December 11, 2017

Weekly Market Commentary
December 11, 2017

The Markets

“It’s the happiest season of all.”

While holidays don’t make everyone happy, investors should be feeling festive. The Standard & Poor’s 500 Index and Dow are up year-to-date and Treasury bond yields are lower than they were at the start of the year.

In addition, the Volatility Index (VIX), a measure of how unpredictable investors expect the S&P 500 Index to be over the short-term, finished the week below 10. A low VIX reading means investors expect calm markets through the end of the year.

In addition, unemployment has fallen to a 17-year low (4.1 percent), and unemployment in the manufacturing sector is at 2.6 percent, an all-time low. It appears demand for labor is high and supply is low. That should translate into higher wages, but it hasn’t yet. Average hourly earnings are up 2.5 percent year-on-year.

A lot of people are wondering when inflation is going to move higher but nothing major has happened here this year.

ARE YOU CONCERNED ABOUT HUMAN OBSOLESCENCE? Researchers from the University of Oxford and Yale University asked experts at several artificial intelligence (AI) conferences how long it would be before machines became better than humans at various tasks. The answers weren’t encouraging.

Overall, researchers think there is a 50 percent chance that AI will outperform humans at all tasks within 45 years. They also said it’s possible many jobs humans do now will be automated within 120 years. Asian survey participants expect the change to happen more quickly than North American participants do.

Wondering if this might affect you? Here are a few of the time frames as determined by averaging survey participants’ answers. Machines may be better at:

• Translating languages by 2024
• Writing high-school essays by 2026 (Would this be cheating?)
• Driving trucks by 2027
• Working in retail by 2031
• Writing bestselling books by 2049
• Working as surgeons by 2053

While the idea of human employment prospects becoming more limited is disturbing, there is still time to capitalize on shorter-term opportunities. For example, eSports is a booming industry. FactSet reported, “Last year’s League of Legends World Championship sold out the Los Angeles Staples Center in less than an hour…an additional 43 million tuned in online – for context, the 2016 NBA Finals Game 7 broke records with 30 million viewers…” The League of Legends champions took home about $1.5 million in 2017.

Perhaps you can’t picture yourself encouraging your loved ones to spend hours playing video games but they are not alone. According to reports from Statista, the eSports market is growing 40 percent year-over-year globally and is expected to generate about $1.5 billion by 2020!

Focus On The Positive

“Peace on Earth”

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