With the market stabilizing a bit after a multi-week selloff, let’s take a quick break to take a look at something that will likely blow your mind. A quick backstory is necessary to set this up, so here we go. Every night (or at least almost) before my seven-year-old son goes to bed, we set aside time where he can ask me any questions he wants. And more often than not, his innate curiosity, combined with his engineering/mathematical bias, lead to some fascinating discussions.
This week was no different. It started with a question he’s asked before (I think sometimes he likes to know the approximate answer before I give it), “How many Olympic swimming pools could fit in Burt Lake?” For anyone unfamiliar, Burt Lake is a large inland lake in northern Michigan where we spend some time in the summer. And since he asks these very specific questions, yes, more often than not, I enlist the help of AI (this is important) to answer them.
It goes through the calculation, 17,120 acres with an average depth of 35 feet converted to cubic feet, 7.48 gallons per cubic foot for a total of 195 billion gallons. Each Olympic swimming pool holds about 660,000 gallons, so in total, ~296K could fit into the lake. Very cool.
Now, finally, we’ve made it to the part that is beyond cool and is likely to blow your mind. He proceeded to ask me, “What is the smallest thing you can see?” I have no idea, so back to my AI assistant. And this is where it starts to get a bit crazy. Apparently, the smallest visible objects to the human eye are about 1/10th of a millimeter (or 100 microns). This is roughly the diameter of a human hair.
But that wasn’t enough, and he then asked, “What is the smallest thing?” So, I told him an atom is the smallest thing (which is not quite correct since atoms are composed of protons, neutrons, and electrons, but close enough). The obvious follow-up question was, “How big is an atom?” Back to AI, which tells me they are typically 0.1 to 0.5 nanometers. Ok, they just introduced a new unit of measurement, and this is where it becomes close to unfathomable. A nanometer is one billionth of a meter. That’s right, chop one meter into a billion pieces, and you get a nanometer.
Unfortunately, that isn’t easy to comprehend. Let’s go back to the human hair, which is 100 microns. One micron is equal to 1,000 nanometers. Therefore, a human hair is about 100,000 nanometers in diameter. Still, at these levels, this doesn’t compute for most people. So here is an example we came up with that relates more easily. If a nanometer were equal to the size of a marble, the human hair would be almost 12 football fields long! Or if a nanometer were equal to one inch, the human hair would be over 1.5 miles long!
Now, to bring this full circle. Most nights, when I’m asked these questions, there is no way I would have been able to answer them quickly without the help of artificial intelligence. And how are these questions being answered by AI? Through the use of complex models running on extremely powerful servers at one of the many data centers throughout the country. And many of these data centers are now running the top-end Nvidia (NVDA) Blackwell B200 chipsets.
And these ultra-advanced chipsets are manufactured by Taiwan Semiconductor (TMSC), utilizing some of the most cutting-edge technology available. And guess what? The transistors that are being printed on the chipsets are only four nanometers! This allows the chip to have over 200 billion transistors. It’s hard to fathom how that is even possible. However, it is happening, and all of these advances allow for faster and more powerful computing while using less energy, which is good as we enter the age of AI.
I know my mind was blown away after digging into this rabbit hole, but hopefully, you enjoyed this tech/engineering/seven-year-old curiosity detour, too. I’ll leave you with the video below, which attempts to show the size of modern chip transistors in another way. Enjoy!
Markets / Economy
- Equity markets stabilized a bit this week and turned positive after a string of challenging performances. The S&P was up 0.5%, the Nasdaq was up 0.2%, and the small-cap Russell 2000 was up 0.6%.
- U.S. retail sales increased 0.2% MoM February, rebounding from a downwardly revised 1.2% fall in January but well below forecasts of a 0.6% rise.
- As expected, the Fed kept the federal funds rate unchanged at 4.25%-4.5% during its March meeting, extending the pause in its rate-cut cycle that began in January.
Stocks
- U.S. equities were in positive territory. Energy and Financials were the top performers, while Consumer Staples and Materials lagged. Value stocks led growth stocks, and small caps beat large caps.
- International equities closed lower for the week. Emerging markets fared better than developed markets.
Bonds
- The 10-year Treasury bond yield decreased six basis points to 4.25% during the week.
- Global bond markets were in positive territory this week.
- Corporate bonds led for the week, followed by government bonds and high-yield bonds.
