“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.”
-William Feather
Here’s what you need to know this week:
- Stocks reach another record high
- Markets retreat on news of a new Chinese artificial intelligence model
Banner Week
The S&P 500 notched a record high on Friday on enthusiasm for a more business-friendly environment, particularly in the artificial intelligence sector. President Trump announced a new joint venture called Project Stargate that intends to provide $500 billion into A.I. investment over the next few years. The NASDAQ and Dow Jones came close to touching their own all-time highs on the news. Last week marked the best first week of a presidency since the start of President Reagan’s second term in 1985.
DeepSeek
Unfortunately, last week’s A.I. enthusiasm proved to be short-lived. Late last week a Chinese quantitative trading firm released their own A.I. model named DeepSeek and experts were blown away by the model’s capabilities. The early reaction from investors and analysts was to view this model as a threat to U.S. dominance in the A.I. field and sold off stocks on Monday, especially A.I.-related stocks. Semiconductor manufacturers suffered their worst single day losses since the COVID crash of March 2020.
However, the selloff may prove to be short-lived. Stocks rebounded on Tuesday and optimists claim that the DeepSeek model will incentivize more investment and at a quicker pace to retain U.S. supremacy in the A.I. race. Investors are now looking ahead to Federal Reserve Chairman Jerome Powell’s speech later today. Analysts overwhelmingly expect the Fed to hold interest rates steady and will be paying close attention to any clues from Powell as to the Fed’s next move. For now it looks like artificial intelligence may compete with interest rates as the driving narratives for markets this year.
What Else
- The US GDP report for the fourth quarter of 2024 will be released tomorrow
- President Trump has ordered a pause to all federal grants and loans, although Congress is still debating the details
- Israel and Lebanon have extended a ceasefire agreement
- Rainstorms have brough relief from the California wildfires but also risk mudslides and toxic runoff
- The Kansas City Chiefs and Philadelphia Eagles face off in Super Bowl LIX on February 9th
What We’re Reading
Two new lunar missions launched from NASA’s Kennedy Space Center in Florida earlier this month and will (hopefully) land on the moon in the coming weeks. One mission is investigating an ancient asteroid impact while the other will investigate an unexplored lunar crater on the far northern side of the moon’s surface. Click below to learn more:
What’s Happening Downtown
This weekend is your final chance to skate at the Devon Ice Rink in the Myriad Gardens. Tickets are $14 per person or $9 if you bring your own ice skates. Click below to learn more:
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Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, Brandon Ingerson, Jenni Hess