External headlines on July 15: IBM stock price plummeted, Open AI is developing AI smart speakers, and Warsh reiterated his determination to fight inflation and reform the central bank
Global financial media last night and this morning The headlines of common concern include: Federal Reserve Chairman Warsh downplays the impact of CPI data and reiterates determination to fight inflation and reform the central bank IBM's stock price plummeted, warning that Q2 performance was not as good as expected, and the CEO admitted that he was not coping well OpenAI is developing a smart speaker that turns into an AI companion as its first hardware product Oracle launches unified AI Agent building tool, integrating no-code and professional development Fed's Bowman: Banks shouldn't be 'micromanaged' on issues like AI Foreign holdings of U.S. Treasury bonds rose in May, with Canada increasing the most Federal Reserve Chairman Kevin Warsh said Fed policymakers are concerned about Zero tolerance for inflation and reiterated its commitment to curb high inflation that has lasted for five years. "Members of the committee have zero tolerance for continued high inflation," Warsh told a congressional hearing. "We also share a strong commitment to restoring price stability." Since taking office in May, the new Fed chair has emphasized policymakers' commitment to curbing inflation and said the primary goal is to get monetary policy right. Preliminary second-quarter results released before the bell on Tuesday showed revenue and profit below market expectations, with Chief Executive Officer Arvind Krishna acknowledging the company's failure to adapt in time to sharp changes in customer spending patterns. Affected by this, IBM's stock price plunged more than 20% during the session, the largest single-day decline in decades. IBM expects second-quarter revenue of approximately US$17.2 billion, a year-on-year increase of 1%, but lower than analysts' expectations of approximately US$17.86 billion; adjusted earnings per share are expected to be US$2.93, which is also lower than market expectations of US$3.01. Looking at different businesses, software revenue increased by 5%, consulting business was basically flat, while infrastructure business sales unexpectedly dropped by about 7%. According to people familiar with the matter, OpenAI’s much-anticipated first hardware device will be a removable, screen-less smart speaker, positioned as a new type of home computer in the era of artificial intelligence (AI). People familiar with the matter said that the product, which is still under development, will become a home AI companion with human characteristics. The device will help users control smart home devices, play media content, answer questions, reply to messages, and invoke ChatGPT’s extensive functions. The device represents a key step into hardware for the leading AI model developer. The company announced on Tuesday the launch of a new AI-native building experience for Oracle Fusion Cloud Applications, which integrates no-code, low-code and professional development tools on the same platform to help enterprises and developers create AI agent applications more conveniently. This new tool is part of Oracle AI Agent Studio and supports three development paths: business users can use natural language to quickly build agents in a code-free environment; developers can use professional tools such as Visual Studio Code, command line interfaces, and Git-based workflows for development. It also supports AI programming assistants such as OpenAI Codex and Claude Code. Michelle Bowman, the Federal Reserve's vice chair for supervision, said banks are more aware of the risks associated with innovation and should make their own decisions about when to adopt new technologies such as artificial intelligence (AI). “The decision of when and how to innovate lies with each bank and its management,” Bowman said in prepared remarks for the Financial Inclusion Conference. “They understand their customers, their communities and their risk appetite better than we do.” The Fed's top bank regulator also said the Fed should set clear expectations around innovation and be transparent rather than micromanage individual business decisions. The size of U.S. Treasury bonds held overseas increased in May, with Canada's holdings, which are sometimes volatile, seeing the largest increase, while Japan's holdings fell. Data released by the U.S. Treasury Department on Tuesday showed that U.S. Treasury bonds held by overseas investors increased by $18.5 billion in May from the previous month, reaching a total of $9.37 trillion, the second highest on record. The data includes both net selling and net buying, as well as valuation changes. The Bloomberg U.S. Treasury Bond Index edged up 0.1% in May, after falling slightly the previous month.