Market News 7/22

Markets

Yesterday, stocks experienced a mixed performance with significant volatility. The Dow continued its winning streak for the 10th consecutive day, marking its longest such streak since August 2017. However, the Nasdaq declined as investors braced themselves for upcoming changes to the index scheduled for Monday.

Dow Edges Higher, Its 10th Gain in a Row

The Dow Jones Industrial Average managed to secure its tenth consecutive daily gain on Friday, despite a selloff in American Express shares following their earnings report. The index benefited from gains in various blue-chip companies, including Intel, Procter & Gamble, Nike, and Chevron.

This ten-day winning streak is the Dow's longest in almost six years and indicates that the stock market rally is broadening its scope beyond just a few chip makers and high-tech companies. It is now extending to other sectors of the economy, such as healthcare, airlines, energy, and banking.

Interestingly, the worst-performing sectors in the S&P 500 in 2023—utility, healthcare, finance, and energy stocks—have surprisingly taken the lead in the rally so far this month. Healthcare and financial stocks have managed to turn positive for the year during this week, while energy and utility shares have come closer to reaching break-even performance.

Tech

Is ChatGPT losing its accuracy?

During this spring, OpenAI's generative language model, specifically ChatGPT-4 and ChatGPT-3.5, experienced a significant decline in accuracy, leading to concerns about its performance. A study conducted by researchers from Stanford and Berkeley, although not yet peer-reviewed, revealed a notable difference in the chatbot's responses between March and June of that year, often for the worse, which had been previously reported anecdotally by users online.

For instance, the accuracy of GPT-4 in identifying prime numbers dropped drastically from 97.6% a few months ago to a mere 2.4% in June. While the newer version of the language model showed improvement in handling problematic prompts, like avoiding illegal money-making schemes, it now tends to respond with a generic refusal, saying, "Sorry, but I can't assist with that," instead of explaining why certain queries are troublesome.

Moreover, GPT-4's ability to generate functional computer code decreased from 52% success in March to only 10% in June. Although the lines of code provided were not incorrect, they started to be accompanied by non-usable text, potentially causing issues for companies attempting to integrate ChatGPT into programming workflows.

The researchers speculate that the abrupt change in ChatGPT's behavior within such a short period is likely due to OpenAI continuously tweaking its product. However, since OpenAI keeps its development process private, it remains challenging for external observers to pinpoint the exact causes of ChatGPT's declining performance. OpenAI has acknowledged these reported issues and stated that they are investigating the regressions.

Politics

Trump’s legal troubles will play out during campaign season

Former President Donald Trump is facing a criminal trial concerning his handling of classified documents after his tenure in office. The trial is scheduled for May, as ruled by Florida federal Judge Aileen Cannon. Trump, who is also a 2024 presidential hopeful, had requested a postponement of the trial until after the election, but the judge rejected this request. Similarly, the government's suggestion of a trial date in December was also dismissed.

This trial is just one of several criminal investigations involving Trump, which he often dismisses as hoaxes. Additionally, there is a separate investigation into efforts to overturn the 2020 election, and Trump has hinted that he might be facing indictment in that probe soon.

Sports

Lionel Messi’s U.S. Debut

After extensive anticipation and a significant financial investment, the highly-awaited opening night finally arrived for a global cultural icon, adored by children worldwide, and adorned in a vibrant bubble gum pink outfit.

However, we are not referring to Barbie.

Instead, it was Lionel Messi who made his North American debut on Friday night, donning the bright pink jersey of Inter Miami for the first time since the groundbreaking announcement of his move to Major League Soccer last month.

Although his appearance on the field lasted only 36 minutes, more of a cameo than what the sold-out crowd of 18,000 might have expected, Messi's performance was flawless. Coming in as a second-half substitute, he played his role to perfection, delighting the fans who had eagerly awaited this moment.

Interesting Chronicles

SBF accused of more shady moves

The heat intensified for Sam Bankman-Fried, the founder of FTX, as the crypto exchange's new management took legal action against him and several former executives. The lawsuit aims to recover more than $1 billion of company funds that the executives allegedly misappropriated for various purposes.

Some of the alleged misuses of funds include gifting $10 million to Bankman-Fried's father, which FTX believes is now being used to support SBF's legal defense. Additionally, the company claims that $725 million in FTX stock was granted to executives who did not provide any justifiable reason for receiving the equity.

Furthermore, the executives are accused of using $546.1 million to acquire a stake in Robinhood, a move that FTX disputes. In a surprising revelation, FTX also asserts that Bankman-Fried's brother intended to utilize the company's budget to purchase the Pacific island nation of Nauru as a potential hideaway in the event of an apocalypse.