AI Hits The Mainstream And January Jobs Report Beats Expectations

TL;DR

• AI has hit the mainstream in a major way, and Big Tech are tussling for their spot at the top of the pile
• This week saw Microsoft’s integration of ChatGPT into their Bing search engine hit the public, and Google’s competitor product Bard was announced and released to private testers
• Despite continued layoffs across the tech sector, the January jobs report was a total knockout, smashing analyst forecasts and bringing the unemployment rate to its lowest level since the Summer of ‘69 (seriously)
• Top weekly and monthly trades

Subscribe to the Forbes AI newsletter to stay in the loop and get our AI-backed investing insights, latest news and more delivered directly to your inbox every weekend. And download Q.ai today for access to AI-powered investment strategies.

Major events that could affect your portfolio

The AI wars are here. OpenAI released its AI chatbot, ChatGPT, in November last year and it’s since hit 100 million users and become the fastest growing consumer application ever. That’s faster than Instagram, faster than TikTok and even faster than Pokémon Go (remember that?).

The natural language processing program has the ability to answer questions and provide outputs as varied as recipes, usable code, explanations of quantum physics and how best to train a labrador. While it’s not without its shortcomings, users have been impressed with its abilities.

And it’s not just consumers. Microsoft was an early investor in OpenAI, and they recently doubled down on that investment with a further $10 billion capital injection.

This will see ChatGPT technology built into various Microsoft products, including their much maligned Bing search engine and everyone’s favorite video conferencing platform, Microsoft Teams.

None of this has happened in a vacuum. The arrival of ChatGPT has been the first real challenger to Google’s search domination in years. Clearly, they’ve been spooked, as they have rushed to release their own AI chatbot called Bard.

Google has had this sort of AI capability for some time, but using it as a separate, consumer facing bot, rather than as part of their search engine interface, is something new. And if we’re honest, it feels pretty reactive.

The markets thought so too, with Goggles underwhelming Bard presentation (including a factual error) caused their market cap to plunge by $100 billion.

Regardless, given the companies involved and the money at stake, this isn’t likely to be a war that ends any time soon.

—

Look, layoff talk is everywhere. You’re probably reading about it almost every day. But we can’t not talk about the job market right now. Mainly because in many ways, it’s just plain strange at the moment.

Almost all the coverage of the labor market that we’ve seen in 2023 has been about the massive layoffs in the tech sector. And there’s a reason for that, because it’s a major story. We’ve covered it a lot, and there are some important factors to watch for investors.

But here’s the thing.

Overall, the job market is actually very, very good. In fact, the January jobs report that came out late last week showed that the unemployment rate is at its lowest level since 1969 at 3.6%.

Let that sink in for a minute.

The last time the job market was this tight was the same year that Neil Armstrong stepped on the Moon, 400,000 people attended Woodstock and J-Lo, Jennifer Aniston, Matthew McConaughey and Mariah Carey were just being born.

Not only did the January jobs report show the record low unemployment rate, but an additional 517,000 jobs were added against analyst forecasts of 187,000 jobs.

It highlights the challenge for the Fed in keeping inflation down, as a hot job market usually aligns with rising prices. But it’s also some cause for optimism that they may be able to continue to raise interest rates without plunging the country into a recession.

This week’s top theme from Q.ai

Amid all the commotion around layoffs and AI, crypto has been quietly having a bit of a moment too. Unusually for the sector which is usually all about rockets and diamond hands, Bitcoin has steadily been gaining value since the beginning of the year, with very little fanfare to accompany the price rises.

Since the beginning of 2023 the price of Bitcoin has increased from $16,547 to back over $21,000, hitting a peak of over $24,000 in early February. All in all that’s a gain of just over 30% since the start of the year.

And it’s not just Bitcoin.

Ethereum is also up over 27%, increasing from $991 back on January 1st to hit a peak of almost $1,400, before falling back to $1,261 at the time of writing.

So does that mean the crypto bull run is back on?

Not necessarily, particularly given that this year has seen further layoffs in the crypto sector, including from major players such as Coinbase and Gemini. However, it’s a promising sign that suggests that despite some prominent cynics such as JPMorgan CEO Jamie Dimon stating that Bitcoin is a “hyped-up fraud”, crypto winter might not last forever.

If you want to get in while prices are still low, our Crypto Kit uses the power of AI to make your investment decision for you. The Kit gains exposure to coins and tokens like Bitcoin, Ethereum and Chainlink through the use of crypto trusts and automatically rebalances the Kit each week based on its price predictions.

Top trade ideas

Here are some of the best ideas our AI systems are recommending for the next week and month.

Oaktree Speciality Lending (OCSL) – The finance company is one of our Top Buys for next week with an A rating in Low Momentum Volatility. Revenue was up 17.2% in 2022.

The Azek Company (AZEK) – The outdoor living products manufacturer is our Top Short for next week with our AI rating them an F in Quality Value, Growth and Low Momentum Volatility. Earnings per share are down -66% in 2022.

TTM Technologies (TTMI) – The circuit board manufacturer is our Top Buy for next month with an A rating in Quality Value and a B in Low Momentum Volatility. Revenue was up 6.8% in 2022.

Berkshire Grey (BGRY) – The AI and robotics company is our Top Short for next month with our AI rating them a D in Low Momentum Volatility and a C in Quality Value. The company lost over $100 million in 2022.

Our AI’s Top ETF trade for the next month is to invest in healthcare stocks, large cap Chinese stocks and the US stock market, and to short India and the US dollar. Top Buys are the iShares China Large-Cap ETF, the Invesco DWA Healthcare Momentum ETF and the Vanguard Total Stock Market ETF and Top Shorts are the iShares MSCI India ETF and the Invesco DB US Dollar Index Bullish ETF.

Recently published Qbits

Want to learn more about investing or sharpen your existing knowledge? Qai publishes Qbits on our Learn Center, where you can define investing terms, unpack financial concepts and up your skill level.

Qbits are digestible, snackable investing content intended to break down complex concepts in plain English.

Check out some of our latest here:

Download Q.ai today for access to AI-powered investment strategies.