Today’s top stories:  

1. Leading AI companies hit roadblocks in scaling performance.

2. China prepping for trade war before Trump takes office.

3. US inflation rises to 2.6%.

4. Trump’s cabinet picks seem to be based on loyalty as opposed to credentials.

I’m traveling this week, so today’s edition is going to be covering only our Top Stories segment.

Markets Snapshot - Top 5 Economies

Economic Calendar

Today’s top stories

1. Leading AI companies hit roadblocks in pursuit of advanced models 🛑 

Launch dates of foundational AI models

Key takeaways:

• OpenAI's new model Orion falls short of expected performance, particularly in coding tasks.

• Google's Gemini and Anthropic's Claude 3.5 Opus face development challenges and delays.

• Companies struggle to find high-quality training data beyond web-scraped content.

• Training costs projected to surge from $100 million to $100 billion in coming years.

• Focus shifting from larger models to specific use cases like AI agents for everyday tasks.

What this could mean for you:

• Current AI tools like ChatGPT may not see dramatic improvements in the near future like their past models.

• Expect more practical, focused AI features within existing models rather than revolutionary breakthroughs.

• Higher costs of AI development could lead to increased subscription prices.

• New AI tools may focus on specific tasks like email management and travel booking.

What this could mean for the AI industry:

Time for a reality check on those AGI predictions! Looks like building superintelligent AI isn't as simple as throwing more servers and data at the problem. 🤷‍♀️ 

2. China fortifies trade war arsenal ahead of Trump's return 🛡️

Key takeaways:

• China has enacted new laws since 2016 to counter potential US trade actions.

  • Beijing now wields an anti-foreign sanctions law and unreliable entity list.

• Recent actions include sanctions on US drone maker Skydio and threats against PVH brands.

• China controls crucial supply chains for rare earths and lithium.

• Trump threatens 60% tariffs on Chinese imports.

• China failed to meet obligations from 2020 US trade deal.

How it could impact you:

• Expect higher prices on everyday items if 60% tariffs materialize. That $1,000 iPhone? Might need a second mortgage.📱

• Supply chain disruptions could limit availability of electronics and other consumer goods.

• Investment portfolios with exposure to US-China trade could face volatility.

• Job security in export-dependent industries might weaken.

What this could mean for trade relations in the US-China economy:

• The US-China trade relationship is starting to look like a high-stakes poker game where both players keep raising the stakes. 🎲 

• With China's new arsenal of countermeasures and Trump's aggressive stance, we're watching two economic giants playing chicken with global commerce.

• The outcome could reshape everything from your shopping cart to global supply chains. Think of it as economic chess, but where every move affects the price of your morning coffee. ♟️

3. US inflation edges up to 2.6% as Fed weighs rate cuts 📈

Key takeaways:

• October inflation rose to 2.6% from September's 2.4%, meeting economists' expectations.

• Core inflation (without volatile food and energy) remained steady at 3.3% annually, with monthly core prices rising 0.3% for third straight month.

• Housing costs drove half the monthly increase, rising 0.4%.

• Energy prices stayed flat after September's 1.9% decline.

• Recent retail sales data shows continued consumer spending strength.

YoY change in CPI for urban customers comparing all items versus without food and energy

How it could impact you:

• Mortgage rates might ease slightly, but don't start house hunting just yet – the Fed's "gradual" approach means your dream home isn't getting dramatically cheaper anytime soon. 🏠

• Your grocery bills might finally catch a break, with food prices showing signs of cooling. 🛒

• Investment portfolios could see some volatility as markets adjust to rate cut expectations.

• Credit card interest rates could drop slightly, offering some relief on existing debt.

What this could mean for inflation in the US economy:

• The inflation story is like a stubborn teenager – just when you think it's under control, it throws you another curve ball! 🎭

• While we're far from the 9% nightmare of 2022, getting back to the Fed's 2% target seems like trying to parallel park a tank – technically possible but requiring extreme patience and skill.

• With political changes on the horizon and potential policy shifts, the path to price stability might get as twisty as a pretzel. But hey, at least we're not shopping with wheelbarrows of cash!

4. Trump’s #1 quality for top cabinet jobs is loyalty

Key takeaways:

• Trump nominates Matt Gaetz as Attorney General, Tulsi Gabbard for intelligence, Pete Hegseth for defense.

• Senate Republicans signal resistance, with new majority leader Thune's election defying Trump's preference.

• Trump emphasizes loyalty and "anti-woke" credentials over traditional experience.

• Senate historically rarely rejects nominees outright but can force withdrawals.

• Several picks come directly from media backgrounds, particularly Fox News.

What this could mean for government leadership in the US economy:

• The administration's emphasis on loyalty over experience is like hiring a chef based on their Instagram following rather than their cooking skills. 🎪 

• With markets already jittery about political uncertainty, these unconventional picks could add another layer of volatility to an already unpredictable economic environment.

• Wall Street might need to start keeping a Fox News subscription handy to predict the next cabinet nominee! 📺