You're listening to Roundtable.
I'm Niu Hengling, joined by Steve and Fei Fei.
Coming up soon.
Markets are often described as a rational system, driven by data, forecasts, and fundamentals.
Weather, by contrast, feels physical, local, and a little unpredictable.
But in reality, the two might have been quietly connected.
This episode looks at how climate conditions are increasingly being treated not as background noise, but as financial signals.
You start exercising regularly, you sleep earlier, you eat better and then ironically, you get sick.
A fever, a sore throat, a cold that keeps coming back.
It feels like a betrayal.
Wasn't exercise supposed to make you healthier?
If it has ever happened to you too, don't miss this discussion.
But before that…
At first, weather and stock prices don't seem connected.
One is governed by atmospheric pressure and seasonal cycles, the other by confidence, expectations and capital flows.
But over time, economics and investors have noticed a pattern.
When weather turns extreme, markets don't stay calm.
Heat waves drain energy systems, heavy rain delays construction, storm warnings trigger anxiety long before any damage occurs and increasingly those reactions leave measurable traces in market data.
In China, researchers are now using artificial intelligence to study these connections at scale.
So how exactly does weather get priced into markets and why does it matter?
Yeah, this is a really interesting topic to see how weather and the stock market are very, very closely related.
This is a new AI tool developed here in China at Fudan University and the China Meteorological Administration.
They work together on this one, and it's called Shangji.
And Shang-Chi is changing the stock market game by predicting market moves based on weather forecasts.
So imagine that you had an app on your phone for the weather, which you do.
But imagine that weather app could also tell you how the stock market will react, which it does not.
Right.
But that's kind of what Shang-Chi is.
It's this AI tool that has one specific job.
It finds hidden patterns linking past weather to past stock prices, and then it uses those patterns to predict what will happen to stocks when future weather hits.
It's really kind of an unprecedented tool on perhaps this scale or at least this level of transparency.
In general, we can kind of get to the connection.
It's a very vague feeling.
It is something that is not measurable, but we get it if it's extreme weather.
Perhaps people would not be going out a lot, spending a lot, which would in turn affect people.
The stock market a little bit.
It's a very vague feeling, but exactly how does it move the markets?
I mean, what are some concrete logic behind it?
Well, majorly weather can affect stock markets in two clear ways.
One is the direct hit.
For example, a drought is happening in central part of China and that drought kills a lot of wheat crops and that can lead to agricultural stock drops.
That is the direct ones.
And the less indirect hit is the less obvious, but can also be a powerful force that Xiangji tracks.
For example, research shows that the mere warning of bad weather can crash stocks before any damage occurs.
For example, a company is headquartered in the city of Shenzhen and a typhoon alert is issued and that can affect the share prices of that particular company.
And the reason that those share prices would be affected because of that red alert for the weather.
What did you say typhoon?
Typhoon, yes.
That typhoon warning is because big investors like fund managers and institutional traders, they hate uncertainty.
So when a severe weather pattern is approaching, that's a warning signal for potential chaos for that particular company.
For example, if there's a typhoon, you might have a break in a supply chain.
You might have port closures.
You might have lost production.
So their instinct from the big investor's side is to sell first and ask questions later.
And they do this because they want to protect their portfolios.
So Shangji is designed to spot and predict this automatic growth. risk-off or sell-off reaction.
So remember what Shang-Chi does.
It looks at weather patterns, a lot of them from the previous decades.
I don't know how far back it goes.
And it's a correlation, right?
So when the weather was this way, how did the stock markets react?
It uses all of that previous data to help institutions, financial institutions, to help companies as well, in different sectors.
Use that information, that data as a predictive tool, as a warning, and it allows them to take action before that extreme weather event actually happens.
So I buy stock A in the market and according to Shang-Chi, a heavy rain is coming.
I can sell it to prevent my loss.
Okay, so you're thinking about this from your own personal point of view, right?
Like you're the investor.
I am.
Shang-Chi is not an app on your phone that you open in the morning and say good morning Shang-Chi.
