David Ross

What I think I learned last week #30

The big news hitting the wires at the end of the week were reports of Walmart talking of buying US health insurer Humana, who has a market cap of $37 billion. This continues the overhaul of the US health market prompted by fears of Amazon disrupting the industry.

After suffering its worst week in two years, on Monday, US stocks staged their best day in 2½ years as the Dow Jones Industrial Average saw its third-biggest point gain ever with a 669 point rise. And then it fell again.

Since the January 26 high point, the S&P 500 index has lost $2.34 trillion in market capitalization, meaning that 37% of the post-Trump gains in US market cap have been erased during the current market pullback.

The S&P 500 had its first quarterly loss since 2015, falling 1.2%, but oil had its third straight quarterly rise with a positive 7.7% move.

JPMorgan, working closely with Amazon on several ventures, is now bringing Amazon’s Alexa to Wall Street trading floors. Alexa is able to send analysts’ reports and related queries, and the bank is testing other features, like providing prices on bonds or swaps, according to David Hudson, global head of markets execution for JPMorgan.

Alexa is gradually becoming the next big computing platform. Capital One Financial allows customers to manage credit card and bank accounts through the voice assistant, and the lender has slowly expanded its Alexa service, allowing people to ask questions like how much they spent on Amazon last week. New York Life will start rolling out Alexa features to its 12,000 agents later this year to help them get quick details on policies and prepare for meetings, said Mark Madgett, who leads the insurer’s field force of agents. That means the agents can ask Alexa to figure out how much life insurance a customer has or the value of those policies, or to catch them up on the latest products the firm is offering, he said.

Amazon also signed a distribution deal with French retailer Casino Group to put groceries from their Monoprix group on the Amazon Prime Now App.

The oldest gun manufacturer in the US, Remington, filed for bankruptcy. They never really had a shot.

The world’s second largest clothing retailer, H&M, is hanging by a thread as it saw its stock price drop to levels not seen since 2005 as weak sales and a huge inventory overhang hurt performance.

The EU is out of money, so after desperate attempts to raid the coffers of successful US technology companies, it is now considering invading the European central bank vaults to help plug its budget deficit. This is right out of the Argentina bankruptcy & economic desperation playbook.

Equbot, the firm behind the $140 million AI Powered Equity ETF (AIEQ) that launched last year, is looking to roll out a non-U.S. version of the artificial-intelligence-driven fund that targets developed markets. The proposed fund, like its predecessor AIEQ, is actively managed and will use natural language processing via IBM’s Watson supercomputer to review millions of pieces of data on daily basis to identify between 80 and 250 companies that it “thinks” will outperform over the next 12 months.

A couple of recent studies by Bain Consulting and the Bank for International Settlements have concluded that increasing levels of automation will lead to higher real interest rates, creating market and economic stresses. For me, I want automation to reduce stress levels, not increase them.

Here is a case of automation not quite working out: Customs officers in southern China’s technology hub Shenzhen busted a group of criminals using drones to smuggle 500 million yuan ($79.8 million) worth of smartphones from Hong Kong to Shenzhen.

And that’s what I think I learned last week……