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Critical mass

Greetings from…somewhere. As I mentioned the other week, I’m taking a few weeks off. It’s the first time off I’ve had this year and the most consecutive…

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Greetings from…somewhere. As I mentioned the other week, I’m taking a few weeks off. It’s the first time off I’ve had this year and the most consecutive days I’ve taken off in 15+ years of being a tech journalist. It’s been a hard/weird last few years, and burnout has a way of sneaking up on you while you’re not looking.

I’m trying to ignore the creeping sense of guilt about not doing a couple of proper year-end newsletters this time out. I’ll be back right after the Christmas break, though, and we can debrief on 2022 then, just as we ease into full freak-out mode pre-CES (the level of real robotics news at what is ostensibly a consumer show always feels like a bit of a crapshoot).

I also have some passing thoughts about the need for more focused robotics journalism out there that I’ve been wanting to get down on paper. That’s not to say there aren’t good people out there doing good work. But there’s a lot more that needs to be done to mainstream coverage. Apologies for pasting some thoughts over from LinkedIn. If you read those posts, feel free to skip the next couple of grafs. Consider this a minor manifesto of sorts.

Quoting myself here (I know, I know):

If you run a robotics startup and want coverage, come ready to answer difficult questions. Categories like crypto have been done a disservice by some breathless coverage. It’s our job to ask some hard and sometimes uncomfortable questions.

A good investor will have already prepared you for some of them, like market fit and ROI. Even seemingly simple questions like “Why does this need to exist?” and “Why are you the right person/team to execute it?” can be difficult for many founders to answer.

They shouldn’t be. You should be asking yourself these questions every day. If you can’t find meaningful answers, you might not be the right person for the job. Accepting that and pivoting isn’t failure. Ignoring it and carrying on ultimately might be, however.

I’ve been genuinely surprised that more major publications aren’t investing in robotics coverage. Now is the time to starting building coverage of robotics/automation. The category has largely been done a disservice, as it’s been more of an afterthought. I got my start writing about gadgets (it’s still a big part of my role at TechCrunch), so I completely understand the impulse to fall back on Skynet and Black Mirror jokes, rather than having a nuanced conversation.

But questions about ethics, automation/labor and the like are important to bake into these conversations. Asking difficult questions isn’t combative. It’s not doing the industry a disservice (unless said industry can’t stand up to scrutiny). It’s an important part of growing. Otherwise one day you wake up and have a Theranos or FTX on your hands.

Sometimes these things are scams from the outset, but oftentimes it’s the product of someone who believed in their mission, but ultimately didn’t get enough pushback along the way and began believing their own lies.

Asking the right questions comes with being immersed in a topic. Knowing the lay of the land, talking to the right people and finely honing your BS detector. I’m not here to be anyone’s cheerleader, but I’m also not in the business of criticizing for criticism’s sake. Coverage should reflect the product and the people who make it — for better and worse.

All right, that’s enough bloviating from me for a while. For the next couple of weeks, I’m leaving you in some very capable hands. We’ve got some insight from some very smart folks in the space. Coming up over the next couple of weeks are PlayGround Global’s Peter Barrett and UC Berkeley’s Ken Goldberg.

Q&A with Joyce Sidopoulos

Image Credits: MassRobotics

Today we’re kicking things off with MassRobotics’ chief of operations, Joyce Sidopoulos, who was also a great help for my recent trip to Boston. See you on the other side.

TC: What was the biggest robotics story of 2022? 

JS: There are a number of stories that are changing the landscape of the robotics industry, such as Hyundai’s announcement of a $400 million AI and robotics institute powered by Boston Dynamics, but one of the most impactful stories is Amazon’s acquisition of iRobot.

What are your biggest robotics predictions for 2023?

The adoption of robotics will continue to grow at a rapid pace, in spite of, or possibly due to, the predicted economic downturn. The last few years have proven the worth of many robot systems, such as those used in warehouses.

How profound of an impact has the pandemic had on robotics?

Very. The pandemic highlighted the value that robotics can provide, and spurred on more development and commercialization. The pandemic led to the realization that domestic manufacturing needs help and our supply chain is broken, areas which robotics can help solve. Industries began to adopt collaborative robots to help with workforce shortfalls and that will continue.

