This Hour: Google and the Self-Driving Car

The mass production of the self driving car will be a reality. Alphabet Inc. (GOOGL), still recognized by the name Google by the general public, has renamed its self-driving car project to Waymo. Waymo has become an independent entity within the technology giant. This new entity within GOOGL is now very close to bringing its autonomous driving technology to the public.

Although no deal has been formally announced, the move signals a desire to monetize the company's research. There is fierce competition from a score of rivals, as all are vying to be the first to launch production-ready self-driving cars. Google's program, now in its seventh year, has been a leader in this revolution of self-driving technology, and is now being challenged by companies like Uber Technologies Inc (UBER), Apple Inc (AAPL) and traditional car companies in this rapidly growing industry.

 

"It's an indication of the maturity of our technology," said John Krafcik, Waymo's chief executive, at a press conference in San Francisco. He added (that), "We can imagine our self-driving tech being used in all sorts of areas." The move shows "confidence that we are close to bringing this (technology) to a lot of people," says Krafcik, adding that "We've sort of reached an inflection point." Krafcik reiterated throughout his statements that Waymo has no interest in producing self-driving cars. Waymo's interests lie in developing the technology to drive them. Possible applications would be in ride-sharing, transportation, trucking, logistics, and personal use vehicles.

GOOGL has already made strategic moves to bring the innovating firms of this technology under their umbrella. Making an investment in GOOGL is one of the possibilities available to invest in self- driving technology, along with investment strategies involving GOOGL's competitors AAPL and UBER. Other investment opportunities may be found with Fiat Chrysler (FCHA), Google's first partner. FCHA teamed up with the tech company in May to coordinate their industries to integrate Google's self-driving system into 100 of the carmaker's minivans.

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World Markets

Stock and bond markets may be headed for a fall. A federal monitor of U.S. financial stability issued a statement on Tuesday warning that a market crash could inflict serious damage on banks, life insurers and other important parts of the economy. The Office of Financial Research found stock valuations, that have been measured by comparing prices to earnings, have recorded the same high level that they hit before "the three largest equity market declines in the last century."

The office also reported that commercial real estate prices have climbed while capitalization rates, which measure properties' returns, are close to record lows. A price shock in any one of these markets could upset financial stability by triggering losses in funds and banks that have high leverage or rely on short-term funding, the office reported this in its annual report on the leading risks to the financial system.

Currencies

• The dollar index which compares the US dollar (USD) against a grouping of six major global currencies is recording levels around 101.05 during the Asian trading session.
• The European euro remained basically unchanged at US $1.0628 vs 1 European euro up from Monday's one-week low of US $1.0525.
• The US dollar traded at 115.20 yen vs 1 USD retreating from Monday's 10-month peak of 116.12 yen.
• The Australian dollar traded at US $0.7494 vs 1 USD, very near to the one-month high of US $0.7524 it recorded on Tuesday.
• The Canadian dollar remained at C$1.3135  vs 1 USD, after having risen to as high as C$1.3102 to the dollar on Tuesday, an eight-week high.
• The biggest winner from rallying oil prices is the Russian rouble, which rose 5.4 percent over the past week against the USD to hit a 16-1/2-month high. Currently recording a level 60.7937 Russian Rubles vs 1 USD.

Commodities

Oil prices dropped on Wednesday behind a reported rise in U.S. crude inventories along with an estimate that OPEC may have produced more crude in November than previously thought, potentially undermining the planned output cut.

U.S. West Texas Intermediate (WTI) crude oil futures were down 59 cents, or -1.11 percent, to US $52.39 a barrel at the time of my writing. International Brent crude futures were down 56 cents, or -1.01 percent, at US $55.16 per barrel. Traders said the price falls can be attributed to a report of a surprise increases in U.S. crude inventories. Markets are also focused on an anticipated U.S. interest rate hike that would most likely push up the dollar's value, making dollar-traded fuel imports more expensive for countries using other currencies at home.

"Momentum continues to wane in oil markets with both Brent and WTI slightly lower overnight, following higher than expected API inventory numbers in the United States ... (which) showed an unexpectedly large increase of 4.7 million barrels," says Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore.