đđ€ Google Launches Chat-GPT Competitor
Happy Sunday,
Buzz is stirring around the Fedâs fight against inflation, and while itâs not to the Fedâs target of 2%, it broadly looks like the Fed was successful in its goal of a âsoft landing.â Thatâs one of the more interesting stories this week, but this is a strong newsletter, including Googleâs GPT competitor and the new McDonaldâs alien concept coming soon.
Enjoy this weekâs Sunday Primer!
- Humphrey, Tim, & Rickie
Market Report
Google launches its largest and âmost capableâ AI model, Gemini
Google recently launched Gemini, its largest and most advanced artificial intelligence model to date, with a suite of three different sizes: Gemini Ultra, Gemini Pro, and Gemini Nano, each designed for varying scales and types of tasks.
Gemini will power Google products like the Bard chatbot and the Search Generative Experience, enhancing their capabilities in conversational-style text generation and other AI-driven tasks.
Gemini Ultra has notably surpassed human experts in the MMLU (massive multitask language understanding) benchmark, showcasing its advanced understanding and problem-solving abilities in diverse fields.
Google plans to use Gemini in various applications, from advanced customer service chatbots to content creation and productivity tools.
Google, however, has come under scrutiny following the launch of Gemini, particularly regarding a demonstration video that presented Gemini's capabilities.
The video, which showcased Gemini's ability to understand and describe images and engage in spoken conversations, was later revealed not to be a real-time demonstration but a compilation of pre-recorded responses to still images and text prompts.
Google maintains that the video was meant to illustrate Gemini's potential, emphasizing the model's advanced features, which they claim outperform GPT-4 in some benchmarks.
McDonaldâs to Launch CosMcâs, an Alien-Inspired Restaurant
McDonald's is launching a new restaurant concept in the U.S. called CosMcâs, marking a significant shift in its business model to cater to the growing demand for to-go eating.
The first CosMcâs location, opening in a Chicago suburb, will feature four drive-through lanes and a smaller format with no dining room, focusing on takeout orders.
Unlike traditional McDonald's outlets, CosMcâs will not offer the brand's signature fries and burgers but will instead have a menu centered around customizable iced drinks, such as flavored lemonades, lattes, slushes, and frappĂ©s, along with a selection of food items including Egg McMuffins, sandwiches, and snacks.
While the new format is expected to yield higher returns with fewer staff and lower operational costs, there is curiosity about how it will coexist with McDonald's core restaurants.
Markets say the battle against inflation is over â and the Fed won
Global markets are currently pricing in a belief that the battle against inflation is nearing its end, with expectations that inflation rates will return to the pre-COVID level of around 2%.
This sentiment has contributed to a significant rally in stocks, with the S&P 500 and Nasdaq composite experiencing substantial gains.
However, this perspective is partly attributed to the recent decline in oil prices, which have a notable impact on inflation expectations.
The ongoing collaboration between Russia and Saudi Arabia in attempting to stabilize oil prices remains a key factor to watch, as it could influence future market trends and inflation perceptions.
Outsize Profits Helped Drive Inflation. Now Consumers Are Pushing Back.
In the past year, extraordinary corporate profits were a significant factor in driving inflation, a trend that is now showing signs of reversal as consumers increasingly resist price hikes.
The surge in inflation was partly attributed to businesses' raising prices during the COVID-19 pandemic, leading to higher profit margins, especially in sectors like packaged goods and automation.
However, recent trends suggest a shift away from profit-driven inflation, with evidence from various industries indicating a decrease in prices and a pushback from consumers.
2023: The Year Buy-and-Hold Triumphed Over Technical Trading in the Stock Market
Despite various challenges such as Federal Reserve uncertainties, economic anxieties, and geopolitical tensions, 2023 has been a successful year for stock market investors who adopted a buy-and-hold strategy, outperforming those who used 22 different technical trading strategies.
The S&P 500 saw significant growth, reaching its highest point in late 2023 after hitting its lowest on January 5.
This trend suggests that, amidst fluctuating market conditions, maintaining investments in stocks has proven more beneficial than attempting to time the market or respond to short-term fluctuations.
This approach has been especially effective in a year characterized by a stable stock market with the smallest movement since 2017, highlighting the risk of missing out on substantial gains by reacting to short-term signals or market corrections.
Forecast Ahead
Big Number: 3.8
A new study from a Yale economics professor published in the student newspaper revealed a significant increase in grade inflation at the university, with 79% of grades awarded being an A or A- in the 2022/23 academic year.
This trend marks a sharp rise from about 40% in 2010 to approximately 58% in 2022.
Yale is not alone in this phenomenon; Harvard has also experienced a long history of grade inflation, with the average GPA reaching a peak of 3.8 in 2022. This escalating trend of awarding higher grades has led to concerns about the devaluation of academic achievements and "grade compression."