Stocks Gain for Second Month in a Row
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Stocks Gain for Second Month in a Row

Dow exits bear market after Fed chief’s comments fuel hopes that the pace of interest-rate increases would slow

By KAREN LANGLEY
Thu, Dec 1, 2022 9:08amGrey Clock 3 min

The S&P 500 notched a second month of gains but remained on track for its worst year since 2008 after rapidly rising interest rates battered stocks.

The broad U.S. stock index is down about 15% this year even after rallying in October and November. The tech-heavy Nasdaq Composite, whose members tend to be especially sensitive to changing rates, has slumped 27% in 2022.

Stocks have pulled back this year as the Federal Reserve lifts rates in an attempt to tame sky-high inflation. Higher rates give investors more options to earn a return outside the stock market and ding the worth of companies’ future earnings in commonly used valuation models.

“It’s been a pretty one-dimensional year,” said Matt Orton, chief market strategist at Raymond James Investment Management. “The persistence of inflation has dominated everything else.”

Major indexes have pared their losses in recent weeks, boosted by a slowdown in inflation and hopes that the Fed will slow its campaign of rate increases starting in December.

That optimism was bolstered Wednesday when Fed Chairman Jerome Powell indicated in a speech that the central bank is on track to raise interest rates by a half percentage point at its December meeting. That would mark a downshift after a series of four 0.75-point rate rises.

Stocks rallied as Mr. Powell spoke, lifting the S&P 500 3.1% for the day. The Dow Jones Industrial Average rose 2.2%, or about 735 points, in 4 p.m. ET trading, while the Nasdaq Composite jumped 4.4%. The sharp move was enough to put the Dow industrials back in a bull market, defined as a 20% rise from a recent low.

“Today’s speech gives more hope for the possibility of that elusive soft landing,” said Hank Smith, head of investment strategy at Haverford Trust. “From the market’s perspective there’s the chance of a soft landing as opposed to a hard landing that’s a traditional recession.”

Investors will closely watch inflation data due to be published on Dec. 13 for further clues about the path of interest rates.

“Operation catch-up is what this year has been all about and I think it’s over,” said Hani Redha, portfolio manager at PineBridge Investments. “They’ve caught up. They’re in a decent place,” he said of the Fed.

Still, Mr. Redha said Mr. Powell could be seeking to push back at expectations of a looming pivot toward easier monetary policy.

Mr. Redha said stocks are likely to come back under pressure in early 2023. The Fed, he said, will continue to tighten monetary policy through its bondholdings even if it stops raising interest rates, while a recession will hurt earnings.

Money managers also are eying corporate earnings as a potential drag on stocks in the months to come. Analysts are forecasting profits from S&P 500 companies will rise more than 5% next year, according to FactSet. But many investors think those projections are unrealistic.

“Earnings estimates are too high for 2023,” said Niladri Mukherjee, head of CIO portfolio strategy for Merrill and Bank of America Private Bank. “They need to come down.”

Government bond prices have risen since data published Nov. 10 showed inflation slowed in October, sparking hopes the Fed will ease off the brakes.

The yield on 10-year Treasurys declined to 3.699% Wednesday, from 3.746% Tuesday. It is down from more than 4% at the start of the month.

Yields on longer-term U.S. Treasurys have fallen far below those on short-term bonds, a sign investors think the Fed is close to winning its inflation battle—and that the economy is heading toward recession.

Falling yields, coupled with easing fears of a steep European downturn, have pulled the dollar down from multiyear highs. The WSJ Dollar Index fell 4.2% this month through Tuesday, putting it on pace for its largest one-month percentage decline since 2010.

Global markets broadly rose Wednesday. Travel, leisure and auto stocks helped push the Stoxx Europe 600 up 0.6%. China’s Shanghai Composite Index added about 0.1%. The Hang Seng rose 2.2%, closing out the biggest one-month advance for the Hong Kong benchmark since 1998.

Oil benchmark Brent crude rose 2.9% to $85.43 a barrel. Traders are awaiting details of the price cap that the U.S. and its allies are due to impose on Russian oil next week. The level of the cap is still under negotiation in the European Union.



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Should AI Have Access to Your Medical Records? What if It Can Save Many Lives?

We asked readers: Is it worth giving up some potential privacy if the public benefit could be great? Here’s what they said.

