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Threads’ engagement plummets by 70%

15th July 2023 – 21st July 2023 | Another week in the markets

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Source: MarketWatch 

Hello Saturday,

This week, Big Tech agrees to voluntary AI safeguards, Instagram Threads’ engagement plummets by 70%, and India halts exports of non-basmati rice. 

  • The White House secures voluntary AI safeguard commitments from seven leading AI companies, including OpenAI, Meta, and Microsoft, in an attempt to manage the risks posed by the rapid development of AI technology. 
  • Meta-owned Twitter rival Threads sees user engagement plummet by 70% from a launch-day peak of 44 million daily active users to 13 million; Meta will need to push out new features to retain its 100 million sign-ups.
  • To prevent rice shortages in the country and maintain price levels, India halts the export of non-basmati rice, its biggest category of rice exports. This, along with Russia backing out from the Black Sea grain deal, triggers global fears of food shortage and price spikes. 
  • AMC Entertainment scraps a pilot project charging different prices to moviegoers for different seats in theatres; this weekend, with the simultaneous release of two blockbusters, Barbie and Oppenheimer, theatres may be able to make up for a sluggish summer season. 
  • Google co-founder Sergey Brin is back at the company driving AI development; Google is working on Gemini, which is meant to be a general-purpose AI model that can compete with OpenAI’s ChatGPT. 

Taking stock | (A)I do | Coming undone | Bread basket bummer | Barbenheimer to the rescue | Bringing back Brin | Invest wisely

Taking stock

The Dow managed to notch its tenth consecutive session of gains, making it the index’s longest winning streak over almost six years. For the week, the Dow gained 2.08%, while the S&P 500 added 0.69%. The Nasdaq, however, lost 0.57%.

(A)I do 

As Big Tech companies race to outdo each other in AI development, there are global fears about the risks of AI technology and the spread of disinformation. On Friday, the Biden administration said that it had reached an agreement regarding voluntary safeguards with seven leading AI companies, including OpenAI, Meta, Google, Amazon, and Microsoft. 

These safeguards include: implementing watermarks or other ways in which consumers can identify AI-generated content, testing AI products and sharing security concerns with the government to help manage risks, and using AI tools to help society tackle challenges like climate change and developing cancer cures. 

However, it should be noted that these safeguards are voluntary commitments, and hence are not enforceable. In this context, it’s vital that governments come up with legislation upholding privacy protection and transparency in a timely manner. 

Coming undone

Two weeks ago, Meta launched its text-content-focused app, Threads, a direct rival of Twitter. The app, which allowed user sign-ups through existing Instagram accounts, saw tremendous momentum right from the start — it got 30 million sign-ups within the first 18 hours. And this high level of interest persisted for the next few days, helping Threads quickly surpass 100 million sign-ups. 

However, when it comes to apps, it’s not the number of sign-ups but the number of daily active users and the level of engagement that serve as useful measures of popularity and success. And on those two fronts, Threads seems to be struggling right now. 

Since its peak on 7 July, Threads’ user engagement has plummeted by 70% — its daily active users have dropped in number from 44 million to around 13 million. As for the average daily time spent by US users, it has dropped from 19 minutes on the day of the launch to about 4 minutes now. 

In contrast, Twitter’s daily active users number around 200 million, while the average daily time spent on it is 30 minutes. So, unless Meta works on strategic new features to keep users on Threads, it’s unlikely to kill Twitter any time soon, if ever. 

Bread basket bummer

Ever since Russia invaded Ukraine last year, the global food supply has been significantly impacted, leading to spikes in grain and commodity prices. This week, two events threatened to push food prices up even further, worsening food insecurity. First, Russia pulled out of the critical Black Sea grain deal that allowed for the export of grain from Ukraine. And second, India halted the export of its largest rice category, non-basmati rice. This is concerning at a global level, as India is the world’s biggest rice exporter, accounting for more than 40% of global rice exports

A graph on rice exporting countries in 2022 and 2023

Source: Statista 

The government has taken this step to ensure that enough rice is available in India, given the damage to crops during the monsoon season. This step is also important to keep the price of rice from rising further domestically — retail prices of rice in the country increased around 3% in the last month, and 11.5% over the last year

According to experts, countries like Thailand and Vietnam, which are the biggest exporters of rice after India, cannot make up for the global shortfall with their existing inventories. The ban, effective from 20 July, is expected to impact African buyers the most, along with Bangladesh, Nepal, and Guinea. 

Barbenheimer to the rescue

In February, AMC Entertainment launched its “Sightline” program, which involved charging different prices for different seats in theatres. This program was initially launched in three US markets, and was meant to be rolled out nationwide by the end of the year; however, it has now been scrapped. 

This decision was taken because the pilot program revealed that moviegoers preferred opting for the seats of their choice even if the cost was higher, and had little to no interest in the front row, despite reduced prices. The movie theatre industry has had a sluggish summer blockbuster season this year — however, with the hype around the release of Greta Gerwig’s Barbie and Christopher Nolan’s Oppenheimer this weekend, the industry has one last chance to make up for the summer. 

And the industry might just get what it wants: ‘Barbenheimer’ has become a viral internet trend, and people around the world are excited about the simultaneous release of two blockbuster movies in such highly contrasting genres. The two movies combined are expected to exceed $260 million in global box office receipts. 

Bringing back Brin

Google co-founder Sergey Brin stepped down from an executive role at parent company Alphabet in 2019, and has simply been a board member and the second largest shareholder ever since. Now, however, it seems that Brin is back at Google driving AI development. 

Back in December, when CEO Sundar Pichai issued a code red after the launch of ChatGPT, Brin and fellow co-founder Larry Page, were reportedly called on for support. Since then, Brin has been working closely with researchers to develop Gemini, a general-purpose AI model that can compete with OpenAI’s ChatGPT. The project is being led by Demis Hassabis, CEO of Google DeepMind. 

Invest wisely 

Barbie is one of Mattel’s most popular toy brands, so it’s no surprise that Mattel stock went up by over 17% in the past month in anticipation of Greta Gerwig’s Barbie. But it’s not just Mattel stock that’s expected to benefit from this global blockbuster — AMC Entertainment, GAP, Crocs, and many other retail stocks are also expected to get a boost.

Since such investment opportunities are time-sensitive, it’s crucial to have easy and quick access to global markets so you can capitalise on them promptly. And with Appreciate, you can enjoy seamless investing in the US stock market to maximise your portfolio gains. Download the app today!

Warm regards,
Another week
in the markets

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