As we kick off February, markets are weathering multiple assaults on their bull run. We should be rejoicing a pickup in profit growth across multiple sectors with the S&P 500 on pace for a 10% growth in profits vs. 7% anticipated. But earnings are taking a backseat to politics as the Tariff War 2.0 began in full 2/1/25. The opening salvos of Tariff War 2.0 began against Canada and Mexico with a 25% tariff on all imports from Mexico and Canada, exempting energy resources from Canada at 10%. China will also see a 10% tariff on all imports. Importantly, the US government is also suspending the âde-minimisâ exemption for packages and shipments under $800 addressed to individuals. The de-minimis exemption has been a huge driver of global e-commerce â think Temu, Shein, or baubles from Esty international sellers. The point of the de-minimis exemption was to allow insignificant and small items to be disregarded for regulations, duties, or taxes in the context of international trade. Suspending this exemption makes international e-commerce exponentially more difficult and expensive.
Markets are reacting sharply to a new potential threat: what if the USA is not the leader in AI technology and others have figured out how to do it better and more efficiently? That potential game-changing question was brought up by DeepSeek, a Chinese AI app that was recently launched in the US. DeepSeek is majority owned by Lian Wenfengâs quant AI focused Hedge Fund, High-Flyer. They announced the development of DeepSeek in March 2023 and by all measures have exceeded expectations. This app was developed as a response to OpenAIâs ChatGPT, which launched in late 2022 and caused a large scramble to keep up by Chinese tech firms. DeepSeek is like ChatGPT but with a few noticeable differentiators. DeepSeek develops open-sourced free AI models, which means multiple developers can inspect and improve on the software. Their first opensource AI model R1 competes with ChatGPT in areas such as reasoning and code generation and has become the #1 download in the iPhone app store as an AI assistant App. In a very short time (days!) they have overtaken ChatGPT as the top-rated free app. China is flexing its AI muscles this week, and US tech companies seem to be on the back foot.
Bull markets can be killed by policy error, says G Squaredâs Victoria Greene. Victoria Greene, G Squared Private Wealth CIO, joins âThe Exchangeâ to discuss markets, risk of a Fed policy error and her 2025 outlook.
As we wrap up another year of excellent returns, investor angst continued to rise even as markets powered higher, with the S&P 500 logging back-to-back 20%+ returns for the first time since 1997-1998.
I have been very good this year, with minimal volatility and producing 20% returns for the second year in a row! I included more friends in my rally this year, not just the Magnificent 7, and I brought along utilities, financials, and industrials. I even invited some of the old-school blue-chip names like WMT and AXP to join the rally party. I only dropped -8% one time all year, not even the normal -10% correction that would be expected. And with the VIX below 15, you can tell I have been consistent and upward trending. I was very nice this year, not naughty!
CNBC Worldwide Exchange – Greene: Do not knee-jerk in panic. Step back. Take a breath if JOLTS comes in hot or cold.
Victoria Greene, Founding Partner and Chief Investment Officer at G Squared Private Wealth, discusses the trading day ahead. She emphasizes the importance of not reacting impulsively to the JOLTS employment indicator due to its small sample size. Greene also talks about the potential for a rate cut by the Federal Reserve, advocating for slow and steady cuts to stabilize the labor market and stimulate the economy.