Where should I invest my money today?
Yeah, that's what I want to do.
No, that's not what this is.
This is a tool for the big money players who move markets, like domestic financial institutions, like major security firms or state-owned banks or asset management companies.
You've got your national social security fund and large pension funds that are involved in this.
You've got your large state-owned and private enterprises.
Think of agriculture or energy or transportation and insurance companies.
And they all want to understand their own financial risk.
Again, this is not an app or a tool for individual investors.
So it's not a recommendation for which stock to buy.
No, you're not going to open the app and it's going to say invest in company A today because it's hot and sunny outside.
If...
Something like that, like what Steve has described, happened on your phone.
Don't believe in it.
So it does not exist because it does not exist.
So I guess Changji is not a tool for us.
It doesn't predict the weather.
It doesn't predict the stock market for sure as well.
And I think the platform works like a formula that he looks back I don't know a hundred years of weather patterns and stock market prices.
And they worked out different formulas.
So when big investors can look at this formula to predict their financial decisions.
Correct.
All right.
So previously, we know there is the correlation, but we don't know how exact the link can be or how close we can predict the changing stock market just because we saw weather forecast today.
But now, because of this app, we kind of have a better understanding.
We know that with this heavy snow something might happen in the stock market about my company's stock price.
So as a company, what can I do?
I cannot stop the heavy snow from coming.
Correct.
But if you know the then you can act accordingly.
So let's say that you have a major fruit producing company in Xinjiang or something like that, and there's a big snow.
Let's use the big snow as an example, or a severe cold snap is coming.
Shang-Chi's data will tell your company historically, your stock drops 5 when a big cold snap comes, because investors fear damage to your apricots or your grapes or your avocados or whatever it is that you produce.
Now the old response from the company, from the fruit maker, fruit grower, would be oh well, cold weather's coming.
Let's hope that our orchards will survive.
And let's hope also that our investors don't dump our stock.
Because we know from Shang-Chi a cold snap hits, the stock price will drop 5 and the management of that company will just try to figure it out.
It's about being reactive as opposed to proactive.
That's the old way.
But the new way is completely different.
So the company... makes moves before that cold weather snap comes in two critical steps.
Number one is the operational plan.
So the company, the fruit grower, will execute a kind of mitigation plan to reduce the real damage.
Now that can come in many different ways.
Maybe the Growers will activate frost prevention systems like water sprinklers and wind machines, or maybe they will secure contracts to secure backup apricots or backup avocados from a partner greenhouse in Yunnan, for example, to ensure that their supply remains strong.
They also might alter their agricultural insurance and contact the provider to initiate the assessment process before it actually begins.
That's step one.
Step two, now this is where we're protecting the stock price.
This is where the communication with the financial movers, if you will, takes place.
The CEO of the fruit company will have a meeting, probably a very urgent meeting, briefing or issuing a detailed disclosure to the stock exchanges about their plan.
So basically, what that telephone conversation will be is, we know the cold snap is coming.
We know that our stocks typically dip 5 when the cold snaps come, but we have activated our plan, our protection plan.
Therefore, we do not expect a big impact to our supply chains, to our supply overall, our crop.
So you don't need to worry.
You don't need to dump our stock.
You can tell the investors that.
So previously, as a company management, I only react to the bad weather.
And hope.
And hope.
But now, not only am I reacting to the bad weather in the sense that I move around my asset, I talk to my partner companies, but I also notify all of the stakeholders of my company about the things that I'm doing, the proactive approach I'm taking, so that they know the risk or the potential.
They know you have a plan in place.
They know I have a plan in place and I am removing the uncertainty away from their mind.
The panic.
The panic from their mind.
The panic and also the uncertainty probably will happen to my company.
So they know that, ooh, everything is under control.
Correct.
And, as the management, if I'm smart enough to make those decisions, that's great, even before the Shangzi app.
But as someone who is probably middle class, I need to convince my boss to do to make all these proactive decisions.
And that needs the data from Shangzi to let them know there really is a link and they really need to do this.
