Dear valued client,
Markets finished relatively flat this week despite Canada’s inflation rate cooling in April with a reported CPI of 2.7% (down from 2.9% in March and 2.8% in February) and is now within the Bank of Canada’s 2% target range for the fourth consecutive month. This trend suggests the BofC may begin cutting interest rates this summer, a crucial development for the Canadian economy after experiencing the highest inflation in four decades. While grocery prices have moderated, areas such as rent remain a concern, increasing 8.2% over the past year. On a global scale, 14 of the world’s 20 largest stock markets, including those in England, Japan, Brazil, India, and Canada, have recently reached all-time highs, according to Bloomberg. In the U.S., the S&P 500 is also at a record, maintaining a steady climb without a drop of more than 2% in a trading session for 311 days, marking the longest such streak in five years.
NVIDIA, the company whose chips are powering the AI revolution, reported earnings on Wednesday which surpassed expectations. Revenue and earnings surged 262% and 461% year-over-year, respectively, driven by robust demand for processing chips. This impressive performance highlights the company’s pivotal role in the burgeoning AI sector. Additionally, NVIDIA announced a 10-for-1 stock split and increased its dividend payment, signaling confidence in its continued growth. As its CEO Jensen Huang aptly put it, “The next industrial revolution has begun.”
The recent death of Iranian President Ebrahim Raisi in a helicopter crash has significant implications for Iran’s political landscape. Raisi, known for his hard-line stance and close ties to Supreme Leader Ayatollah Ali Khamenei, was a key figure in Iran’s anti-Western policies. His sudden demise is expected to trigger intense power struggles within the Iranian regime. Concurrently, The International Criminal Court’s chief prosecutor has requested arrest warrants for Israeli Prime Minister Benjamin Netanyahu and Hamas leader Yahya Sinwar on war crime charges related to Hamas’s October 7 attack and Israel’s response in Gaza. This move has faced strong opposition from both Israel and the U.S., who reject the equivalence of a democratic government and a terrorist group. Hamas criticized the exclusion of more Israeli officials and opposed the inclusion of its own leaders. The ICC judges will decide on the warrants within two months, while international reactions range from outrage to cautious endorsement, highlighting the controversial nature of this legal action.
OpenAI’s recent release of GPT-4o, featuring audio conversations with an AI chatbot, has sparked both interest and controversy. CEO Sam Altman compared the feature to the AI in the movie “Her,” though critics highlight the film’s focus on technology’s isolating effects. Internal challenges, including resignations over safety concerns, contrast with investor optimism reflected in Bank of America’s fund-manager survey. However, Scarlett Johansson was notably upset, claiming one voice in the demo resembled hers without consent. Despite OpenAI’s denial and temporary suspension of the voice, Johansson’s legal team demanded transparency, recalling her prior legal battle with Disney over contract issues. This incident adds to the broader tension between AI developers and creators over the use of their work without permission.
“I do think, in time, people will have, sort of, relationships with certain kinds of robots – not every robot, but certain kinds of robots – where they might feel that it is a sort of friendship, but it’s going to be of a robot-human kind.” – Cynthia Breazeal
Have a terrific weekend,
PW
