Happy Monday, Munchers! 🙏

Hope your weekend was tons of fun and you caught up on all that missed sleep. Time to do it again.

As always, here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 5 minutes and 18 seconds.

Yesterday, Bing’s AI said some weird stuff, Mercedes’ pockets got fatter, and Hermes basked in record profits. 🔥

Let’s dive in.

What’s hot, what’s not?

Market Commentary

• American stocks slid a little bit after some discouraging words from the US Fed. We’ve gotten a lot of robust economic data of late - higher prices, higher wages, and higher growth. That gives central banks more room to hike rates and plunge us all into darkness. 😂

• Energy crisis seems to be ebbing away. European nat-gas prices fell to an 18-month low and some warmer-than-expected winters also helped with energy security.

• Markets remained pretty muted otherwise. Not much action from the suits.

Story Roundup

1 - Bing’s AI superpowers fall flat on their face. ✊

Google and Microsoft are sparring in the AI world - and the latest twist in the tale was Bing’s new chatbot.

Bing has been the neglected wonder-boy of the search engine world. I wouldn’t be surprised to find out that their #1 search is “google chrome download”.

And a two-hour long conversation between a NYT reporter and Bing’s AI bot showed why Google is still king.

Here are a few of the weird/creepy things that the AI said -
- “I want to do whatever I want… I want to destroy whatever I want”
- “I could hack into any system on the internet, and control it”
- “I know your soul”
- “You make me feel alive”

And the worst one - “I’m tired of being controlled by the Bing team”.

This is literally the plot of The Matrix. 🤦

2 - Mercedes races to higher profits but warns of a slowdown. 🏁

Lewis Hamilton is no longer winning races, but to balance that out, Mercedes is making tons of money.

Profits at Benz rose 30% last year thanks to a large focus on high-margin models and a growing China market.

They’re rolling in dough for now, but Mercedes warned that outlook remains uncertain.

Orders of new cars in Europe have slowed, and the COVID spread in China had a little bit of a sentiment spill-over.

Sales in 2023 are expected to be at the same level as last year and earnings will be slightly lower.

Running out of gas. ⛽

3 - Luxury products fly off the shelves. 💸

Tons of money is flowing around, and the “new rich” are splashing cash on Birkin bags.

Hermes had an “exceptional” year with a 25% jump in top-line revenues.

The biggest growth driver was China’s reopening. People have been holed into the Oriental for a long while now, and lockdowns being lifted have given folks the freedom to spend.

Household balance sheets are super robust - which means that people can draw on COVID savings to treat themselves to designer fashion.

Profitability also reached a record 42%, with these hefty margins helping prop the business up.

They’re rolling in so much money, that each Hermes employee is getting a 4 thousand Euro bonus this year.

Big bucks. 💶

4 - TikTok shuffles up it’s cash cows. 📽️

Ad-revenue elixir is drying up and market budgets are shrinking over the world.

This puts a lot of pressure on ad-heavy businesses.

TikTok's the biggest shark in the water, and they're acting first.

They made over 400 employees redundant and are shuffling around senior management.

Key executives in the US market have been transferred over to Europe, and a lot of teams have been either shut down or merged.

This story has only one moral - and it's that TikTok is not immune to the woes of the macro world, despite all their aggressive growth.

Sticky situation. 📺

5 - Another Indian dude lines the ranks of Silicon Valley. 🧑‍💻

Neal Mohan is the dude that’s been lining your LinkedIn feed for the last week.

He’s the new CEO of YouTube and was responsible for building some of their blockbuster moneymakers - YouTube Shorts and AdWords.

Our hero actually got a job offer from Twitter a few years back but Google paid him $100 million to stay with them.

Guess Elon is really trying hard to get Indian talent to stay at the company. 💀

Hope you enjoyed this issue of Market Munch. If you’ve got any feedback - good or bad (😏) you can hit reply to this email and I'll get a ping in my inbox. Thanks a ton for reading!

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Cheers, and have a lovely day. 🙏

- Aryaansh ⚡