Aurelia Butler

SAN FRANCISCO (Reuters) – (This Jan. 4 story has been corrected to say that Bosch is scheduled to speak at CES on AI and cybersecurity, not that Bosch is expected to showcase a gun-detection system, in paragraph 9 and fixes executive’s name to Aakash Arora in paragraph 11) OpenAI boss Sam Altman will not appear at the CES trade show in Las Vegas next week. But the generative artificial-intelligence fever his startup set off last year will be on full display as gadget makers race to find consumer uses for the technology.In devices for the visually impaired, and safety systems involving guns at schools, to facial-recognition software that can assess vitals, and cabin-monitoring systems inside autonomous cars, dozens of companies have planned announcements for the show about how they are building AI into their gadgets.CES 2024, formerly known as the Consumer Electronics Show, runs Jan. 9-12. OpenAI’s influence at the show despite Altman’s physical absence is reminiscent of Apple (NASDAQ:AAPL) and its founder Steve Jobs, whose clout was felt despite him avoiding the show, with many firms jockeying to display gadgets compatible with the company’s sleek products.Altman is widely regarded as the poster child for the AI frenzy that has gripped the tech industry for the past year. He made headlines in November when he was briefly ousted by the ChatGPT maker’s board, and reinstated days later after more than 700 employees threatened to quit and join OpenAI investor Microsoft (NASDAQ:MSFT) in solidarity.Among other projects, OpenAI is working on a secretive AI hardware project with famed former Apple designer Jony Ive, according to media reports.Funding for generative AI projects exploded last year, surging more than fivefold to $23.78 billion through the beginning of December from 2022, according to PitchBook data.”It’s the year of AI in everything,” said Maribel Lopez, tech analyst at Lopez Research. “If you don’t have AI in your product, don’t show up, it’s not worth talking about.”Germany’s Bosch, which recently won a CES award for a near-invisible gun-detection system that pairs video and audio AI for proactive security involving firearms at schools, is scheduled to speak on AI and cybersecurity at a panel in the show. Japan’s NEC will unveil AI software that enables mobile devices to analyze face patterns and pupil conditions to estimate human vitals and mental state.A slew of companies is expected to show off how using AI in vehicles is making them smoother and safer for drivers through better in-vehicle virtual assistants and cabin monitors.The new focus area for automakers after years of investment into autonomous technology that used AI is technology that allows a “hyper personalized” experience while buying and driving cars, said Aakash Arora, a managing director at Boston Consulting Group.”They’re trying to figure out ‘if I could get to this level of customer experience it can really differentiate me in the market,'” he said of companies in the auto industry.For instance, Cerence (NASDAQ:CRNC), which makes AI-powered virtual assistants, is set to announce a partnership with Volkswagen (ETR:VOWG_p), and Israel-based Cipia is expected to unveil a system that monitors signs of distraction and drowsiness in drivers.Many automakers are also adopting AI in various stages of production to reduce costs, said Wendy Bauer, vice president of automotive and manufacturing at Amazon (NASDAQ:AMZN) Web Services, which counts BMW (ETR:BMWG) and Toyota (NYSE:TM) as customers. AI can help carmakers save money by speeding up vehicle development and ensuring better quality checks during manufacturing, she said.PC and smartphone makers are also likely to showcase how their products use AI, which chipmakers including Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD) are betting will offer a new revenue stream. Microsoft said on Thursday that PCs with a new AI button on the Windows keyboard will be on display at the show.But it is not clear whether consumers will pay extra for AI capabilities on their computers because these developments perform less obvious tasks than OpenAI’s ChatGPT bot.”Consumers love ChatGPT, but the consumer benefit of having it on a device isn’t clear,” said Jay Goldberg, chief executive of D2D Advisory. “That’s why everyone is going to talk about it – because everyone is scrambling for the consumer utility.” More