By DEMETRIA GALLEGOS
Tue, May 28, 2024 4 min

We’re constantly told that one of the potentially biggest benefits of artificial intelligence is in the area of health. By collecting large amounts of data, AI can create all sorts of drugs for diseases that have been resistant to treatment.

But the price of that could be that we have to share more of our medical information. After all, researchers can’t collect large amounts of data if people aren’t willing to part with that data.

We wanted to see where our readers stand on the balance of privacy versus public-health gains as part of our series on ethical dilemmas created by the advent of AI.

Here are the questions we posed…

AI may be able to discover new medical treatments if it can scan large volumes of health records. Should our personal health records be made available for this purpose, if it has the potential to improve or save millions of lives? How would we guard privacy in that case?

…and some of the answers we received. undefined

Rely on nonpartisan overseers

While my own recent experience with a data breach highlights the importance of robust data security, I recognise the potential for AI to revolutionise healthcare. To ensure privacy, I would be more comfortable if an independent, nonpartisan body—overseen by medical professionals, data-security experts, and citizen representatives—managed a secure database.

Anonymity cuts both ways

Yes. Simply sanitise the health records of any identifying information, which is quite doable. Although there is an argument to be made that AI may discover something that an individual needs or wants to know.

Executive-level oversight

I think we can make AI scanning of health records available with strict privacy controls. Create an AI-CEO position at medical facilities with extreme vetting of that individual before hiring them.

Well worth it

This actually sounds like a very GOOD use of AI. There are several methods for anonymising data which would allow for studies over massive cross-sections of the population without compromising individuals’ privacy. The AI would just be doing the same things meta-studies do now, only faster and maybe better.

Human touch

My concern is that the next generations of doctors will rely more heavily, maybe exclusively, on AI and lose the ability or even the desire to respect the art of medicine which demands one-on-one interaction with a patient for discussion and examination (already a dying skill).

Postmortem

People should be able to sign over rights to their complete “anonymised” health record upon death just as they can sign over rights to their organs. Waiting for death for such access does temporarily slow down the pace of such research, but ultimately will make the research better. Data sets will be more complete, too. Before signing over such rights, however, a person would have to be fully informed on how their relatives’ privacy may also be affected.

Pay me or make it free for all

As long as this is open-source and free, they can use my records. I have a problem with people using my data to make a profit without compensation.

Privacy above all

As a free society, we value freedoms and privacy, often over greater utilitarian benefits that could come. AI does not get any greater right to infringe on that liberty than anything else does.

Opt-in only

You should be able to opt in and choose a plan that protects your privacy.

Privacy doesn’t exist anyway

If it is decided to extend human lives indefinitely, then by all means, scan all health records. As for privacy, there is no such thing. All databases, once established, will eventually, if not immediately, be accessed or hacked by both the good and bad guys.

The data’s already out there

I think it should be made available. We already sign our rights for information over to large insurance companies. Making health records in the aggregate available for helping AI spot potential ways to improve medical care makes sense to me.

Overarching benefit

Of course they should be made available. Privacy is no serious concern when the benefits are so huge for so many.

Compensation for breakthroughs

We should be given the choice to release our records and compensated if our particular genome creates a pathway to treatment and medications.

Too risky

I like the idea of improving healthcare by accessing health records. However, as great as that potential is, the risks outweigh it. Access to the information would not be controlled. Too many would see personal opportunity in it for personal gain.

Nothing personal

The personal info should never be available to anyone who is not specifically authorised by the patient to have it. Medical information can be used to deny people employment or licenses!

No guarantee, but go ahead

This should be allowed on an anonymous basis, without question. But how to provide that anonymity?

Anonymously isolating the information is probably easy, but that information probably contains enough information to identify you if someone had access to the data and was strongly motivated. So the answer lies in restricting access to the raw data to trusted individuals.

Take my records, please

As a person with multiple medical conditions taking 28 medications a day, I highly endorse the use of my records. It is an area where I have found AI particularly valuable. With no medical educational background, I find it very helpful when AI describes in layman’s terms both my conditions and medications. In one instance, while interpreting a CT scan, AI noted a growth on my kidney that looked suspiciously like cancer and had not been disclosed to me by any of the four doctors examining the chart.

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