Happy Thanksgiving!

Thoughts of the Day

On this US holiday, gratitude is key in both life and trading. Amid regrets for missed opportunities, remember the beauty of markets—new chances always emerge. During major holidays, reduced trading volumes call for sizing trades appropriately. Investors who change their bearish views may postpone allocating their sidelined cash because holiday conditions.

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Day Ahead

The revised print for the University of Michigan Consumer Sentiment (60.5 exp, 63.8 prev) and inflation expectations for the year ahead (4.4% exp, 4.2% prev) will be released.

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What Happened Yesterday

Market Movements as of New York Close 22 Nov 23
  • The weekly jobless claims for the week ending on 18 Nov slipped to 209k (vs 225k expected) from 233k the week before (revised from 231k). Continuing claims for the week ending on 11 Nov slid to 1,840k from 1,862k (revised from 1,865k).
  • The revised print for the University of Michigan Consumer Sentiment  came in at 61.3 (vs 60.5 exp and 63.8 prev) while the inflation expectations for the year ahead ticked higher to 4.5% (vs 4.4% exp and prev – revised from 4.2%)
  • The US Treasury Yield curve inversion widened slightly to 0.47% as the US 2-year bond yield rose +0.03% to 4.89% while the US 10-year bond yield rose +0.01% to 4.42%.
  • The US stock futures traded within a small range through the Asian trading hours. It then started to experience some upward momentum in the London trading session after Sam Altman was reinstated as the CEO of OpenAI.
  • The US stock market opened lower from Tuesday. It experienced a whipsaw in the early hours with the release of the UoM data. However, the volatility subsided and the market started to trade sideways through the rest of the session. Consequently, the S&P 500 closed +0.41% higher (high: +0.67%, low: +0.15%), the Dow Jones increased +0.53% (high: +0.65%, low: +0.19%) while the Nasdaq rose +0.43% (high: +1.17%, low: +0.19%).
  • The crypto market recovered as investors are speculating that the SEC approval of the Bitcoin ETFs may come sooner now that the Binance lawsuit has come to an end. Bitcoin jumped +4.58% while Ether soared +6.73%.
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Headlines & Market Impact

A growing number of tech execs think AI is giving Big Tech ‘inordinate’ power

Notable Snippet: Tech execs have voiced concern that the development of artificial intelligence is concentrated in the hands of too few companies, potentially giving them excessive control over the rapidly evolving technology.

“Right now, there are only a handful of companies with the resources needed to create these large-scale AI models and deploy them at scale. And we need to recognize that this is giving them inordinate power over our lives and institutions,” Meredith Whittaker, president of encrypted messaging app Signal, told CNBC in an interview last week.

“We should really be concerned about, again, a handful of corporations driven by profit and shareholder returns making such socially consequential decisions.”

Jimmy Wales (the founder of Wikipedia) pointed to a leaked Google memo this year in which a researcher at the U.S. tech giant said the company has “no moat” in the AI industry, referring to a threat from open-source models. These are AI models that are not owned by a single entity, such as Google or Microsoft, and instead can be developed and added to by anyone. These could potentially see the creation of competing AI applications without the massive amount of resources it currently takes.

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Sam Altman to return as OpenAI CEO after his tumultuous ouster

Notable Snippet: Sam Altman is returning as CEO of OpenAI just days after his ouster, capping frenzied discussions about the future of the startup at the centre of an artificial intelligence boom.

The ChatGPT maker also unveiled a new initial board with former Salesforce co-CEO Bret Taylor as chair and Larry Summers, former U.S. Treasury Secretary, and Adam D’Angelo as directors. D’Angelo was part of the original board that had dismissed Altman.

The return of Altman could potentially usher in a new era for the startup which had long juggled concerns among staff about AI’s dangers and its potential for commercialization.

Analysts said the reshuffle will favour Altman and Microsoft (MSFT.O), which has pledged billions of dollars to the startup and is rolling out its technology to its customers globally.

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Binance sees $956 million in outflows after Zhao steps down to settle US probe

Notable Snippet: Investors pulled about $956 million from crypto exchange Binance over the past 24 hours after its chief, Changpeng Zhao, stepped down and faced prison time after pleading guilty to settle a years-long U.S. illicit finance probe.

Data from crypto analytics platform Nansen, which does not include bitcoin flows, signalled some investors had been rattled by the news and pulled assets from the exchange. Still, well over $65 billion of assets remain on the platform, according to Nansen.

“Binance has seen significant exchange outflows since the announcement, but relative to their total holdings, it’s quite small,” Nansen analysts said.

By comparison, investors pulled around $1.43 billion from the crypto exchange and its U.S. affiliate in June after the U.S. Securities and Exchange Commission sued the companies.

Among its alleged crimes, Binance failed to report more than 100,000 suspicious transactions including with organisations the U.S. described as terrorist groups – Hamas, al Qaeda and the Islamic State of Iraq and Syria, authorities said.

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Best,
Phan Vee Leung
CIO & Founder, TrackRecord