How much of an impact has the macroeconomic environment had on robotics investing?

We are definitely seeing that it is taking startups longer to raise rounds, but so far there are funds still available. MassRobotics recently held an investor demo day for about 30 of our startups and we had a great turnout of interested investors.

What underaddressed category deserves more focus from robotics startups and investors?

Climate change and sustainability. We will need to make significant strides in using technology to impact some of our global challenges, and we believe robotics can play a growing role, from wind turbine inspection to automated recycling.

How will automation impact the workforce of the future?

The best applications for robots today are where robots work in conjunction with human workers. Companies that have been successful in deploying robots have increased their workforce. Robots will replace dull, dirty and dangerous jobs. Those are the undesirable jobs that are not easily filled.

Are home robotics finally having their moment?

We are watching Amazon’s acquisition of iRobot closely. We believe there are plenty of opportunities for robots in the home in the future.

What more can/should the U.S. do to foster innovation in the category?

Increase the support for the startup community by investing in innovation centers (like MassRobotics) and create incentives for small and midsized firms to adopt robotics to allow them to be competitive on the world stage.

Critical mass by Brian Heater originally published on TechCrunch

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Schedule for Week of January 29, 2023

The key reports scheduled for this week are the January employment report and November Case-Shiller house prices.Other key indicators include January ISM manufacturing and services surveys, and January vehicle sales.The FOMC meets this week, and the FO…

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The key reports scheduled for this week are the January employment report and November Case-Shiller house prices.

Other key indicators include January ISM manufacturing and services surveys, and January vehicle sales.

The FOMC meets this week, and the FOMC is expected to announce a 25 bp hike in the Fed Funds rate.

----- Monday, January 30th -----

10:30 AM: Dallas Fed Survey of Manufacturing Activity for January. This is the last of the regional Fed manufacturing surveys for January.

----- Tuesday, January 31st -----

9:00 AM: FHFA House Price Index for November. This was originally a GSE only repeat sales, however there is also an expanded index.

9:00 AM ET: S&P/Case-Shiller House Price Index for November.

This graph shows the Year over year change in the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 6.9% year-over-year increase in the Comp 20 index.

9:45 AM: Chicago Purchasing Managers Index for January. The consensus is for a reading of 44.9, down from 45.1 in December.

10:00 AM: The Q4 Housing Vacancies and Homeownership report from the Census Bureau.

----- Wednesday, February 1st -----

7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for January. This report is for private payrolls only (no government). The consensus is for 170,000 payroll jobs added in January, down from 235,000 added in December.

10:00 AM: Construction Spending for December. The consensus is for a 0.1% decrease in construction spending.

Job Openings and Labor Turnover Survey10:00 AM ET: Job Openings and Labor Turnover Survey for December from the BLS.

This graph shows job openings (black line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Job openings decreased in November to 10.458 million from 10.512 million in October

10:00 AM: ISM Manufacturing Index for January. The consensus is for the ISM to be at 48.0, down from 48.4 in December.

2:00 PM: FOMC Meeting Announcement. The FOMC is expected to announce a 25 bp hike in the Fed Funds rate.

2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

Vehicle SalesAll day: Light vehicle sales for January. The consensus is for light vehicle sales to be 14.3 million SAAR in January, up from 13.3 million in December (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the December sales rate.

----- Thursday, February 2nd -----

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 200 thousand initial claims, up from 186 thousand last week.
----- Friday, February 3rd -----

Employment Recessions, Scariest Job Chart8:30 AM: Employment Report for December.   The consensus is for 185,000 jobs added, and for the unemployment rate to increase to 3.6%.

There were 223,000 jobs added in December, and the unemployment rate was at 3.5%.

This graph shows the job losses from the start of the employment recession, in percentage terms.

The pandemic employment recession was by far the worst recession since WWII in percentage terms. However, as of August 2022, the total number of jobs had returned and are now 1.24 million above pre-pandemic levels.

10:00 AM: ISM Manufacturing Index for January. The consensus is for the ISM to be at 50.3, up from 49.6 in December.

