I'm glad to see this list of '10 things to be thankful for'; OpenAI's 'code red' scramble; Waymo launches in four more cities; The bike helmet that may have helped save my life
1) There's so much gloom and doom out there that it's easy to get bearish on the U.S., our economy, and/or our stock market...
As such, I was glad to see that Creative Planning's Charlie Bilello put together a list of "10 Things to Be Thankful For" in the latest edition of his Week in Charts blog post.
Today, I'll share my favorite charts from the list...
While most indicators of the labor market show it's weakening, initial jobless claims are down:
And average hourly earnings have outpaced inflation for 29 consecutive months:
While affordability to buy a home is at an all-time low, rents have declined year over year (albeit slightly) for 30 consecutive months.
As a result, for the one-third of Americans who rent, Bilello notes that it's "now cheaper than paying a mortgage in all 50 of the largest metros in the US." Take a look at this chart he shared:
Additionally, U.S. household net worth is up by 6 times in the past 30 years to an all-time high:
GDP growth remains strong, too. Bilello shared this next chart showing that the Federal Reserve Bank of Atlanta estimates that GDP was 3.9% in the third quarter – well above consensus expectations:
Bilello also notes that S&P 500 Index corporate earnings are up a fabulous 13% this year to an all-time high – here's the chart:
And those earnings were driven by all-time-high profit margins (which is shocking to me – I would have expected tariffs to cut into profits):
Overall, these charts reinforce my long-held view...
Stock valuations are high (so expectations should be modest). But I don't believe we're in an economic or stock market bubble that's about to burst.
So if you own good stocks or funds, stay the course!
2) It's possible there is a bubble in certain AI companies, however...
Famed short seller Jim Chanos seems to think that privately held OpenAI, maker of ChatGPT, is going to crash. That's what he's referring to in this recent post on social platform X:
OpenAI is certainly scrambling...
As you may have heard by now, founder and CEO Sam Altman just declared a "code red" effort to improve the quality of ChatGPT.
The Wall Street Journal has more on the story:
Altman said OpenAI had more work to do on the day-to-day experience of its chatbot, including improving personalization features for users, increasing its speed and reliability, and allowing it to answer a wider range of questions.
The companywide memo is the most decisive indication yet of the pressure OpenAI is facing from competitors that have narrowed the startup's lead in the AI race.
As the WSJ continues, Alphabet's (GOOGL) Google is particularly concerning to Altman:
[Google] released a new version of its Gemini AI model last month that surpassed OpenAI's models on industry benchmark tests and sent the search giant's stock soaring.
Gemini's user base has been climbing since the August release of an image generator, Nano Banana, and Google said monthly active users grew from 450 million in July to 650 million in October. OpenAI is also facing pressure from Anthropic, which is becoming popular among business customers.
In this post on X, the Kobeissi Letter sees some irony in OpenAI's "code red." Here's the beginning of it:
Needless to say, all this makes me even more bullish on Alphabet.
3) Since OpenAI isn't publicly traded, I don't have to tell my readers to avoid its stock.
However, there's a question of what happens to other AI-related stocks, the overall market, and even the U.S. economy if OpenAI has to pull back its spending...
That's hard to gauge. But investors are clearly worried about many stocks – including Oracle (ORCL), as this post on X notes:
4) Another reason I'm bullish on Alphabet is the embedded value I see in its autonomous-driving subsidiary, Waymo. (I've discussed this in nearly three dozen e-mails over the years – you can see the archive here.)
Waymo just announced that it's now operating in four more U.S. cities – Baltimore, St. Louis, Pittsburgh, and Philadelphia:
5) In Wednesday's e-mail, I included a list of 18 of my favorite items of travel gear, clothing, and electronics.
As I said, these are great items to consider if you're still looking for gifts this season. And here's another I would add to the list...
If you ride a bike or scooter, this Lumos helmet is great. It has bright, blinking lights on the front and back. So that makes you much more visible – even during the day. (As of earlier this morning, it's $159.95 on Amazon.)
As longtime readers might recall, this helmet may have helped save my life in May 2024...
I was clipped by a car while crossing Park Avenue at 91st Street on my bike... even though I was in the crosswalk and the light had been red for many seconds.
The driver must have been distracted and was barreling toward me fast enough to kill me. But he braked in the nick of time and screeched to a stop, so he only hit the back part of my rear wheel lightly.
I took this picture – look at how far into the crosswalk he was:
I think the blinking lights on my helmet (and elsewhere on my bike) led him to see me and brake a few milliseconds faster. So that most likely saved me from serious injury – or maybe even death.
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.