Innovating the Future

Jun 8, 2018   //   by Bruce Mason   //   Weekly Market Update  //  No Comments

It was a surprisingly quiet week that saw the Dow Jones Industrial Average pick up almost 700 points.  I had to go back and double check my numbers because this stealth rise escaped even my notice.  While most of the attention is on President Trump and the G-7 meeting, there was a lot of company news that was reported this week, as well as a few other points of interest.  Let’s dive in.

It seems fast food innovation is picking up speed as these companies work hard to attract, retain, and in some cases, expand their customer base.  For example, McDonald’s has been testing self-serve kiosks allowing customers to place orders directly.  One surprising finding is that customers tend to spend more when ordering directly on a kiosk.  As a result, the company will be adding kiosks to one thousand restaurants each quarter for the next two years.  Perhaps a coincidence, McDonald’s sent an email out to U.S. employees this week stating there will be another round of layoffs announced at the June 12 town hall meeting.  Lastly, it appears President Trump and Kim Jung Un do have at least one thing in common:  They both love McDonald’s.  North Korean leader Kim Jong Un reported that he may allow McDonald’s into the nation as a goodwill gesture to the U.S.  I’m sure goodwill is his motivation.

In other food news, Kentucky Fried Chicken (KFC) is testing vegetarian options.  The company is devising a fake meat version aimed at the U.K. as part of a move by the British government to reduce calories by 20% per serving by 2025.  While I am not sure how I feel about fake meat, reducing calories is something I fully support.  And lastly, the International House of Pancakes (IHOP), which has been around since 1958, is looking to change its image.  The company announced it will rebrand soon, starting with a name change to IHOB.  Management is being coy regarding what the new name means, but many speculate the “B” stands for Burgers, Bacon, or perhaps most likely, Breakfast.  The full announcement should come soon.

In other news, IBM has once again retaken the title for the world’s fastest supercomputer.  The numbers are mind boggling.  The supercomputer dubbed Summit can perform 200,000 trillion calculations per second, or 200 petaflops.  That’s eight times more powerful than Cray’s Titan supercomputer and nearly twice as fast as the peak speed for Chinese supercomputer Sunway TaihuLight.  And some people don’t think AI is on the horizon?  The computer was developed at a cost of $200 million and will be used to apply machine learning to genetic data to find patters for treatments for Alzheimer’s, heart disease, and opioid addiction.  The next global ranking of fastest supercomputers comes June 25, but as of November, China held 202 of the spots compared to 143 for the United States.

While not all innovation is of the product variety, this innovation in marketing/sales caught my attention.  Mercedes Benz announced the launch of a new subscription service.  The services offer Signature, Reserve, and Premier tiers ranging in price from $1,095 to $2,995 per month.  Subscribers may choose from all the vehicle body styles offered in that subscription tier and may change cars as frequently as they choose.  With self-driving cars still on the distant horizon, and electric cars slowly gaining market share, it seems an expanded lease model may be an interim step toward a future in which people never really own cars like we do today.

I know I didn’t get to any economic data this week but rest assured there will be many weeks that you’ll wish I had other things to talk about.  So in closing, I want to bring you a bit of news that might just help you live longer.  Scientists from five universities have discovered that walking faster could add years to your life.  Before you scream fake news, there just might be something to this.  Walking at an average pace was linked to a 20% reduction in the risk of mortality compared to walking at a slow pace, while walking at a brisk pace was associated with a risk reduction of 24% according to the study.  A similar result was found for the risk of dying from cardiovascular disease.  Also, the study found it’s not too late to start.  In fact, the benefits were far more dramatic for older walkers.  Average pace walkers aged 60 years or over experienced a 46% reduction in risk of death from cardiovascular causes, and fast paced walkers a 53% risk reduction.  So, get out this weekend and walk a little.  It might just add some years to your life.  Now you know.

June 8,2018

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