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US gov’t $1.5T debt interest will be equal 3X Bitcoin market cap in 2023

The U.S. will pay over $1 trillion in debt interest next year, the equivalent of three or more Bitcoin market caps at current prices.

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The U.S. will pay over $1 trillion in debt interest next year, the equivalent of three or more Bitcoin market caps at current prices.

Commentators believe that Bitcoin (BTC) bulls do not need to wait long for the United States to start printing money again.

The latest analysis of U.S. macroeconomic data has led one market strategist to predict quantitative tightening (QT) ending to avoid a “catastrophic debt crisis.”

Analyst: Fed will have “no choice” with rate cuts

The U.S. Federal Reserve continues to remove liquidity from the financial system to fight inflation, reversing years of COVID-19-era money printing.

While interest rate hikes look set to continue declining in scope, some now believe that the Fed will soon have only one option — to halt the process altogether.

“Why the Fed will have no choice but to cut or risk a catastrophic debt crisis,” Sven Henrich, founder of NorthmanTrader, summarized on Jan. 27.

“Higher for longer is a fantasy not rooted in math reality.”

Henrich uploaded a chart showing interest payments on current U.S. government expenditure, now hurtling toward $1 trillion a year.

A dizzying number, the interest comes from U.S. government debt being over $31 trillion, with the Fed printing trillions of dollars since March 2020. Since then, interest payments have increased by 42%, Henrich noted.

The phenomenon has not gone unnoticed elsewhere in crypto circles. Popular Twitter account Wall Street Silver compared the interest payments as a portion of U.S. tax revenue.

“US paid $853 Billion in Interest for $31 Trillion Debt in 2022; More than Defense Budget in 2023. If the Fed keeps rates at these levels (or higher) we will be at $1.2 trillion to $1.5 trillion in interest paid on the debt,” it wrote.

“The US govt collects about $4.9 trillion in taxes.”
Interest rates on U.S. government debt chart (screenshot). Source: Wall Street Silver/ Twitter

Such a scenario might be music to the ears of those with significant Bitcoin exposure. Periods of “easy” liquidity have corresponded with increased appetite for risk assets across the mainstream investment world.

The Fed’s unwinding of that policy accompanied Bitcoin’s 2022 bear market, and a “pivot” in interest rate hikes is thus seen by many as the first sign of the “good” times returning.

Crypto pain before pleasure?

Not everyone, however, agrees that the impact on risk assets, including crypto, will be all-out positive prior to that.

Related: Bitcoin ‘so bullish’ at $23K as analyst reveals new BTC price metrics

As Cointelegraph reported, ex-BitMEX CEO Arthur Hayes believes that chaos will come first, tanking Bitcoin and altcoins to new lows before any sort of long-term renaissance kicks in.

If the Fed faces a complete lack of options to avoid a meltdown, Hayes believes that the damage will have already been done before QT gives way to quantitative easing.

“This scenario is less ideal because it would mean that everyone who is buying risky assets now would be in store for massive drawdowns in performance. 2023 could be just as bad as 2022 until the Fed pivots,” he wrote in a blog post this month.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Stay Ahead of GDP: 3 Charts to Become a Smarter Trader

When concerns of a recession are front and center, investors tend to pay more attention to the Gross Domestic Product (GDP) report. The Q4 2022 GDP report…

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When concerns of a recession are front and center, investors tend to pay more attention to the Gross Domestic Product (GDP) report. The Q4 2022 GDP report showed the U.S. economy grew by 2.9% in the quarter, and Wall Street wasn't disappointed. The day the report was released, the market closed higher, with the Dow Jones Industrial Average ($DJIA) up 0.61%, the S&P 500 index ($SPX) up 1.1%, and the Nasdaq Composite ($COMPQ) up 1.76%. Consumer Discretionary, Technology, and Energy were the top-performing S&P sectors.

Add to the GDP report strong earnings from Tesla, Inc. (TSLA) and a mega announcement from Chevron Corp. (CVX)—raising dividends and a $75 billion buyback round—and you get a strong day in the stock markets.

Why is the GDP Report Important?

