What I Am Reading

Monday, January 27, 2025

Latest Morning Briefing

Anatomy Of The Bull Market (Will DeepSeek Sink It?)

The current bull market has been driven mostly by valuation expansion; now valuation is historically high. We expect earnings growth to perpetuate the bull market this year; any more valuation expansion could leave the market vulnerable to a meltdown. Our year-end target for the S&P 500 is 7000, based on a solid rise in earnings with no further valuation expansion. … Much of our optimism rests on the Magnificent-7 remaining magnificent. If they don’t disappoint investors, the S&P 500 likely won’t either given their hefty collective share of the index’s market capitalization. … However, a competitive threat to their magnificence has emerged from China: DeepSeek, with reportedly cheaper AI. Could DeepSeek deep-six the Mag-7? ... Also: Dr Ed reviews “American Primeval” (++).

Markets

US

Tax-Cut Wish List Grows for Trump’s ‘Big, Beautiful Bill’Wall Street Journal
The Only “Energy Emergency” Is the One Biden CreatedCity Journal

Europe

Italy Credit Body Sace Signs $6.6 Billion Deals in Saudi ArabiaBloomberg

Geopolitics & trade I

Geopolitics & trade II

Geopolitics & trade III

Industries & companies

AI

How China’s new AI model DeepSeek is threatening U.S. dominanceCNBC

Corporate finance

Beyond markets

CIA Now Favors Lab Leak Theory on Origins of Covid-19Wall Street Journal
How Los Angeles will rebuild homes after the wildfiresCNBC