Analysts Corner: 12/05/23

Weekly Market Recap

A look back at the financial markets over the past week and a look ahead at key economic developments this week.

Source: JP Morgan Asset Management

Weekly Macro Recap

A look back at key macroeconomic and geopolitical developments that help us contextualize the current investing landscape.

Source: Luke Gromen, FFTT

Reports of AI Ending Human Labour May Be Greatly Exaggerated

In this article researchers from the ECB show that during the deep learning boom of the 2010s, occupations potentially more exposed to AI-enabled technologies actually increased their employment share in Europe. However, the jury is still out on whether the same can be expected from new developments in AI-enabled technologies. When the verdict comes in, it could be win or lose–not only for jobs, but also for equality and prosperity in Europe (and the world).

Source: European Central Bank

9 of Charlie Munger’s Best Investing Lessons and Words of Wisdom

People have been honoring the iconic investor by passing around their favorite Charlie Munger quotes following news of his death. Here are a few.

Source: Morningstar

Central Bank Digital Currency and Privacy: A Randomized Survey Experiment

Privacy protection is among the key features to consider in the design of central bank digital currency (CBDC). Using a nationally representative sample of over 3,500 participants, BIS conducted a randomized online survey experiment to examine how the willingness to use CBDC as a means of payment varies with the degree of privacy protection and information provision on the privacy benefits of using CBDC.

Source: Bank for International Settlements

Inflation Then (1979-85) and Now (2020-23): Why It’s Easier to Fight Inflation Today

The current period of inflation has been dominated by a positive demand shock and favourable initial conditions, such as low inflation expectations. This column argues that these two factors make the job of central banks today much easier than during the 1979-85 period. Provided no new disruptive shocks occur, the policies of disinflation since 2021 should lead to a swifter and much less costly path towards price stability compared to the 1970s–1980s. Monetary authorities both in the euro area and in the US should not raise interest rates too high and for too long, producing an unnecessary recession.

Source: Vox

Logistics: Global Outlook Q3 2023

Investors continue to back the structural drivers around e-commerce and evolving supply chains. But uncertainty in the economic environment and future path of interest rates is encouraging caution in the short term. Not so long ago, investors would pick up any shed they could get their hands on, but now the definition of prime is being squeezed by a shrinking pool of active buyers.

Source: GCM