If a country's GDP is growing faster than expected, it could be a positive indication of economic strength. It means that consumer spending, business investment, and exports, among other factors, are going strong. But the GDP is just one indicator, and one indicator doesn't necessarily tell the whole story. It's a good idea to look at other indicators, such as the unemployment rate, inflation, and consumer sentiment, before making a conclusion.

Inflation appears to be cooling, but the labor market continues to be strong. The Fed has stated in many of its previous meetings that it'll be closely watching the labor market. So that'll be a sticky point as we get close to the next Fed meeting. Consumer spending is also strong, according to the GDP report. But that could have been because of increased auto sales and spending on services such as health care, personal care, and utilities. Retail sales released earlier in January indicated that holiday sales were lower.

There's a chance we could see retail sales slowing in Q1 2023 as some households run out of savings that were accumulated during the pandemic. This is something to keep an eye on going forward, as a slowdown in retail sales could mean increases in inventories. And this is something that could decrease economic activity.

Overall, the recent GDP report indicates the U.S. economy is strong, although some economists feel we'll probably see some downside in 2023, though not a recession. But the one drawback of the GDP report is that it's lagging. It comes out after the fact. Wouldn't it be great if you had known this ahead of time so you could position your trades to take advantage of the rally? While there's no way to know with 100% accuracy, there are ways to identify probable events.

3 Ways To Stay Ahead of the Curve

Instead of waiting for three months to get next quarter's GDP report, you can gauge the potential strength or weakness of the overall U.S. economy. Steven Sears, in his book The Indomitable Investor, suggested looking at these charts:

  • Copper prices
  • High-yield corporate bonds
  • Small-cap stocks

Copper: An Economic Indicator

You may not hear much about copper, but it's used in the manufacture of several goods and in construction. Given that manufacturing and construction make up a big chunk of economic activity, the red metal is more important than you may have thought. If you look at the chart of copper futures ($COPPER) you'll see that, in October 2022, the price of copper was trading sideways, but, in November, its price rose and trended quite a bit higher. This would have been an indication of a strengthening economy.

CHART 1: COPPER CONTINUOUS FUTURES CONTRACTS. Copper prices have been rising since November 2022. Chart source: StockCharts.com. For illustrative purposes only.

High-Yield Bonds: Risk On Indicator

The higher the risk, the higher the yield. That's the premise behind high-yield bonds. In short, companies that are leveraged, smaller, or just starting to grow may not have the solid balance sheets that more established companies are likely to have. If the economy slows down, investors are likely to sell the high-yield bonds and pick up the safer U.S. Treasury bonds.

Why the flight to safety? It's because when the economy is sluggish, the companies that issue the high-yield bonds tend to find it difficult to service their debts. When the economy is expanding, the opposite happens—they tend to perform better.

The chart below of the Dow Jones Corporate Bond Index ($DJCB) shows that, since the end of October 2022, the index trended higher. Similar to copper prices, high-yield corporate bond activity was also indicating economic expansion. You'll see similar action in charts of high-yield bond exchange-traded funds (ETFs) such as iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and SPDR Barclays High Yield Bond ETF (JNK).

CHART 2: HIGH-YIELD BONDS TRENDING HIGHER. The Dow Jones Corporate Bond Index ($DJCB) has been trending higher since end of October 2022.Chart source: StockCharts.com. For illustrative purposes only.

Small-Cap Stocks: They're Sensitive

Pull up a chart of the iShares Russell 2000 ETF (IWM) and you'll see similar price action (see chart 3). Since mid-October, small-cap stocks (the Russell 2000 index is made up of 2000 small companies) have been moving higher.

CHART 3: SMALL-CAP STOCKS TRENDING HIGHER. When the economy is expanding, small-cap stocks trend higher.Chart source: StockCharts.com. For illustrative purposes only.

Three's Company

If all three of these indicators are showing strength, you can expect the GDP number to be strong. There are times when the GDP number may not impact the markets, but, when inflation is a problem and the Fed is trying to curb it by raising interest rates, the GDP number tends to impact the markets.

This scenario is likely to play out in 2023, so it would be worth your while to set up a GDP Tracker ChartList. Want a live link to the charts used in this article? They're all right here.


Jayanthi Gopalakrishnan

Director, Site Content

StockCharts.com

 

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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