November 8, 2023

The Appetizer

“… because I got a puppy”

• Adam Wainwright, St. Louis Cardinals pitcher, listing the reason for his retirement on the paperwork he submitted to Major League Baseball, wrapping up an 18-year career.

Now, on to the numbers. Drum roll, please …

• 9%: The percentage of Americans that do not own a single physical book. On the other hand, 3% own more than 1,000 books.
• 8 feet: The wingspan of 7’4” NBA rookie and San Antonio Spurs player Victor Wembanyama.
• 40: The number of national elections taking place worldwide in 2024.
• 3.9%: The U.S. unemployment rate for October.
• 1.9 million - 2.7 million: The estimated number of students in the U.S. being homeschooled.

Dig In
EV Check-In

Did you ever think that “too many” and “electric vehicles” (EVs) would be used in the same sentence? Surprisingly, there’s an oversupply of EVs, leading to constant price slashes and some companies putting the brakes on their EV ambitions. The question of blame isn’t straightforward, but let’s start with China.

In mid-2010s, the Chinese government offered subsidies (aka free money) to companies that make electric cars. This sparked a gold rush, and at its peak there were roughly 500 electric car companies in China. 500!

With supply far exceeding demand, some of these cars remained unsold, creating EV graveyards, while thousands found their way to Europe. Chinese automakers today make up more than 8% of Europe’s EV market, up from almost nothing in 2019.

On the one hand, this is a win for Europe, as the economic bloc has set an ambitious goal: all new cars sold must have zero CO2 emissions by 2035. However, Europe has its own automotive industry that employs millions of workers, and they’re not happy with someone else stealing their turf. The transition to EVs still has a ways to go, but a yearly check-in is needed, especially for our long-term investment themes.

Weekly Specials

Virtual reality is revolutionizing the world of sports as the NBA and NHL are creating immersive “shared reality” domes set to debut in the spring of 2024. These 65,000-square-foot venues will seat 800 fans who will be able to watch live games in an immersive experience that mirrors being in a game.

“AI” was named the word of the year by the Collins English Dictionary. Defined as “the modeling of human mental functions by computer programs,” it keeps pace with the “ever-evolving language.” “AI” is a bit more intellectual than 2014’s “Photobomb” or 2017’s “Fake News.”

Saudi Arabia is becoming the ultimate sports destination, or at least it’s trying to. After it spent more than $900 million over the summer to lure Cristiano Ronaldo, Neymar, and Karim Benzema to its pro soccer league, the country just secured a bid to host the 2034 FIFA World Cup. Oh, and let’s not forget the PGA Tour merged with Saudi-backed rival LIV Golf.

A team of JPMorgan researchers tried to see if ChatGPT can pass the finance industry’s Chartered Financial Analyst (CFA) exam. It turns out the test might be a little too much for its circuits to handle.

Corporate Lunch

LVMH Moët Hennessy Louis Vuitton agreed to buy L.A.-based eyewear maker Barton Perreira as part of its push for mass-market appeal. This is based on studies that one of the first purchases aspiring luxury consumers make is eyeglasses.

Amazon said it’s closing its physical clothing stores and shifting its focus back to the virtual runway.

Sesame Street will be revamping its format as the series enters its 55TH season and the Max streaming deal comes to an end. Don’t worry, Elmo is sticking around, the bird is still big, and Oscar is still mad for no reason; the structure will just be more story driven.

Microsoft released a software update with an AI assistant called Copilot. Clippy 2.0 is here!

WeWork is expected to file for bankruptcy soon as high borrowing costs hurt the commercial sector and too many people are still working from home.

McDonald’s and Chipotle said they will raise their menu prices next year as California is set to raise the state minimum wage for fast-food workers to $20 per hour.

Diversification does not ensure a profit or protect against loss.

Indices are unmanaged and are not available for direct investment.

The Standard & Poor’s 500 Index is a capitalization-weighted index that is generally considered representative of the U.S. large capitalization market.

Past performance is not indicative of future results.