Your boss is the person who should be taking the reins on this.
They shouldn't have to be told by some of their employees.
Yes.
But one tiny question.
Do we really care about a temporary stock dip this much?
I mean when I'm trying to convince my boss it's something important.
I tell them why there is a correlation.
It is definite.
And I also, do I need to tell them how come it's something that they really need to act on?
Well, I think every company watch their shares pretty closely and they are pretty mindful about even a small dip in their prices, primarily because you know a plunging stock can weaken the company's balance sheet.
So there is the financial risk coming from that.
And then there is this reputation risk that you will be on the news.
Certain company share, the share prices plummeted because of this condition and you will be on the news and that will damage the company standing as a reliable partner and reliable player on the market.
Also, that also means for employees, their stock incentive plans lose value.
And so that also makes the company hard to retain top talent.
So when it comes to a dip in the stock price, it's not just about financial returns.
It's coming to their reputation, coming to their operational lifeline, and also strategic position.
So it's a big deal.
Well, I mean, yeah, reputation is one thing.
And that is a concern when your stock prices fall.
But another thing is absolutely the financial side of things.
Because if your stock price falls...
And let's say that you're an avocado grower that's looking to expand.
But to expand, you need loans.
You need credit from the banks.
But the bank will look at you and say, well, wait a minute, your stock price just fell by 7%.
Well, that's not really good.
So, okay, there's two things.
Number one we might not give you a loan at all, but if we do, then we're probably going to charge you a higher interest rate to get that money back.
There's one big financial problem.
Here's another one.
You ever hear of a hostile takeover?
So if your stock price falls a lot, there are companies out there that will say oh, this is a good buying opportunity.
They'll snatch up all that stock.
And guess what, Mr. CEO of the avocado company?
You're gone.
Like the vulture.
Yes, exactly.
They saw a good business opportunity to buy your business because the stock prices were so low that that's exactly what they did.
And you are not a part of their future plans.
And we are explaining the situation from a perspective of one company.
Yes, it's very important.
But overall, if we take a look at the entire financial situation, the entire economic outlook of an industry or even of an entire country, we would understand how come the uncertainties are really there.
Factors that cannot be predicted yet have a huge impact, which means if this kind of algorithm can remove that one factor, or at least make the effect of it, the influence of it, slightly lower, it can affect the entire industry, the entire market in a very positive way.
Yeah, for example, let's say, an extreme flood hits the Pearl River Delta, which is a major manufacturing hub in China.
And a lot of electric manufacturers, they face problems and their stocks start to plummet.
And then that will lead to a sector-wide crash, like analysts spooked, downgrade the entire manufacturing sector from this region.
And then investors are getting nervous and start to sell other manufacturing shares from the same region.
And even it can expand to other regions here in China.
And then the banking system starts to see stresses in this pillar sector and then becomes cautious about lending as well.
So you never know the ripple effects.
So it's necessary almost.
And we see China being the pioneer in launching such major state-supported public AI model.
It indicates the expansion exact purpose, and we also see other countries pursuing similar goals through private finance, and western hedge funds use similar data for priority uh, priority trading, not public stability, but the philosophical approach, the first.
Yet we see similar trends in the use of ai, in the application of it.
So in general, we hope that this kind of, not only the Shang-Chi AI, but also other kinds of AI that can draw the correlation between two phenomena or two trends that used to vaguely link with each other yet do not have measurable indicators, can help us understand the world in a better way, can serve as early warning system for the national development and can, in turn, allow us to reinforce the potential problems so that we can deal with them the next time they arrive.
You're listening to Roundtable coming up next.
Let's welcome.
Let's talk about the fact that sometimes exercise is not entirely good for you.
And why is that?
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You're listening to Roundtable with me, Steve Hatherly and Fei Fei.
Steve, you exercise a lot.
Have you had any experience?
When you start exercising, you feel like you're less healthy than you expected, catching a cold just a little bit.
It usually happens in the beginning of exercise, I think.
When your body's not used to it.
