Updated: Powell At Noon

Good Morning Everyone!

The AI chatbot race takes off with competition heating up between:

- ChatGPT (OpenAI & Microsoft)

- Bard AI (Google)

- Ernie (Baidu)

Who will win?

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Prices as of 4 pm EST, 2/6/23; % YTD

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MARKET UPDATE

Tonight U.S. State of the Union

12 p.m. Fed Jerome Powell speaking

• February 1 hike 25 basis points 4.50%-4.75%

• March 22 hike 25 basis points 4.75%-5.0%

• May 3 hike or pause? 5.0%-5.25%

U.S. 30-year mortgage rates

• Down almost 1% from its high but

• Well above the 3% range from a year ago

Crude 75 +1.7%

• Impact of the earthquake in Turkey and Syria & shutdown of Johan Sverdrup

Google GOOGL

• Testing their new AI service

• Plans a broader public launch in coming weeks

• New search engine to combat ChatGPT

• 1 p.m. today Microsoft MSFT to highlight Bing/ChatGPT combo

Earnings

• Activision Blizzard ATVI +3% will Microsoft get approved to buy ATVI, $95 offer vs. $74 stock

• Simon Property SPG flat EPS in-line, occupancy rate 94.9%, guide light

• Pinterest PINS flat Q4 weaker, Q1 guide weaker, focus expense efficiency

• Take-Two Interactive TTWO flat EPS miss, guide cut, cautionary purchasing behavior

• BP BP +5% increased dividend and extended the buyback   

• Fiserv FISV +3% EPS in-line, guide better than street

• KKR KKR +1% $0.92 distributable earnings vs $1.59 year ago, $500B assets

• Centene CNC flat modest topline beat, guide in-line

• Carrier CARR -4% in-line, orders down 10% as expected, guide in-line

• DuPont DD +1% in-line, Q1 guide light similar to other chemical companies

• Royal Caribbean RCL +4% loss better than expected, structural cost increases

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CRYPTO UPDATE

Digital Currency Group (DCG)

• Selling shares in top funds at steep discounts

  • Including Grayscale (its asset management business)

• Seeking to raise capital to pay Genesis (its lending arm) creditors

  • Owes +$3 billion

Digital asset fund flows

• 4th consecutive week of inflows

  • $76 million

• YTD inflows = $230 million

  • Total AUM +39% ($30.3 billion)

• Bitcoin 90% of flows ($69 million)

• $8.2 million to short-Bitcoin products

• Rest of flows muted