economic outlook.
Stocks tumbled in 2022 as historic inflation spurred the Federal Reserve to raise interest rates from virtually zero to more than 5% within 18 months. The hikes fanned fears of slower growth, a spike in unemployment, corporate bankruptcies, and even a full-blown recession.
However, stocks rebounded strongly last year as the US economy proved resilient to steeper borrowing costs, the pace of price growth slowed, and joblessness remained historically low.
Rate cuts loom
They've notched further gains this year as new data has shown the economy grew by a surprisingly strong 3.3% in the fourth quarter, annualized inflation has cooled from over 9% to 3.4% in December, and unemployment held at 3.7% last month.
Moreover, the Fed has penciled in several rate cuts this year, which could encourage spending over saving and reduce borrowing costs, making a recession less likely and boosting companies' profits and stock prices.
Trump is presumably aware of the key drivers fueling the stock market's advance, and knows they probably don't include his possible reelection. He may be laying claim to the market's gains under Biden, and dangling the prospect of further outperformance if he retakes the White House, to give him an edge ahead of November's election.
Several experts have echoed Trump's warnings about the damage already done by inflation and the threat posed by foreign conflicts.
JPMorgan's Bob Michele has flagged the impact of higher prices on poorer households, while hedge-fund titan Ray Dalio and bank chief Jamie Dimon have warned of fallout from the fighting in the Middle East.
Original source at: Business Insider | https://markets.businessinsider.com/news/stocks/trump-biden-stock-market-record-rally-recession-inflation-presidential-election-2024-1
- China has helped globalize the yuan by gradually opening up its bond market to foreign investors, a new paper says.
- Chinese bonds are now treated more like debt from a developed nation, rather than from an emerging market, the authors argue.
- But Beijing faces a big test as China's bond market has seen record outflows.
China's gradual opening of its bond market has helped elevate the yuan's status globally, but the currency is about to face a big test.
Over the last two decades, China has gradually allowed more traders and central banks to buy into its yuan-denominated bond market, according to an August paper published by the National Bureau of Economic Research.
Beijing staggered the entry of stable investors into its debt with a series of policy moves that included varying quotas, lock-up periods, and registration requirements. Now, Chinese bonds are viewed more favorably, are starting to be treated more like debt from more advanced economist, the economists wrote.
"We find that China's reputation is in between emerging markets and developed countries and has drifted upwards in recent years," they said.
While the yuan still has a long way to go before it can challenge the US dollar on the world stage, China's currency is becoming more international, the paper added.
Indeed, Russia's war on Ukraine and the Western sanctions that followed have spurred greater use of the yuan. Russia is now the third-largest market for yuan transactions outside the Chinese mainland, as it takes payment for its energy exports in yuan instead of the dollar, which is the primary currency for most commodities.
For now, the yuan is the fifth most widely used currency in international payments markets, according to SWIFT data. The US dollar remains at the top, followed by the euro, British pound and Japanese yen.
But in recent months, China's currency has been losing value as central banks around the world hike interest rakes while the People's Bank of China cuts rates. On Friday, the yuan dropped to its lowest level in three months.
The decline has coincided with a record outflow from China's bond market, presenting a major test for Beijing, which could be tempted to restrict capital to stop the bleeding.
Ultimately, the authors wrote, the trajectory for yuan-denominated bonds will not be a straight line as China's reputation will fluctuate based on any restrictions on foreign investment in the face of future crises.
"By beginning with allowing investment from more stable investors and only later allowing in flightier ones, China has put itself on a path towards becoming an international currency while trying to minimize the risks it faces on the transition path," the paper said. "Whether it is able to achieve this while avoiding costly episodes of capital flight and the imposition of capital outflow controls is an open question."
Original source at: Business Insider | https://markets.businessinsider.com/news/currencies/dollar-vs-yuan-china-international-bond-market-renminbi-currency-reserve-2022-8
- Meta CEO Mark Zuckerberg shared his new, boyish metaverse avatar on Friday.
- He posted it on Instagram after a creepy, dead-eyed version from days earlier was roundly mocked.
- Zuckerberg said big graphics updates were coming for Meta's Horizon Worlds metaverse platform.
Meta CEO Mark Zuckerberg unveiled a new, boyish metaverse avatar on Friday after a creepy, dead-eyed version he posted Monday was roundly mocked.
Zuckerberg also on Friday promised a major graphics update for Horizon Worlds, Meta's metaverse platform, which has been criticized for its budget feel.
On Monday, Zuckerberg shared on his Facebook profile that Horizon Worlds had launched in France and Spain, and posted an image of the Zuckerberg avatar standing in front of the Eiffel Tower
Social-media users were quick to deride the image, with some likening the graphics to 1990s video games like Zelda and Quake, and 2007's Second Life.
In an Instagram post Friday featuring his new-look avatar, Zuckerberg admitted the avatar he posted Monday was "basic" and said it had been generated quickly to celebrate the France and Spain launch. He also on Friday posted a screenshot of a better-looking Horizon Worlds in an apparent bid to reassure his followers.
"The graphics in Horizon are capable of much more — even on headsets — and Horizon is improving very quickly," Zuckerberg said.
The capabilities of the metaverse, particularly as an alternative to face-to-face interaction, are often called into question. The phenomenon of virtual real estate dealing in the metaverse was recently slammed by the billionaire entrepreneur Mark Cuban.
Zuckerberg said earlier this year that the company's metaverse project would bleed significant sums of money for up to five years.
Meta stock has lost half its value this year as Facebook's user numbers shrink and doubts grow over its expensive push into the metaverse. The company froze hiring in May as revenue growth slowed.
Reuters reported in July that Zuckerberg was upping performance goals at the company to get rid of staff that "shouldn't be here."
Original source at: Business Insider | https://www.businessinsider.com/mark-zuckerberg-unveils-new-boyish-avatar-days-after-dead-eyed-2022-8