Tuesday's Markets Update (December 12, 2023)

12 Dec 2023 by rate3

On Tuesday, investors weigh a surprising CPI report and anticipate the Fed's policy decision. The Nasdaq and other key stocks seesaw amid an unexpected 0.1% rise in consumer prices. Energy is the worst-performing sector due to a drop in oil prices. Tesla and Oracle shares fall due to disappointing earnings and legal challenges, respectively, while Alphabet dips after an antitrust ruling. BTC and ETH continued to adjust as traders take profits.

Details

The annual inflation slowed to 3.1% in November, as energy costs fell (gasoline -8.9%, utilities gas -10.4%, fuel oil -24.8%). Prices for food, shelter, cars, apparel rose slower, but medical care commodities and transportation services rose faster.

The core inflation (excluding food & energy) rose by 0.3% from the previous month, aligning with expectations and slightly up from 0.2%. Highest rises are in shelter - up 0.4%, medical care - 0.6%, and transportation services - 1.1%.

This indicates that, although, Fed's tightening is affecting the economy, service prices excluding energy continue to rise.

Crypto

Comment: AI and Web3?

Web3 is the next generation of internet technologies, and generative AI involves machines creating content intelligently. The challenge is that these technologies have different requirements and integrating them is not straightforward.

Generalization: AI can be used to analyze data and optimize supply chains, while blockchain technology can ensure transparency and security in the supply chain. In the financial services industry, AI and blockchain are being utilized to create more efficient and secure payment systems, detect fraudulent activities, and ensure the security and integrity of transactions. Also, AI models can be embedded in smart contracts executed on a blockchain to automate tasks, resolve disputes, and enhance decision-making processes.

Mismatch between Generative AI and Web3: Generative AI, which usually runs on powerful GPUs, faces a challenge when integrated with Web3, which operates on limited data and computation capabilities. This creates a hurdle in adapting Web3 runtimes to handle the demands of generative AI workloads.

Need for Integration: Despite the challenges, there is a need for Web3 to incorporate generative AI to keep up with Web2 alternatives. The key question is how to achieve this integration effectively.

Solutions:

Text Tools: Generative AI is being leveraged to empower Web3 through applications such as NFTs, blockchain gaming, the metaverse, and Web3 development. For example, by implementing Generative AI text tools, it is possible to streamline and innovate dynamic game elements like dialogues and avatars;
NFTs: image and video generation for NFTs;
Autonomous agents: this latest trend in generative AI, could be the solution. These agents are intelligent models capable of reasoning through tasks, formulating plans, and executing them. They have gained attention in recent months due to their semi-autonomous nature.