Citi analyst Adam Spielman believes that health care will become increasingly automated by artificial intelligence in the coming years. The market for AI-assisted diagnostic tools is expected to quadruple to US$4-billion in the next four years, benefiting a wide variety of companies including Microsoft Co., NVIDIA Corp. and the health care division of General Electric Co.
AI has been more accurate than human radiologists for a decade, according to Citi, and is challenging doctors’ skills in oncology and stroke recognition. The potential for AI in medical fields is vast. Microsoft, for instance, just paid US$20-billion for a company called Nuance that listens to doctor patient conversations and immediately creates clinical notes. Also, NVIDIA is developing AI that can analyze the function of protein molecules and DNA.
The proliferation of AI in health care faces opposition from doctors who fear being replaced and also patients. The British Association of Dermatologists is fighting the implementation of an AI-based triage tool. Also, a Pew Research survey found that 79 per cent of those surveyed did not want AI involved in mental health.
But it is also the case that wearable technology is expected to provide a gateway to AI acceptance in medical care by eventually providing functions like blood sugar measurement. Those concerned about racial bias in treatment are also likely to support more automation.
Investors can expect the adoption of AI health care as a longer-term trend that will burn slowly. There’s no hurry to get exposure to the theme but investors should be on the lookout for opportunities in the coming years, because the rising costs of health care make the growth potential near-inevitable.
-- Scott Barlow, Globe and Mail market strategist
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Stocks to ponder
Reitmans (Canada) Ltd. (RET-A-X) The retailer has recently been under court protection against its creditors, and shares are down more than 30 per cent since its earnings release last Thursday. But while the stock is no doubt a risky play for investors, the slide seems like an overreaction, especially given the large amount of cash on its books, says Robert Tattersall.
The Rundown
Banking crisis scars struggling U.S. real estate stocks
U.S. real estate stocks are struggling this year after a rough 2022, as fears that banks will tighten lending standards pile pressure on a sector already hit by higher interest rates. But some brave investors see a buying opportunity, as Reuters’ Lewis Krauskopf reports.
As possible U.S. debt limit crisis nears, Wall Street shrugs
Speaker Kevin McCarthy chose the New York Stock Exchange on Monday to deliver his most detailed comments yet on House Republicans’ demands for raising the nation’s borrowing limit. But his comments made little impression on Wall Street, where investors continue to trade stocks and Treasury bonds under the assumption that Congress and President Joe Biden will find a way to avoid a calamitous government default. The lack of a market panic about the talks reflects a been-there, done-that attitude that investors have increasingly taken to partisan showdowns over taxes, spending and the government’s ability to pay its bills on time, which lawmakers often resolve at the last possible moment. But there are reasons to believe that this time could play out differently, starting with the chaos in McCarthy’s caucus — and new warnings that lawmakers might have less time to raise the $31.4 trillion limit than previously thought. Jim Tankersley of The New York Times reports.
Bitcoin miners escape the bear trap
Beleaguered bitcoin miners are finally feeling the spring sunshine after a cold, hard crypto winter. The power-hungry companies that pump new bitcoin into circulation have been thrown a lifeline by the cryptocurrency’s rally to above $30,000 this year, which has conspired with falling electricity prices to boost their profitability. As Reuters reports, the spring thaw has seen investors flock back to publicly traded crypto mining companies
Others (for subscribers)
Number Cruncher: Top 10 underpriced TSX small caps
Wednesday’s analyst upgrades and downgrades
Tuesday’s analyst upgrades and downgrades
Analysts’ forecast returns, yields and recommendations for all stocks in the S&P/TSX Composite Index
Will we have enough nickel for our EVs in 2030? The metal’s latest trends
Vanguard recommends more exposure to long-term bonds
Big investors dump China shares, add oil to portfolios: Goldman
Globe Advisor
BlackRock avoids 60/40 portfolio despite stock and bond rebound
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Ask Globe Investor
Question: My wife and I consider ourselves as financially comfortable in retirement. I have a small pension, and we each collect CPP and OAS. We rent and carry no debt. Is there a time when a retired couple in their mid-70s, each with a TFSA ($86k and $61k), all in mutual funds, should move the funds to cash in a TFSA high interest savings account to avoid fees and the uncertainty of the markets? – R.B., Windsor ON
Answer: If you think you will need access to the cash in the coming year, such a move would make sense. It might even be a good idea if you don’t expect to need the money. I suggest you look at what the mutual funds are returning and compare that with what you could earn from a high-interest savings account or a GIC.
You can check commercial rates at ratehub.ca. For example, Canadian Imperial Bank of Commerce is currently offering 5 per cent to new depositors for 120 days in a high-interest account, with a minimum balance of $25,000. Several small financial institutions are offering one-year GICs in the 5 per cent range. These rates and promotions change constantly so make sure any deal that appeals to you is still available.
Comparing your mutual fund returns with guaranteed interest rate options will enable you to better understand the risk/return potential of your decision.
– Gordon Pape (Send questions to gordonpape@hotmail.com and write Globe Question in the subject line.)
What’s up in the days ahead
Billionaire investor Ken Fisher tells us why stock investors shouldn’t fear higher bond yields.
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Compiled by Globe Investor Staff