—— U.S. Inflation Speeds Up Again; Human Error Causes ASML Crash; Paramount to Lay Off 800 Employees; OpenAI Gives ChatGPT Memory; Super Bowl Sets Record Viewership; Trillions in Commercial Real Estate Loans Coming Due; CPI Rises and Stock Market Faces Heavy Losses
1. U.S. Inflation Speeds Up Again
The U.S. government released data today showing that January’s CPI rose both month-over-month and year-over-year, with the core CPI, excluding energy and food, reaching an 8-month high.
The prices of services saw the largest increase in nearly two years, and inflation in housing costs also began to accelerate.
This new data has once again dampened hopes of a near-term interest rate cut by the Federal Reserve. If the CPI continues to worsen, the Fed may even consider raising rates. Some Fed officials have stated they would like to see more evidence of CPI relief before considering rate cuts.
After the data was released, U.S. stocks plummeted at the market open, and Treasury bonds were sold off, with yields rising sharply.
The Federal Reserve is now more likely to consider cutting rates in May or later.
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2. Human Error Causes ASML Crash
Today, Europe’s most valuable tech company, ASML Holding, saw its stock plummet by as much as 7.1% after the market opened, though it quickly recovered to previous levels.
Several traders explained that this sharp drop was likely caused by human or algorithmic error.
Mark Taylor, president of UK brokerage Panmure Gordon, stated that ASML’s opening drop appeared to be a human error, but after the rebound, many frightened investors chose to liquidate their positions.
Such a situation is rare for a company of ASML’s size, and trading was halted for 3 minutes.
Despite today’s drop, ASML has still risen by 22% year-to-date.
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3. Paramount to Lay Off 800 Employees
Insiders revealed that CBS and Nickelodeon parent company Paramount Global plans to lay off 800 employees, accounting for 3% of the company’s workforce. Just a few days ago, CBS broadcast the Super Bowl, which achieved a historic viewership high.
In recent years, the traditional satellite and cable TV market has been losing viewers to streaming platforms like Netflix, and Paramount’s own TV network services have also been losing money. As a result, the company must control costs through layoffs.
CEO Bob Bakish stated that U.S. employees will be notified today, while overseas employees will receive their layoff notifications in the coming days.
Today, Paramount’s stock dropped 4.8%, and it has fallen 13% this year.
Source：Bloomberg – Paramount Global to Cut 800 Jobs in Drive to Boost Profitability
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4. OpenAI Gives ChatGPT Memory
Today, AI startup OpenAI announced in a blog post that it is testing a new feature allowing ChatGPT to permanently store user interaction information, such as remembering that a user is allergic to avocados.
Additionally, OpenAI hopes that ChatGPT will become capable of autonomously selecting which information is worth remembering.
Initially, both free and paid users will be able to test this new feature, with OpenAI planning to optimize it based on feedback.
While the new memory feature could improve user customization, it also raises concerns about privacy and security.
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5. Super Bowl Sets Record Viewership
Last Sunday, a total of 123 million U.S. households tuned in to watch the NFL Super Bowl, surpassing last year’s 115 million and setting the second-highest record in U.S. television history, only behind the 125 million viewers during the Apollo moon landing in 1969.
Football remains the most-watched television event in the U.S. According to Nielsen, 93 of the 100 most-watched television programs in the U.S. last year were NFL games.
In addition, the Super Bowl remains the prime occasion for other industries to advertise and for star performers to showcase their talents. The cost of a 30-second commercial during the Super Bowl is $7 million.
This year, Paramount earned $500 million in advertising revenue from the Super Bowl.
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6. Trillions in Commercial Real Estate Loans Coming Due
According to the Mortgage Bankers Association (MBA), 20% of commercial and multi-family real estate loans will mature this year, totaling $929 billion, 40% higher than previous estimates.
MBA’s director of commercial real estate research, Jamie Woodwell, stated that uncertainty and volatility in interest rates, as well as discrepancies in property values, have caused a sharp reduction in transaction volume. After the Fed’s rate cuts this year, more real estate transactions are expected to take place.
The data shows that $4.7 trillion in debt is secured by U.S. commercial real estate, and declining property values have raised concerns among regulators and investors. As of the end of last year, $85.8 billion in commercial real estate loans were considered non-performing.
Compared to the peak in early 2022, the overall value of commercial real estate has corrected by 21%.
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7. CPI Rises and Stock Market Faces Heavy Losses
Today, the CPI data, which came in higher than expected, caused both U.S. stocks and Treasury bonds to be sold off.
The S&P 500 index dropped 2% from its historical high, marking its worst performance since September 2022 on a CPI data day.
The 2-year Treasury yield also reached a new high since December. Swap traders lowered the chances of a rate cut by the Fed before July.
Previously, Chairman Powell and other Fed officials had repeatedly told investors not to expect an imminent rate cut, and today’s data further dampened those expectations.
Experts believe the likelihood of the Fed cutting rates in March has now become nearly zero.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.