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INSIGHT WEEKLY: December 15, 2024

After a two week break for holidays, the newsletter is back.

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Reading time of just 5 minutes to be well informed of the need-to-know topics of our times.

🌐 Markets Overview

Major market indexes:

The tech heavy Nasdaq breaks a new record, rising above 20,000 before closing slightly closing slightly lower. India’s Nifty 50 was up 5.3% in the week, rebounding after recent falls, driven by strong IT and financial sector performance, easing global inflation, and robust domestic institutional inflows. 

All other indexes were lower in the week.

Markets v all-time high:

Magnificent 7:

Tesla continues its run by gaining another 12% in the week, as the Trump effect goes on. The stock is up 73% since Trump’s win!

Also, there is the China effect, with the sale of 21,900 vehicles in the first week of December, helped by 5-year 0% loans and around $1,400 off for loan-financed Model Y’s.

Alphabet gained 9% in the week following the news of “Willow”, its newest quantum computing chip (see AI section below).

Major Semiconductor stocks:

Broadcom gains 25% and joins the trillion dollar club as its market capitalization goes over one trillion dollars. It is now number 9 in the top 10 most valuable companies. Broadcom announced record results on Thursday with its AI business showing good growth. CEO Tan thinks that each of the three hyperscaler clients will deploy 1 million clusters of its custom AI chips called XPUs by 2025, generating between $60 billion and $90 billion in revenue over the next three years

Nvidia has pulled back recently but some analysts are still positive on the stock.

🇺🇸 US economy

Inflation as measured by CPI rose by 0.3% in November in line with expectations. It was mainly due to higher shelter costs.

Upcoming:

PCE (the preferred inflation metric of the Federal Reserve) will be released on December 20.

The next Federal Reserve meeting on interest rates is scheduled for December 17-18.

S&P500 is -0.6% in the week and +26.9% year to date.

🇬🇧 UK economy

GDP contraction in October. The economy shrank by 0.1% in October, as production output declined. September had a decline of 0.1%. Output growth in the services sector, by far the largest sector, has been flat in both months.

Interest rates are expected to be held at current levels at the next Bank of England meeting.

Upcoming:

The next Bank of England meeting on interest rates is scheduled for December 18.

FTSE100 is -0.1% this week and +7.3% in the year to date.

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🇯🇵 Japan economy

Yen depreciated against the dollar on expectations that the Bank of Japan may delay its long expected rate hike to January.

Nikkei 225 is now above its 1989 high which was achieved during the bubble.

Upcoming:

The next Bank of Japan meeting on interest rates is scheduled for December 18, 19

See previous spotlight on Japan.

🌐 Artificial Intelligence

This cover has been designed using assets from Freepik.com

Google has introduced its latest quantum processor, the Willow quantum chip, a breakthrough in its quest to advance quantum computing. Willow was tested on larger arrays of physcial qubits, and incorporates advanced features to address the challenges of scaling quantum systems, such as enhanced noise reduction and error correction. These advancements position Willow as a key step in Google’s long-term roadmap toward achieving quantum error correction, a foundational requirement for practical and scalable quantum computing.

What is a qubit? A qubit, or quantum bit, is like bits in computers as we know it. It is a basic unit of information. The difference is that a qubit has many states, whereas a bit is either 0 or 1.

The Willow chip builds on Google’s Sycamore technology with new design improvements. It connects qubits more effectively, making computations faster and reducing errors that often trouble quantum systems. The chip is also designed to test larger qubit arrays, which is essential for proving Google’s approach to creating reliable and scalable quantum computers.

A key feature of Willow is its role in testing error-correction methods using surface code, an important technique for making quantum systems more stable. Google’s researchers used the chip to run experiments that showed how well these methods work, confirming their ability to solve real-world quantum problems and supporting theories about building bigger quantum processors.

Willow also highlights Google’s focus on making quantum computing practical. The chip is part of partnerships with universities and industries to explore uses in areas like optimization, material design, and encryption.

As quantum computing becomes more practical, Willow strengthens Google’s position as a leader in this space. By combining effective error-correction methods with scalable designs, the Willow chip is helping Google move closer to creating quantum computers that can tackle problems beyond the abilities of today’s classical systems, opening doors to groundbreaking applications.

Is this a major breakthrough? Google thinks so, claiming that Willow can solve a problem in 5 minutes that would take a standard supercomputer 10²⁵ (ten septillion) years to complete which is larger than the age of the universe.

Quantum computing has come a little closer to regular use.

Google has unveiled Gemini 2.0, its latest AI model designed to push the boundaries of artificial intelligence with advanced multimodal capabilities, real-world decision-making, and faster performance. This upgraded model introduces features like native image and audio generation, better reasoning, and seamless integration with Google and third-party tools. Gemini 2.0 is already enhancing products like Google Search by handling complex queries and powering experimental projects, including Project Astra, an AI assistant integrating Search and Maps, and Project Mariner, which redefines web automation. Developers can access Gemini 2.0 through Google AI Studio and Vertex AI, with broader releases scheduled for January 2024. Committed to ethical AI, Google has implemented rigorous risk assessments and privacy controls, showcasing its vision for responsible, transformative AI technology.

Get your free guide to AI

See previous spotlight on AI chips 

🌐 Crypto Corner

Top 10 cryptos:

After the anticipation of deregulation by the incoming Trump administration, cryptos did not move much in the week, except for Cardano which lost ground after large gains in the last month.

See the previous spotlight on Bitcoin halving

🏅5️⃣ Billionaire Leaderboard

Mostly driven by stock market performance :

Change in week :

1. Elon Musk (Tesla, SpaceX) $439bn Tesla is up 76% year to date

2. Larry Ellison (Oracle)  $241bn

3. Jeff Bezos (Amazon) $218bn

4. Mark Zuckerberg  (Facebook/Meta) $214bn

5. Bernard Arnault and family (LVMH) $171bn

SPOTLIGHTS

Links to earlier spotlights :

Residential property ;

Japan ;

India - an emerging economic power ;

Recession ;

AI chips ;

Bitcoin halving ;

US National Debt ;

Gold ;

Nvidia ;

The $84 trillion wealth transfer ;

Crowdstrike issue