NEW YORK (Reuters) – Investors’ hopes are running high to start 2024, which could set up U.S. stocks for a rocky stretch if some expectations are not met. Despite a shaky start to the year, the S&P 500 stands only around 2% below a fresh record high. Most investors have maintained a rosy view on everything from the U.S. economy and corporate profits to the Federal Reserve’s monetary policy trajectory. For example, the narrative of resilient growth and gradually cooling inflation that helped boost the S&P 500 to a 24% gain last year has become the consensus view among investors. The latest BofA Global Research survey, released last month, showed 66% of fund managers believed the economy will achieve a soft landing in 2024. Only 15% of fund managers expected a recession in the next 12 months, BofA’s data showed, a sharp contrast from a year earlier, when 68% of investors expected a recession. Bets on easier monetary policy have gone hand-in-hand with the soft-landing outlook. Futures tied to the Fed’s policy rates show investors pricing in around 140 basis points of interest rate cuts this year, nearly twice what the central bank itself has projected. Not surprisingly, many investors have a positive outlook on stocks. Bullish sentiment rose to 48.6% in the latest week — a notch down from its recent peak in December, but well above the historic average of 37.5%, the American Association of Individual Investors survey showed. Those views have been shaped in large part by tangible evidence of cooling inflation, a comparatively strong economy and the Fed’s own guidance, after policymakers surprised markets with a dovish pivot last month. With stocks near historical highs and at elevated valuations, however, some investors worry the market’s sunny outlook leaves more room for disappointment if any of those scenarios do not materialize. “Anything that throws off the current economic narrative or market narrative – the risk of that disappointment flowing through to prices in equities is higher,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management.One test of investors’ optimism comes with next week’s consumer price data, which could show whether recent bets on ebbing inflation have been premature. Expectations for a cooling economy that could set the stage for Fed rate cuts took a hit on Friday, after jobs data showed employers hired more workers than expected in December while raising wages at a solid clip. The S&P 500 fell 1.54% this week, the biggest weekly decline since late October. Major banks including JPMorgan Chase (NYSE:JPM) and Citigroup kick off earnings season next week, testing elevated expectations for corporate profits. Analysts expect S&P 500 earnings to rise by 11% in 2024 after increasing just 3% in 2023, according to LSEG data. Pressure to meet higher earnings targets may be more intense than a year ago, as the market’s overall valuation has climbed. The S&P 500 trades at a forward price-to-earnings ratio of 19.5 compared with about 17 times at the start of 2023, LSEG Datastream data showed. “We don’t expect multiples to expand significantly from here because valuations are stretched a bit, so it’s going to come down to where the earnings come in,” said James Ragan, director of wealth management research at D.A. Davidson. Ragan puts fair value for the S&P 500 at 4,700, roughly where it is trading now.Looking further ahead, investors will parse the message from the Fed at the end of its Jan. 30-31 policy meeting. Markets expect the central bank to leave rates unchanged this month, and bets on a cut at the March meeting have been pared back. Futures markets on Friday priced a roughly 62% chance that the Fed cuts rates by 25 basis points in March, from around 73% a week ago, CME’s FedWatch Tool showed. Still, stocks have historically responded well to rate cuts. Over the past 12 easing cycles since 1970, the S&P 500 has tended to rally for the six or seven months after the first rate cut with an average gain of about 12%, according to Ned Davis Research. Keith Lerner, co-chief investment officer at Truist Advisory Services, said in a recent note that the bar for positive surprises has risen and he expects a “digestion period” for the market after its strong run. He still believes, however, that stocks are likely to rise in 2024. “Stick with the underlying positive market trend and be prepared to use pullbacks as opportunities,” Lerner said. More

