The Rise Of The Machines 🙊 ECB Pumps The Brakes 😬

Table of Contents

1. The Rise Of The Machines

Is it time to start worrying about Skynet?…Or maybe it’s too late already. Recent data shows that the US put a record number of robots into the workforce in 2018, and 2019 is only set to get worse. Who’s ready for the rise of the machines?

The explosion of demand can be attributed to the introduction of cheaper, more flexible robot workers which has put them within reach of businesses of all shapes, sizes and locations. 2018 shipments jumped 16% in the US alone, coming in at 28,478 for the year.

One of the most prominent implementers of robotics was the food industry, surging 60% year on year, followed by semiconductors (+50%) and metal producers (+13%). That’s quite some growth!

A tight US labour market with higher aggregate wage levels has also had a hand in the increase in automation as business owners implement cost-cutting measures wherever they can to remain competitive and efficient. The rapid growth in food sector automation boils down to the sector’s sensitivity to labour market conditions, with costs rising dramatically during tight labour market conditions.

Automation poses a significant threat to the jobs of both menial and skilled workers alike, but represents an incredible leap forward in efficiency of production. Robotics companies, such as iRobot, have already bumped up over 40% since the start of 2019 and look set to capture significant market share with the growth of automation. Beware the rise of the machines!

2. ECB Pumps The Brakes

It’s no secret that the Eurozone has been under significant pressure of late with complex trade negotiations, Brexit and internal disruptions causing considerable growth issues for the region. Pumping the brakes on the rate-hike cycle seems like the only logical decision to prop up the economy.Or is it?

Some economists are arguing that ECB policymakers have missed a golden opportunity to normalise policy rates in a single cycle and that the future attempts to achieve this will have more severe side-effects. So what’s this all about?

Having moved away from its €2.6 trillion quantitative easing (QE) stimulus programme only two months ago, some economists are questioning the ECB’s latest movements to restart a new cheap loans programme. Over 90% of constituents supported the end of QE, but now they’re headed right back into it. Say what?

With inflation and GDP growth for the region looking decidedly muted for the remainder of the year, investors have begun to price in no further rate hikes until the second half of 2020. This could see Europe enter a dangerous situation, similar to the Bank Of Japan, where improving economic conditions are met with only an easing in stimulus rather than an increase in rates.

This would put the ECB is a spot of bother going forward if inflation and growth refuse to get kick-started again! More woes for Europe….They never seem to end.

3. Congratulations To February’s Winners! 

 

Today we are watching…

1. Footlocker (#footlocker)

Footlocker is looking strong ahead of its earnings call today. The company has taken a keen interest in improving its mobile and web-based supply chain, direct to customer operations, new locations and data analytics capabilities. It has also managed to expand its gross margin despite increased expenditure on store revamps. Overall, analysts are positive about the company’s chances at beating earnings estimates today. So watch out for this one!

2. Celgene (#celgene)

Biopharma company, Celgene, dipped 8.6% yesterday when bad news surrounding its merger with pharma giant, Bristol-Meyers Squibb (BMS), hit the markets sending investors into sell-off mode. Another high-profile shareholder has come forward in opposition to the merger, creating an air of uncertainty about the future of the deal. Currently the opposing parties only own roughly 10% of BMS which is not enough to kill the deal, but with the final vote only 6 weeks away, more opposition to the deal could be deadly for Celgene’s share price.

 

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