You leave the gym and then for maybe a day or two or maybe three, depending on how hard you exercise.
Yeah, you just don't feel really good.
And there was kind of a thought out there that they called it the open window theory.
And that theory was that for three to 72 hours after strenuous exercise, your immune system is suppressed or temporarily shut down.
And during that window, during that 72-hour period, it was thought that the body's defenses were too low to fight off viruses and bacteria.
But over the past couple of decades research in exercise immunology, it's shown that the initial view on the immune system as simply strong or weak is really overly simplified.
Your immune system isn't just a switch that turns on or turns off.
It operates more like a Like a dynamic system.
It's constantly adjusting to the type or intensity or duration and recovery rhythm of certain types of exercise.
But we're not overthrowing the longstanding theory that exercising is good for you.
No, we are not.
Of course not.
Our audience went, gym membership canceled.
Finally, I don't have to jog.
Cheeseburgers for everyone.
We still have to, or we still can opt for a healthier lifestyle by exercising, or include exercise in our daily routine a bit more.
Yeah, but I think what the study is trying to say is that they did.
Many studies have noticed the pattern that after high intensity exercises, some of your immune markers will fluctuate.
But that doesn't mean that your immune cells are dying or breaking down.
But instead they're just moving out of the bloodstream and into frontline tissues like your lungs, your gut, your skin.
So your body is to, your immune system is not collapsing.
It's just being redeployed.
Open window.
Yeah.
That's the open window.
Yes.
And it's not about, well, it's about two different things.
It's about how hard you train and how much you train.
So they call it HIIT, right?
High intensity interval training.
And when you keep those types of exercises within the recommended limits, then your immune system doesn't get thrown out of balance.
The problem starts when you start hard training sessions that suddenly get longer, and then all of a sudden they become more frequent.
So let's say you were doing HIIT type exercises and that would be like, for example, on a treadmill, you run really fast and then you walk for 30 seconds and then you run really fast for a minute and then you walk.
So hard exercise, short break, hard exercise, short break.
When you start doing that, say every single day, then your body doesn't have a chance to recover like it did before.
And in those cases, from the study results, both the number and the performance of certain immune cells can dip for anywhere from 3 to 72 hours.
And during that time... then your body's defenses against infection may be temporarily weaker.
But again, it's not if you're doing normal types of exercise.
It's if you're pushing your body too hard with not enough time to recover.
But to be honest, I think every individual can be different.
So my first takeaway here is to be aware of the situation and pick the right time to start exercising if you are really serious about it.
And also one, we want to do hard training, hard exercise.
There are also tips that ordinary exercisers can follow.
Yeah, for example, I think here at, the big takeaway for me is that your rest sometimes is more important than the level of intensity of exercises that you are taking.
Especially when it comes to the HIIT session that Steve just mentioned, it's very popular.
A lot of people believe it's better for your body and it can also help with you losing weight.
But you also need to give your body at least one day to recover and rest.
Yep.
That HIIT training, it has two different sides.
So in the short term, it can spark a little bit of an inflammatory response in your body.
But over the long term, it can improve how well your immune system regulates itself.
What determines which way it's going to go is whether the intensity, the frequency and the recovery are in sync with each other.
And studies they found across different studies.
As a matter of fact, they found that regular, well-structured exercise can help your immune system settle into kind of a more balanced or anti-inflammatory mode.
So we still recommend workout.
100 000 million, billion percent.
Yes, just do it right and make sure, make sure your body has enough time to recover.
And i think the best advice that i can give that i'm passing on, by the way, from the numerous trainers who have tried to fix me in the past listen to your body and it will tell you I am tired today.
Don't push it too hard.
You're not doing yourself any favors, but don't don't push it at all.
Yeah, still push it a little bit and by the at the same time, try stop smoking, eat a healthy and high in fruits and vegetable diet and Besides, exercise regularly.
You can also, you know, maintain a wealthy weight.
Maybe that is already the goal of the exercising.
And yes, get more sleep, drink only in moderation if you drink at all.
And these are some tips that can keep you healthy.