WASHINGTON (Reuters) -Two groups representing auto dealers said on Friday they had filed a legal challenge to the Federal Trade Commission’s new sweeping consumer protection regulations finalized last month.The FTC said the new rules will ban bait-and-switch advertising tactics, prohibit charging for add-on costs that do not benefit consumers and require dealers to make key disclosures to consumers, including accurate pricing disclosures in advertising and sales communications.The rules were first proposed in 2022 and will take effect on July 30. They also require dealers to keep records of certain advertisements and customer transactions. The National Automobile Dealers Association (NADA) and Texas Automobile Dealers Association late Thursday asked the Fifth Circuit Court of Appeals to block the new rules that “comprehensively regulates the advertising, sales, and financing of vehicles by auto dealers” saying they are “arbitrary, capricious (and) an abuse of discretion.”The FTC declined to comment.The NADA said previously the FTC proposal would “upend the sales process for tens of millions of consumers annually and thousands of small businesses.”The FTC said the new rules would bar junk fees like a service contract for an oil change for an electric vehicle said it is expected to save consumers more than $3.4 billion and an estimated 72 million hours annually shopping for vehicles. Dealers will also be required to obtain consent for any charges they add to a vehicle’s price and barred from charging for add-ons that are useless to the buyer, such as selling nitrogen-filled tires that contain no more nitrogen than normal air.The Alliance for Automotive Innovation, representing General Motors (NYSE:GM), Toyota Motor (NYSE:TM), Volkswagen (ETR:VOWG_p) and other major automakers, previously raised concerns about the FTC plan, warning of “excessive regulation and micromanagement of the sales experience.”In November, a U.S. House committee said it was investigating the FTC’s consumer protection rules, arguing the regulation “threatens harm to consumers and small businesses by making car purchases more difficult and inhibiting innovation in the industry.”A group of 17 Democratic lawmakers in June urged the FTC to “adopt strong regulatory protections for car buyers,” arguing that “unfair and deceptive practices involving motor vehicle dealers have widespread consequences.” More

Barkin pointed out the importance of the first quarter’s price adjustments in determining the future direction of monetary policy. Federal Reserve officials are of the view that the current lending rates, which have reached a range of 5.25% to 5.5%, represent a peak. They are contemplating three rate cuts throughout the year, aiming for a “soft landing” of the economy. This approach seeks to maintain subdued growth and declining inflation while avoiding significant job losses.The anticipation of these potential rate cuts is based on the premise that the economy will continue to demonstrate positive signs, such as a normalization of the labor market and inflation rates nearing the Fed’s desired levels. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

LINTHICUM, Md. (Reuters) -Continued strong U.S. job growth and a low unemployment rate shows the Federal Reserve is not yet at the point where its efforts to control inflation risk a direct tradeoff with the central bank’s other goal of maintaining maximum employment, Richmond Fed President Thomas Barkin said on Friday.”Getting inflation under control is critically important and at this point we are still at 3.7% unemployment and 216,000 jobs added,” per month, Barkin said, referring to the results of the newly-released December jobs survey. “We’re still at a point where inflation is over our target and unemployment is arguably at or below,” levels consistent with maximum employment, Barkin said in comments to reporters following a presentation to the Maryland Bankers Association.At the Fed’s December 12-13 meeting some policymakers said they thought current high interest rates could soon put the Fed in the position of having to choose between further progress lowering inflation or a markedly higher unemployment rate. “I don’t think we’ve gotten to that…quite yet,” Barkin said, “but you can see it out there.” As it stands, he said he felt a so-called “soft landing,” with inflation controlled without the sort of large rise in unemployment that has followed many periods of tight monetary policy, was “increasingly conceivable.” Balancing the need for further downward pressure on inflation against the possible risks of a sharper-than-expected economic slowdown will be key to the Fed’s coming debate over when to lower the benchmark interest rate from the current 5.25% to 5.5% range that has been in place since July.At their December meeting a majority of Fed officials projected the policy rate would need to fall by three quarters of a percentage point over the course of the year, an outlook that gives no guidance on when that process might start. Investors expect rate cuts beginning in March, with a deeper reduction of around 1.5 percentage points over the year than Fed officials project.Barkin did not comment on his own rate outlook, but said that at this point he is still building “conviction” that inflation will in fact return to the 2% target.While one important measure of inflation is, on a six month basis, already below 2%, Barkin said he remained concerned about how much recent progress on inflation has depended on weaker prices for goods, while inflation for housing and in some service industries remains above target.”You’ve got this goods deflationary cycle which is masking a continued inflationary cycle on services and shelter. That doesn’t have to be a bad thing. You can get to 2% in lots of ways,” Barkin said. “My metric is conviction…I don’t have any objection conceptually to toggling rates back toward normal levels as you build increasing conviction and confidence that inflation is on a convincing path back to your target.” More