Google loses its Alphabet

In New York, the session was also marked by the individual rather than the collective. The Dow Jones gave up 0.6%, the S&P500 about 1.1% and the Nasdaq 100 more than 1.8%. It must be said that the U.S. technology index paid a heavy price to Alphabet, which collapsed by 7.4%. The parent company of Google paid a high price for the obviously untimely launch of its discussion tool based on artificial intelligence Bard. The group flaunted itself in style by releasing a promotional video in which Bard gets the James Webb telescope wrong. Asked about discoveries to be credited to the telescope, Bard said it was the first to take pictures of a planet outside the solar system, while a European telescope had done so long before it, in 2004. This may be a detail to you, but in the field of artificial intelligence it means a lot, especially that Bard is fallible on a relatively simple question. It's messy, especially when the sequence is used for marketing purposes. One can feel that the Californian group has tried to make a date in the nascent but already merciless competition of artificial intelligence "creators" of content, in the wake of the ChatGPT phenomenon. For a trial run, it was a shot in the arm, or in the foot, it remains to be seen.

It is also, from my point of view, a golden opportunity to remind us that the wheel sometimes turns and that situations that seem to last forever rarely do. This is perhaps what scares investors in Alphabet a little, and certainly Alphabet's managers themselves. Imagine: what if the Microsoft-ChatGPT combination created a must-have search engine? By turning this big loser Bing into a market leader, thanks to features that are far superior to the competition (you can read this article from the Wall Street Journal about the first steps with Microsoft's new solution). It's hard to imagine Google going from 90% to 8% of the search engine market. But ask Nokia executives if they thought they would go from 40% to 0 of the cell phone market in a few years (yes, young investor, Nokia made mobiles). And ask Yahoo executives if they thought the company would be demoted from the undisputed leader of the web to a lilliputian in the sector.

Beyond the case of Alphabet, technology stocks lost ground yesterday. Investors remain in a two steps forward, one step back mode, depending on the oracles about the US central bank's intentions regarding its rate policy. In 2022, these intentions were also at the center of the game but it was more like one step forward, three steps back. So sentiment has improved as the presumed end of the rate hike cycle approaches.

With the macroeconomic agenda still rather thin, it is the corporate results that dominate the discussions. With a good big batch this morning, since Thursday is traditionally the busiest day of the week in this respect with Visa, AbbVie, PepsiCo or PayPal. At 8:30 am, we will still take a look at the weekly employment figures in the United States, which serve as a crucial indicator of the Federal Reserve's monetary policy outlook.

In other news, Volodymyr Zelensky has continued to convince his allies to provide equipment to his troops. The Ukrainian president was in London and Paris yesterday and will be in Brussels this morning. In Turkey and Syria, the death toll from the two devastating earthquakes continues to rise.

Economic highlights of the day: