Economic Outlook
As of right now GOOGLE / WAYMO has begun monetizing some of their self driving vehicles. Development of WAYMO self driving vehicles has been ongoing for over 10 years, and includes cars and trucks, as each is seen to have commercial potential. In four suburbs of Phoenix Arizona (about a 160 km zone) self driving WAYMO ONE taxis are now in operation. Generating revenue after all these years of development and testing is a significant milestone, and puts WAYMO ahead of rivals like GM’s Cruise Automation, and Uber Technologies. All players in this field will certainly want to attract and keep customers and begin to recoup the money invested in the technology so far.
So, how does a customer use the WAYMO ONE taxi service? First, you need to download the WAYMO ONE app and provide credit card details, and then you can use the app to notify the service of your needs, providing your location and a destination. Much like UBER and LYFT, the app will provide a price quote and a time for pick-up. The service is touted to be operating 24 hours a day, however, it is available now only to a few hundred residents who signed up last year, and the exact number of taxis in operation has not been revealed by WAYMO. For cost comparison, the WAYMO charge for a 15 minute ride (about 3 miles) is $7.60, whereas the comparable LYFT charge is $7.20.
At this time WAYMO ONE taxis include a human in the driver’s seat, to intervene only in emergencies, and there is the app or in-car console to link passengers to a WAYMO ONE agent for answering questions and documenting comments. Some report that the ride is a little slow and sometimes jerky. WAYMO works with passenger feedback to help refine all aspects of the WAYMO ONE taxi experience. Only a handful of other startups have monetized driverless technology, in small ways, such as Boston’s OPTIMUS RIDE that has contracts to provide driverless vehicle services in enclosed, low speed environments, like gated business parks and seniors facilities.
There are still significant challenges to making a buck in the autonomous vehicle space. All across the USA there are many laws and regulations that fail to provide a coherent framework for designing the vehicles or the software applications needed to put them to work on their own. Estimates are that over $1 billion has been spent on driverless technology, and over 10 million miles have been traveled. Still, everyone is proceeding with great caution, wanting to ensure that the early adopters have only safe and satisfying experiences, generating enthusiasm, curiosity, and confidence. Given all that, the sky seems to be the limit for this exciting, disruptive technology.
Let Trend Disruptors be your guide to the future, as we continue to identify technology investment opportunities that can lead to financial success. Click here to read more Trend Disruptor blogs.
“Today the bank of Canada announced that they will not be increasing the overnight lending rate. This is a good sign that past rate increases have made an impact and the BoC is observing the change.
The next BoC meeting will be January 9th, where they will revisit increasing rates.” Kyle Green, Owner, Green Mortgage Team
The Bank of Canada today maintained its target for the overnight rate at 1¾ per cent. The Bank Rate is correspondingly 2 per cent and the deposit rate is 1½ per cent.
The global economic expansion is moderating largely as expected, but signs are emerging that trade conflicts are weighing more heavily on global demand. Recent encouraging developments at the G20 meetings are a reminder that there are upside as well as downside risks around …Click here for full article.
Trade war truce. The U.S. and China declared a truce in the trade war, sending global markets shooting up. Commodity prices rose, as one of the key near-term downside risks to demand has been delayed, if not entirely removed. Meanwhile, last week the U.S. Federal Reserve signaled a softer stance on interest rate increases. Taken together, global financial markets have received a dramatic boost…. CLICK for complete article
This week the UN voted on 8 resolutions condemning Cuba’s human rights violations from imprisoning gays, to banning unions, to arbitrary arrests of political opponents. France, German, the UK, the US all voted one way. Guess which way Canada voted.
Market corrections take time to resolve. After a tough month of October, global stock markets had a relief bounce in early November before more U.S.-China trade tensions, fear of slowing global economic growth, declining oil prices, Brexit and so on caused them to retreat again. Markets are now in the process of testing their respective October lows. This type of price development (i.e. initial market decline, followed by an oversold bounce, then a retest of the bottom) is quite normal and is exhibiting characteristics representative of past market corrections.
Beyond this short-term market volatility, we believe the larger fundamental picture remains intact for major global economies. The data and indicators we monitor show that the risk of a global recession is relatively low in 2019. However, the market is not the economy and we can experience a market correction due to excessive optimism and higher valuation without a recession. As long-term investors, we must acknowledge that short-term market volatility is inevitable and is part of investing. During these times, we must not allow our emotions to derail our long-term plan, and conversely, having a cash reserve can allow us to capture opportunities.
At this point, the big question is whether the retest of the October lows will hold and if we can muster a rally into year-end. There are several potential positive catalysts to monitor. The first can occur this weekend at the G20 Summit starting on November 30th in Buenos Aires, Argentina. President Trump and President Xi are meeting to discuss trade talks and if the U.S. and China can come to a more collaborative tone, such as agreeing on a framework or date for further negotiations and holding off on further tariff increases, that would be a positive catalyst for the markets. The second catalyst could come from the U.S. Federal Reserve. Their next FOMC meeting is on December 19th , where the probability of a U.S. rate hike is about 80%, but this has been mostly priced in. What’s more important is their tone and projection for future rate hikes. A more dovish tone and accommodative stance on future increases would be viewed positively by the markets. In fact, we have already seen a hint of that this week when Fed Chair Jerome Powell took a dovish stance in his speech at the Economic Club of New York.
Lastly and close to home, a rebound in oil prices from extreme oversold territory would bode well for Canada and other oil-centric economies. The OPEC nations and Russia are expected to meet on December 6th and have hinted at cutting oil production by about 1.4 million barrels per day to address the current oversupply issue. If enacted, it could be a positive catalyst for the markets. Let’s see if Santa will pay us an early visit this year and give markets a year-end rally.
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