President Zelenskyy visits the US

17th December 2022 – 23rd December 2022 | Another week in the markets

S&P 500	Nasdaq	VIX	DJIA	Russell 1000	NYSE
3,844.82	10,497.86	20.87	33,203.93	2,108.12	15,188.45
-0.20%	-1.94%	-7.74%	0.86%	-0.24%	1.13%
Nifty 50	Gold	Silver	Brent crude	USD-INR	EUR-INR
17,806.80	$1,806.00	$23.92	$84.55	82.80	87.89
-2.53%	0.17%	2.18%	6.67%	0.14%	0.40%

Source: MarketWatch 

Hello Saturday,

This week President Zelenskiy visits the US, Japan surprises markets by raising interest rates, and the rising popularity of a new chatbot worries Google. 

• Binance, the world’s largest cryptocurrency exchange, is under investigation by the US Department of Justice for possible money laundering causing investors to panic-withdraw over $3 billion in 24 hours 
• YouTube acquires rights to the National Football League’s Sunday Ticket for seven years furthering the trend of sports viewing moving from cable to streaming services 
• US lawmakers approve the omnibus bill of $1.7 trillion that includes a $45 billion aid package for Ukraine to help fend off Russia’s attack 
• Google management issues code red over the rising popularity of ChatGPT, the newest AI wonder of the company OpenAI
• After resisting for almost a year, Japan finally joins other central banks and raises one of its benchmark interest rates to help fight inflation 

Taking stock | Bye-nance? | YouTube’s touchdown | The purse strings of war | Google Killer chit-chat | Samurai mode unlocked | Invest wisely

Taking stock

S&P 500 and Nasdaq posted weekly losses owing to a growing fear of recession amongst investors. The core personal consumption expenditure price index came in slightly higher than economists expected, signalling that the Fed won’t slow down in its fight against inflation. While S&P and Nasdaq lost 0.20% and 1.94% respectively, the Dow posted a 0.86% gain. 

Bye-nance?

Binance, the world’s largest cryptocurrency exchange, has run into some issues regarding transparency with the US government. On the back of the recent collapse of its rival FTX, crypto investors are jittery about Binance’s stability. This is especially worrisome since it accounts for more than half of all trading volume in the crypto market. Here’s what you need to know: 

• Last week, Binance paused withdrawals of stablecoin USDC after it saw withdrawals of about $3 billion within 24 hours by panic-stricken users.
• While the company said it was to undertake a token swap (exchanging one cryptocurrency for another without the need for fiat currency), this is a worrying sign.
• Earlier this year, when crypto companies paused withdrawals, it didn’t lead to good news. For instance, in the summer, Celsius, a crypto lender, paused withdrawals before ultimately filing for bankruptcy.
• While currently, there is no indication that Binance will follow the same path, it’s best to be cautious given the risks concerning the platform. 
• Since Binance is not a public company or listed on the US stock exchange like its rival Coinbase, its detailed financial statements are not on public record.
• The company does not disclose basic financial information like its revenue, profit, and cash reserves or reveal its exposure to risks. 
• Currently, the company is believed to be under investigation by the US Department of Justice for money laundering and sanctions violation.

YouTube’s touchdown

YouTube acquires rights to the National Football League’s (NFL) ‘Sunday Ticket’, an out-of-market sports package of games, in a $2 billion annual deal for seven years. From January 2023, NFL Sunday Ticket will be available in the US only on YouTube in two ways. First, as an add-on to YouTube TV, and second, as a standalone option on YouTube Primetime Channels. 

Prior to this landmark sports streaming deal, the satellite TV provider, DirecTV, had the rights to Sunday Ticket since 1994. Due to the latest increase in people opting out of satellite TV, DirecTV has seen a significant drop in its customers, losing about $500 million annually on the Sunday Ticket package. Last year, Amazon gained rights to Thursday night NFL games. Earlier this year, Apple gained rights to Major League Baseball and Major League Soccer games. YouTube’s new deal only furthers the trend of sports fans steadily switching from traditional TV to streaming. 

The purse strings of war

Ukraine President Volodymyr Zelenskiy’s visit to the US this week ended with the promise of Patriot missiles and other aid. On Friday, US lawmakers approved a $45 billion aid package for Ukraine as part of a larger bill – the $1.7 trillion omnibus bill for the fiscal year 2023. This includes $858 billion in defence funding and $772.5 billion for non-defence discretionary programs. The $45 billion aid to Ukraine to fend off Russia’s invasion would include $12 billion to replenish the supply of US equipment to Ukraine, $9 billion to the Ukraine military for training, logistics support, and salaries, and about $13 billion to the Ukrainian government for economic support. 

Though tragic for humanity, times of war tend to be a great time for defence stocks. Russia’s invasion of Ukraine, and the US’s involvement in the war, have boosted the performance of US defence contractors. For instance, Lockheed Martin Corp is up about 35% year-to-date. And if you look at the Dow Jones U.S. Aerospace & Defense Total Stock Market Index, it is up more than 10% in 2022, while the broader market has been struggling, with the Dow Jones Industrial Average being down by more than 9% this year. 

Source: Barrons 

Google Killer chit-chat

Open AI’s conversational chatbot ChatGPT released on November 30th 2022, has been labelled as ‘Google’s killer’ by popular consensus. And this week, Google’s management issued a code red in response to ChatGPT’s rise in popularity. But wait, what exactly is ChatGPT, and how is it different from the several other chatbots? Let’s ask the AI of the hour, shall we?

I am an artificial intelligence assistant trained by OpenAI. My primary function is to provide helpful and accurate information in response to user inquiries. I have been designed to be able to understand and generate human-like text so that I can communicate with users in a natural and conversational way. One key difference between me and many other chatbots is that I am a large language model trained by OpenAI. This means that I have been trained on a very large dataset of text and can generate human-like responses to a wide range of questions and prompts. This allows me to have a more natural and fluid conversation with users, and to provide helpful and accurate information on a wide range of topics.

In less than a week of its launch, ChatGPT had one million users fascinated by the nuance and soft skills reflected in the bot’s answers. Users have been using ChatGPT for a wide variety of things, including writing poetry, solving math problems, and debugging code. While it’s way too soon to write Google’s epitaph, Sundar Pichai, CEO of Google’s parent company, Alphabet, has reportedly been participating in several meetings lately around addressing threats posed by ChatGPT on Google’s search engine business. 

Samurai mode unlocked

This year, while central banks around the world kept increasing their benchmark interest rates to combat surging inflation levels, Japan remained an exception. That is until this week. In a surprise decision this week, the Bank of Japan (BOJ) raised one of its benchmark rates from 0.25% to 0.5%. This move pushed the yen to soar to a four-month high against the US dollar and see its largest one-day jump in over 24 years. This move by the BOJ also wreaked havoc in the global markets because it signalled to investors that 2023 might bring with it more volatility and upsetting inflation news. 

Invest wisely 

As you prepare to ring in the new year with a new list of goals, link them with your investments to ensure they materialise. Be it crossing off a new travel destination from your bucket list, starting your business, renovating your home, or buying your dream car – map your goals to specific investments in a disciplined manner to meet them in your desired timeframe. The Goals feature on Appreciate is specifically designed to manage such goal-based investing seamlessly. Set your goals, choose your investment frequency, and benefit from smart, systematic investments in global stock markets. Download the Appreciate App today!

Warm regards,
Another week
in the markets