July 17, 2024

The Appetizer

We’re on a roll. This week’s Stifel Bits is again being brought to you by our CIO Office summer interns. Enjoy!

“AI is clearly going to be a part of restaurant automation and efficiencies going forward, but the technology is still in its infancy.”

• David Henkes, Senior Principal and Head of Strategic Partnerships at Technomic, in response to McDonald’s recalling drive-thru AI.

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

• 7.5%: The percentage decrease in blood flow to the brain when wearing a tie according to a new study.
• 375,000: The amount of LEGO bricks an ordinary plastic LEGO brick can support before it fails.
• 378: The number of days four NASA volunteers spent confined to a 3-D printed Mars habitat at Johnson Space Center in Houston.
• 68%: The increase in rents in Barcelona over the past ten years due to mass tourism.
• $158,000: The cost of a basic four-story elevator in New York City.
• 58: The number of hot dogs that Patrick Bartlett ate in 10 minutes to win this year’s Nathan’s Famous Hot Dog Eating Contest.

Dig In
Running of the Bulls

Spain’s running of the bulls is a summertime festival that’s like a game of tag, but with bulls and a lot more adrenaline. It’s a little bit of a metaphor for the stock market as well. Just as the runners must anticipate and respond to the bulls’ unpredictable movements, investors chase returns amid volatility and potential setbacks. More importantly, there is no winner in each. This dynamic is a reminder of the importance of vigilance and strategy in both arenas.

In finance, a bull market signifies a period of rising asset prices and investor optimism, much like the current one. Stop us if you’ve heard this before, but the S&P 500 has reached a record high this year. While the economy remains strong, a lot of the rise is because of AI optimism surrounding the big cap technology names.

Last week was a bit of a reminder that what goes up must come down or that all good things must come to an end. It may be siesta time for some stocks, as last week we saw a rotation from big tech to previously out-of-favor and highly rate-sensitive sectors. Our most recent Sight|Lines discussed the potential for both a bond market and stock market rotation, and why some actions may be warranted, while others may not.

Weekly Specials

Michael Bloomberg gifted $1 billion to Johns Hopkins University, allowing two-thirds of its students to attend its prestigious medical school for free. Just as many students will now be looking into attending Hopkins thanks to Mr. Bloomberg, I will now be looking into Mr. Bloomberg to see if he has some spare cash to donate to me.

Three million passengers passed through U.S. airport security on the Sunday after the Fourth of July holiday. This serves as a reminder that planes will continue to be packed like sardines and complaints will likely soar higher. First, it was slow refunds in 2020, and now it’s full planes … it seems like this year the Transportation Department will have to scramble, yet again, to address even more than the nearly 97,000 complaints recorded in 2023.

It was a smashing weekend for Spain. Carlos Alcaraz aced Novak Djokovic in straight sets at Wimbledon, while Spain won the Euro 2024 championship. After a fashionably late start in Miami (because who can control a crowd when there’s soccer involved), Argentina beat Colombia to win its 16th Copa America title. Each nation has now become the MVP in their respective competitions.

Corporate Lunch

Elon Musk dodged a $500 million lawsuit claiming he stiffed Twitter employees on severance, proving even legal battles can be rocket science.

Amazon.com fine-tuned its AI products like a high-tech sous chef, serving up incremental improvements that are just AI-mazing.

Microsoft waved goodbye to its OpenAI board seat, leaving regulators to debate who gets the last byte.

Samsung launched the Galaxy Ring on Wednesday, blurring the line between smart tech and marital status. Now you can say “I do” to sleep tracking!

UiPath is trimming jobs like a hedge in need of a haircut. Looks like it’s trying to automate its way out of this one!

McDonald’s introduced a garlic dipping sauce that’s got fans reaching for mints faster than you can say, “extra fries, please!”

Walmart is set to open five new automated distribution centers aimed to make grocery shopping faster than checking out at a self-service lane. Just don’t get caught in the express lane with a full cart!

Saks Fifth Avenue parent HBC’s acquisition of Neiman Marcus is like a high-end shopping spree – but will it come with a loyalty rewards card?

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.