Finimize - 🇺🇸 US stocks' next decade

What’s going on here?

Microsoft overtook Apple as the world’s most valuable company, showing just how fast the night changes when artificial intelligence is involved.

What does this mean?

Apple has nailed steel laptops and headphones that perfectly compliment a workout outfit. Microsoft, though, has pulled ahead when it comes to the new shiny thing in tech: AI. On top of its stake into OpenAI, the firm’s funneled cash into research and development, industry partnerships, and strategic acquisitions of firms like LinkedIn and GitHub, all in the pursuit of data and AI expertise. That’s paid off: Microsoft has successfully rolled out AI solutions across its own business and turned its Azure division into the go-to cloud service for AI-curious companies. So by notching a market value of $2.89 trillion, Microsoft has tipped Apple off its long-held throne.

Why should I care?

For markets: AI’s in for a makeover.

Last year was one for the “enablers”, the creators of AI tech like OpenAI. But this one could be a showcase for adopters, the companies that use the tech in innovative ways. Microsoft has a foot in both camps, sure, but Apple’s expertise in blending hardware and software could lead to more user-friendly AI interfaces. Plus, Apple has a legion of loyal customers likely willing to try the firm’s most digitally savvy solutions. Keep an eye on any developments: any forays into AI might not be fully factored into Apple’s stock yet.

The bigger picture: Proaction is better than reaction.

The International Monetary Fund (IMF) has predicted that AI will affect nearly 40% of all jobs. And despite the promises of a fairer society, it’s higher-income and younger workers who are expected to see their wages rise most in the future job market. But you can see this as an opportunity to join the upper ranks: next time you’re twiddling your thumbs on a weekday evening, consider practicing with a new-age system like ChatGPT.

What’s going on here?

China bucked expectations by doing nothing about interest rates on Monday.

What does this mean?

China’s economy has been the poster child for the ox zodiac over the last year, proving stubborn even in the face of the central bank’s escalating stimulus. So in the pursuit of transforming the economy into the lucky dragon instead, economists expected the bank to trim a key interest rate again. But instead, the rate was held steady at 2.5%. Now, that could be because there are already signs of building momentum. But the bank may also have decided that there’s essentially no point in cutting rates further: if folk and businesses have no interest in borrowing cash and loading up with debt, then a mildly lower interest rate would probably make little difference.

Why should I care?

Zooming out: Let’s get political.

Taiwan's recent election cemented an unprecedented third term for the country’s Democratic Progressive Party. The outcome was a bolster for the country’s stocks, sending the main index within inches of an all-time high. Thing is, the party stands for a democratic Taiwanese identity that’s separate from China, so despite Taiwan’s new president vowing to improve fraying relationships between the pair, the Chinese government has made it clear that this outcome doesn’t have its vote.

For markets: Taiwan’s harboring a not-so-secret weapon.

Taiwan has an ace up its sleeve: TSMC, the world’s biggest chipmaker, makes up a third of the country’s stock market. Nvidia might have stolen investors’ attention last year thanks to ties to the artificial intelligence theme, but the American stock market darling doesn’t actually make its own superpowered chips – the likes of TSMC do. But while the chipmaker does have one plant in the US and a couple of factories in China, the bulk of TSMC’s production takes place in Taiwan. So investors may have a touch of the jitters: China’s frustrations could well escalate and interfere with the world’s chip supply.