Monday PM reads
- China's government has announced proposed guidelines to prevent manufacturers from pricing cars below the cost of production and to stop dealers from offering discounts that bring down vehicle prices below cost. The move is part of the government's crackdown on "involution" and aims to address the issue of excessive competition in the local auto industry, which has led to falling vehicle prices. The proposed rules also target collusion and require carmakers and dealers to establish systems to train staff, monitor prices, and control risks, with the regulator seeking public feedback until Dec. 22. BB
- iRobot Corp. filed for bankruptcy and proposed handing over control to its main Chinese supplier, Shenzhen PICEA Robotics Co. The company's common stock will be wiped out under the proposed Chapter 11 plan, which will allow iRobot to remain as a going concern. iRobot's earnings began to decline in the post-Covid era due to supply chain issues and cheaper competitors, despite having sold more than 40 million home robots. BB
- In the days following “Liberation Day,” the contrast between Trump’s optimism and more dire predictions from trade experts and economists was stark. As businesses and consumers tried to make sense of the mixed messages, the president doubled down on promises he’d made during his 2024 presidential campaign. “The markets are going to boom, the stock [market] is going to boom, the country is going to boom,” he said on April 3. Economists and business leaders dialed up predictions of a fallout. BlackRock’s Larry Fink said “most CEOs I talk to would say we are probably in a recession right now.” JPMorgan Chase said a global recession was even likely. An economic collapse hasn’t materialized. Neither has an economic revival. A lot of federal data is delayed, but the numbers so far show the U.S. economy has held up. The odds of a recession in the coming year have fallen below 25%. WSJ
- The vibe is faculty-lounge-meets-Wall-Street. A house-built “thematic robot” blends human knowledge and questions with computing power and big data to pick winners and losers in the market. The system keeps a “human in the loop” to train and and fine-tune systems and to analyze the 1,100 potential market signals, according to a presentation to investors. Referees are assigned to oversee proposals for new trading ideas and the group vets them for use. The group’s investing horizon is typically three or four months. That’s nowhere near as tight as high-frequency traders, whose computers can move in fractions of seconds, but it’s not exactly a buy-and-hold approach either. BB