1st April 2023 – 7th April 2023 | Another week in the markets
| S&P 500 | Nasdaq | VIX | DJIA | Russell 1000 | NYSE |
| 4,105.02 | 12,087.96 | 18.40 | 33,485.29 | 2,245.93 | 15,379.13 |
| -0.1% | -1.1% | -3.26% | 0.6% | 1.18% | 1.17% |
| Nifty 50 | Gold | Silver | Brent crude | USD-INR | EUR-INR |
| 17,599.15 | $2,023.70 | $25.13 | $84.94 | 81.88 | 89.30 |
| 3.04% | 1.85% | 3.69% | 6.27% | -0.37% | 0.22% |
Source: MarketWatch
Hello Saturday,
This week, the US jobs report indicates a labour market cooldown, Samsung estimates the worst quarterly profit since 2009, and Apple announces the launch of its first Indian retail store.
- The March jobs report shows monthly job creation to be lower than estimates, and average hourly earnings growth slows; a cooling labour market may help bring down overall inflationary pressures.
- Samsung estimates first-quarter profit for 2023 to plunge by 96% amidst a global slowdown in chip demand; the company also announces plans for a significant cut in chip production.
- Google CEO Sundar Pichai reveals plans to add conversational AI features to Google’s search engine; the company is accelerating its efforts to integrate LLM and AI technology into its consumer products since the successful launch of ChatGPT.
- American Depository Receipts (ADRs) end higher this week; the S&P/BNY Mellon ADR Index is up 0.91%.
- Tata-owned Air India completes the first phase of its five-year transformation plan; makes massive investments for expanding its fleet, increasing digitalisation, and enhancing its consumers’ experience.
- Apple to launch its first Indian retail store at the Jio World Drive mall in Mumbai; the company looks to accelerate its sales and manufacturing activities in India and diversify away from China.
Taking stock | Jobs done well | Sam-sung out of tune | Google’s generating response | ADRenaline | Taxiing for takeoff | Apple’s in town | Invest wisely
Taking stock
On account of Good Friday, Wall Street wrapped up a short trading week on Thursday. For the week, the S&P 500 lost 0.1%, Nasdaq slipped 1.1%, and the Dow gained 0.6%. Stock futures and bond yields jumped after the jobs report on Friday.
Jobs done well
On Friday, the March jobs report revealed that payrolls for the month grew by 236,000. This is not only lower than the Dow Jones estimate of 238,000 but also lower than February’s revised number of 326,000. It is the lowest monthly gain since December 2020, and is good news, as the Federal Reserve’s efforts to slow labour demand and bring down inflation might finally be working.
Source: CNBC
The increase in average hourly earnings came in at 0.3%, resulting in a 4.2% 12-month increase –– the lowest since June 2021. With these numbers, everything seems to be moving in the right direction, and with more companies like Google announcing spending cuts, inflationary pressures may begin to reduce. If this continues, the coming months may be an excellent time to re-enter the stock market and increase your portfolio’s equity allocation.
Sam-sung out of tune
On Friday, in a short preliminary earnings statement, Samsung Electronics Co Ltd. estimated that its first-quarter profits would plunge by 96%, the lowest for any of its quarters since the global financial crisis of 2009. This worse-than-expected quarter is primarily due to a global slowdown in chip demand. Its estimated operating profit fell from 14.12 trillion won a year ago to 600 billion won in January-March 2023.
Samsung announced that it would be cutting its chip production significantly, and its shares jumped 4.5% in early trading as a result — the biggest one-day rally since September. This announcement is expected to support chip prices, which have fallen about 70% over the last nine months. This could help the chip industry rebound in the second half of the year. Samsung will be releasing a detailed earnings report later this month.
Google’s generating response
Google plans to integrate chat AI features into its search engine, revealed CEO Sundar Pichai in an interview. This means that users will be able to ask Google questions and receive conversational responses to their queries.
Google has long been a leader in developing Large Language Models (LLMs) and using AI systems to better understand and address complex queries. Nevertheless, it failed to get a first-mover advantage in the race to integrate such technology into consumer products: that advantage went instead to OpenAI’s ChatGPT, which was launched in November. Microsoft has already integrated a chatbot powered by GPT-3 in its Bing search engine, which helped the latter exceed 100 million daily active users in March.
Google has been criticised for sometimes playing it too safe in terms of radically altering its technology, but that makes sense, given that Google’s search business accounts for more than half of Alpahbet’s revenue. However, despite massive layoffs and spending cuts, Google has been doubling down on its AI efforts ever since the successful launch of ChatGPT.
ADRenaline
American Depository Receipts (ADRs) trading on Wall Street closed higher this week. ADRs are essentially securities that represent international stocks and allow investors in the US to invest in foreign companies just like they would in US stocks. You can read more about ADRs here.
The S&P/BNY Mellon ADR Index was up 0.91% this week and closed at 152.86. One of the most actively traded ADRs this week was British American Tobacco PLC — it rose 0.7% after news emerged about its subsidiary entering into a joint venture with Charlotte’s Web Holdings, Inc and AJNA BioSciences PBC.
Taxiing for takeoff
This Thursday, Tata-owned Air India finished the first phase of its five-year transformation plan, the Vihaan.AI mission, which was launched last September. This phase focused on tackling legacy issues and laying the foundation for a new era of growth, and thus involved some massive investments and landmark decisions. Some of these were:
- The airline added six new international routes and increased the frequency on 24 routes as part of its expansion plan.
- To support this, not only did Air India onboard 3,800 new employees, but it also placed its largest-ever aircraft order — 220 planes from Boeing and 250 from Airbus.
- It is also investing $400 million to refurbish its existing fleet and restore in-flight entertainment systems to enhance customer experience. The food menu on both its international and domestic flights has also been completely revamped.
- $200 million is being invested to upgrade the website and focus on digitalisation.
- Premium economy seats have been launched for the first time ever in certain long-haul flights to allow customers the option to fly in comfort while on a budget.
Air India will now move on to the second phase of its transformation plan, the Take-off chapter. This phase, in addition to accelerating phase one efforts, may see all of Tata Group’s airlines consolidating as well as the development of a training academy.
Apple’s in town
Apple’s first Indian retail store, years in the making, will finally be launched in Mumbai’s Jio World Drive mall. While the official date isn’t out yet, the store’s expected to open some time this month.
Given India’s rising middle class, the size of its population, and heightening US-China tensions, Apple has been looking to boost both its sales and manufacturing activities in the country. The company’s aim is to produce 25% of all its iPhones in India, and it has been investing in factories in the country accordingly. And now, with the launch of its first retail store in India, it’s also looking to expand its consumer base. Now might be a good time to buy Apple’s stock as the company is diversifying away from China and refreshing its product portfolio.
Invest wisely
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Warm regards,
Another week
in the markets
