Walmart Lauds AI. That's Good News for Tech Stocks. | Barron's
During Walmart’s quarterly conference call this week, management provided a real-life and very contemporary example of how the company is harnessing the financial benefits of AI. Walmart leverages AI in its supply-chain management systems and to improve its product catalog. Leveraging generative AI allows Walmart to help customers find what they are looking for and helps the company manage inventory (e.g., where to store it, and what to store). Further, the company uses large language AI models to accurately manage and use more than 850 million pieces of data to create the catalog. The benefits to Walmart associates and customers are evident in a better experience, and the financial benefits are measurable. The company states that without the use of generative AI, “this work would have required nearly 100 times the current headcount to complete and the same amount of time.”
The Weekly Five
The Northern Trust InstituteAug. 16: We had observed a relatively sharp drawdown in some of the most widely held and best-performing stocks coming into this week—the “Magnificent Seven” stocks associated with the boom in investments in artificial intelligence. One of the catalysts that many have cited as a driving force behind the selling...
Katie NixonRandom Revelations
Paulsen Perspectives
Since the pandemic, China, the longtime leader of the emerging market economic world, has been a loser. The pandemic emphasized to companies around the globe that they needed to diversify supply chains. And since China was the primary source for nearly everyone, it has lost considerable global share as companies move to diversify exposures. In addition, China’s economic growth is being challenged by its earlier one-baby policy, which has led to some of the worst current and expected demographic trends in the world. Growth has also been curtailed by the difficult aftermath of abusively overusing financial leverage in recent decades. Finally, many countries and companies now perceive China as a bad economic partner that steals technology innovations and supports the likes of Russia and North Korea.
State Monitor
The San Francisco office vacancy rate hit an all-time high of 34.5% in the second quarter of 2024, up from 33.2% in the first quarter, 28% one year ago, and just 5% before the pandemic began. The average asking rent fell to a nine-year low of $68.27 per square foot in the second quarter.The San Francisco office market is challenged on two fronts: a relative inability of companies to entice workers to return to the office and a slowdown in the tech industry that has resulted in a slew of layoffs. Indeed, tech companies have jettisoned 44,900 employees in the region since the beginning of 2022, according to Layoffs.fyi.
Pulse of the Market
We used the phrase “proceed with caution” several times before the recent pullback in the S&P 500 began and think that’s a useful thought to keep in mind—with equal emphasis on the proceed and caution parts. We are optimistic that a short-term bottom was put in place, or came close to being put in place, on Aug. 5, when the S&P 500 closed down 8.5% from its peak (within the range of a normal/healthy pullback of 5%-10%), and important technical support levels held. But we remain on guard for choppy conditions to persist and don’t rule out a growth scare (drawdown of 14%-19%, similar to the 2010, 2011, and 2015-16 pullbacks) if economic data releases continue to disappoint.
