• Market Crumbs

Prepare To Bow To Your Robot Overlords


It's not just the stock market making new highs. Global annual sales of robots hit $16.5 billion last year, according to the World Robotics report released yesterday. More than 420,000 robots (robots secured?) were installed in 2018, with the number expected to grow by nearly 40% to 584,000 by 2022. The number of robots has more than doubled since 2013, when there was only 178,000 robots globally.


The top five countries account for 74% of global robot installations. Not surprisingly, China is leading the way, spending $5.4 billion last year to take a 36% share of global installations. Despite installing 1% fewer robots in 2018 than 2017, China still put more robots to work last year than Europe and the Americas combined. Rounding out the top five, in order, are Japan, Republic of Korea, the U.S. and Germany. The U.S. saw installations increase for an eighth-consecutive year to a new record of more than 40,000 robots.


The largest markets for robots are countries dominant in auto manufacturing and electrical/electronics. Robots used for the automotive industry, such as Porsche, accounted for a 30% share of the total robot supply. The electrical/electronics industry, the most sensitive to the China-U.S. trade war, was going to replace auto manufacturing as the top industry using robots, but installations fell after consumer demand weakened last year.


Robots and artificial intelligence are quickly entering everyday life beyond factories, such as at McDonald's or your next ride with Lyft. Bill Gates even thinks if they take your job they should be taxed. Whatever happens, the good news is Elon Musk's prediction four years and ten months ago, that robots could kill us in five years, hasn't come to fruition yet.


Leftover Crumbs

  • Despite the "greatest economy ever," the Fed cut interest rates for the second time in less than two months. As widely expected, the Federal Reserve cut the target range for the federal funds rate by 0.25% to a range of 1.75% to 2.0%. Jerome Powell, Chairman of the Federal Reserve, said the rate cut is “to provide insurance against ongoing risks.” President Trump wanted more, tweeting "Jay Powell and the Federal Reserve Fail Again." As Jeff Gundlach predicted, Powell said the Fed may have to "resume the organic growth of our balance sheet" to help ease money markets, which will see their third-consecutive repo operation take place today.

  • The stock market is not the economy. Despite the markets sitting just below all-time highs, CEOs and CFOs aren't so confident, according to the latest CEO Economic Outlook Index. Capital spending, sales estimates and hiring over the next six months have "waned" as a result of the trade war and slowing global economy. A separate poll, The CFO Survey, found 67% of CFOs expect the U.S. to be in a recession by the end of next year.

  • Will the next Warren Buffett be a female? Tracy Britt Cool, Buffett's "right-hand woman," is leaving Berkshire Hathaway after ten years to start her own investment vehicle where she'll replicate what she learned from the Oracle of Omaha. Cool, who at one point even drove Buffett around town, will invest in companies “too small for Berkshire” at her new venture. She will resign from Kraft Heinz's board next year, while remaining on the board of Blue Apron.

  • Once a tariff man, always a tariff man. 23 U.S. lobbying groups have formed the "Tariff Reform Coalition" and urged Congress take more control over President Trump's trade policies and use of tariffs. The coalition is concerned that Trump's trade policies, especially the $500 billion in tariffs Trump has imposed on Chinese goods, is negatively affecting the U.S. economy. They have asked congressional committees to review his trade policies and are prepared to assist in drafting legislation to limit his authority.

  • George Orwell is rolling over in his grave. According to a report by The Carnegie Endowment for International Peace, countries are increasingly using artificial intelligence to keep an eye on citizens. The report says at least 75 countries, including the U.S., are now using AI tools such as facial recognition for surveillance. U.S.-based companies IBM, Palantir and Cisco, as well as China's Huawei, are among the companies providing governments these technologies.