Amoroso suggests buying the AI dip. Roth discusses the cooling of the labor market. Nathanson talks about the Disney, Charter Communications standoff. Haque says oil at $90 a barrel is significant. Tannebaum says the US is still calibrating how to respond to China.
Investing in AI is seen as a way to maintain and boost profit margins in low-margin sectors like retail.
The increased focus on AI investments is expected to have different implications across sectors, potentially leading to job losses and a divergence between industries.
Deep dives
Boosting AI Investments in the Business World
Many CFOs, CEOs, and chief technology officers are racing to increase investments in artificial intelligence (AI) in order to boost productivity and preserve their bottom line. This growing interest in AI is driven by the potential for automation and robotics to replace labor, particularly in low-margin sectors like retail. Investing in AI is seen as a way to maintain and boost profit margins. The preference for AI investments is expected to continue in the coming years, as more businesses prioritize this technology to stay ahead of their competitors.
Implications of AI on Different Sectors
The increased focus on AI investments is expected to have different implications across sectors. Low-margin sectors like retail may face challenges in the long term, as AI and automation have the potential to replace labor and reduce costs. However, in the near term, sectors that prioritize AI investments are likely to benefit. This could lead to a divergence between industries that embrace AI and those that do not. It may also result in job losses, particularly in positions such as cashiers, as more repetitive tasks are automated.
Inflation and the Role of AI
Investing in AI is seen as a means to address the current inflationary challenges driven by labor supply shortages. By implementing AI technologies, businesses hope to boost productivity and reduce labor costs, which can help alleviate inflationary pressures. The adoption of AI is driven by the desire to preserve profit margins amidst a labor shortage. The fear of missing out (FOMO) on AI investments is pushing more and more IT managers to invest in AI to stay competitive in the market.
Impact of China-US Relations on Investments
The escalating tensions between China and the United States are causing uncertainty for corporations and their investments in China. While some companies consider diversifying their supply chains as a risk management strategy, others are not pulling back entirely. The actions of both countries, including trade restrictions and bans on certain technologies, are creating challenges for businesses navigating these complexities. The ongoing tit-for-tat measures and potential restrictions on foreign direct investment highlight the need for companies to assess their exposure and risks in relation to China.
Anastasia Amoroso, iCapital Chief Investment Strategist, suggests buying the AI dip. Stephanie Roth, J.P. Morgan Private Bank Senior Markets Economist, says it's been a pretty impressive cooling of the labor market over the course of this year. Michael Nathanson, SVB MoffettNathanson Senior Research Analyst, discusses the Disney, Charter Communications standoff. Kona Haque, ED&F Man Head of Research, says oil at $90 a barrel is "significant" as it pushes the whole commodity index higher. Daniel Tannebaum, Oliver Wyman Global Anti-Financial Crime Practice Leader, says the US is still calibrating how to respond to China. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance