Dear valued client,
Markets posted another week of gains as the U.S. inflation rate slowed for the sixth consecutive month to 2.4% in September (compared to 2.5% in August and 2.9% in July), its lowest level since February 2021.
Hurricane Milton, the second major storm to hit Florida in two weeks, made landfall near Siesta Key as a Category 3 hurricane, bringing heavy winds, torrential rain, and widespread destruction to the state’s west coast. Initially a Category 5, the storm weakened before bringing over 40 centimeters of rain to St. Petersburg, leaving three million residents without power and causing at least 10 fatalities. The storm inflicted up to $75 billion in damages, toppling a construction crane and destroying the roof of Tropicana Field where the Tampa Bay Rays play. The disaster has also worsened Florida’s housing crisis, with rising insurance rates deterring potential buyers.
The U.S. federal deficit reached $1.8 trillion last fiscal year, marking the largest deficit in three years, according to a Congressional Budget Office report. This spike was driven by increased spending on programs for older Americans and a 34% rise in interest payments on the national debt (now over 34 trillion… with a “T”), which amounted to $950 billion—surpassing the Pentagon’s entire budget. Typically, deficits grow during economic downturns, but the current large deficit, despite a strong economy, is concerning for budget analysts.
Geoffrey Hinton, often called the “godfather of AI,” was awarded the Nobel Prize in physics alongside John Hopfield for their pioneering work on neural networks, which form the foundation of modern artificial intelligence like ChatGPT. Despite this honor, both scientists have expressed concerns about the rapid development of AI. Hinton, who left Google earlier this year, now advocates for slowing down AI advancement due to fears that highly intelligent systems could eventually surpass human control. Similarly, Hopfield has warned about the potential dangers of AI, comparing it to powerful technologies like nuclear energy. Despite his concerns, Hinton still uses AI, acknowledging its usefulness while remaining cautious of its limitations.
Elon Musk has unveiled Tesla’s long-awaited robotaxi, dubbed the Cybercab, at an event in Burbank, California. The autonomous vehicle, which lacks a steering wheel and pedals, is expected to hit the market by 2026 with a price tag of under $30,000. Tesla also revealed a Robovan, a 20-seater autonomous vehicle designed for both personal and commercial use. As Tesla faces increasing competition in the electric vehicle market and its stock down 40% from its 2021 high, Musk is staking the company’s future on self-driving technology and artificial intelligence. Despite competition from companies like Waymo and GM’s Cruise, Tesla hopes to gain an edge with its large fleet of data-collecting vehicles and more affordable technology. However, the company still needs regulatory approval to operate these vehicles on public roads, and questions remain about safety, operations, and profitability. Investors await clearer answers on these issues.
“Sometimes I just don’t understand human behavior.” – C-3PO
Have a terrific Thanksgiving weekend,
PW
