Bloomberg Evening Briefing Americas |
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Wall Street had a shock to the system on concerns that a cheap artificial intelligence-model from Chinese startup DeepSeek could make valuations that have powered the bull market tough to justify. From New York to London and Tokyo, equities got hit hard on Monday. And while the slide did come after a torrid rally, the underlying reasons behind Monday's rout could cause longer-term damage. The Nasdaq 100 sank 3% while the S&P 500 dropped 1.5%. A closely watched gauge of chipmakers also plunged the most since March 2020. Nvidia, heretofore the posterchild of America's AI frenzy, sank 17%—the biggest market-cap loss for a single stock ever. But no hard feelings says Jensen Huang: Nvidia's CEO just called DeepSeek's latest innovation "excellent." —Natasha Solo-Lyons | |
What You Need to Know Today | |
While your 401(k) may have taken a tumble today, it wasn't a great day for the world's richest, either. Led by Nvidia's Huang, the planet's 500 wealthiest lost a combined $108 billion thanks to DeepSeek. Billionaires whose fortunes are linked to AI were unsurprisingly the biggest losers: Huang saw his fortune fall $20.1 billion, a 20% drop, while Oracle co-founder Larry Ellison's $22.6 billion loss was larger in absolute terms, but represented just 12% of his fortune, according to the Bloomberg Billionaires Index. Dell's Michael Dell lost $13 billion, and Binance Holdings co-founder Changpeng "CZ" Zhao dropped $12.1 billion. | |
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UBS has begun a wave of job reductions in its home market Switzerland, with hundreds of employees said to have received notice in recent weeks. The current round (employees are able to enter a program which allows up to a year to find a new role within the bank) impacts both higher management levels and lower ranks. The purge of employees is part of the bank's continued digestion of its former rival, Credit Suisse, which it bought in an emergency rescue in 2023. UBS has previously said there would ultimately be around 3,000 jobs at risk of redundancy in Switzerland. | |
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In Washington, it's long been the practice to do unpopular things on Friday evenings in the hope that no one will notice come Monday. But even amid the daily maelstroms of firings, retribution and consolidation of power that have marked the first week of Donald Trump's second term, the Friday night massacre of people responsible for rooting out mismanagement, abuse of power and corruption in government seems to have legs. The purge—followed today by his termination of federal prosecutors who investigated him over his alleged role in the Jan. 6 insurrection—violates a law requiring Congress be given 30 days' notice and detailed reasons for the dismissals. US Representative Gerald Connolly of Virginia, a Democrat who is the ranking member of the House Committee on Oversight and Government Reform, called Trump's latest order a "coup to overthrow legally protected independent inspectors general," allowing the installation of loyalists who "will harm every American who relies on social security, veterans benefits and a fair hearing at IRS on refunds and audits." | |
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Sales of new US homes ended 2024 on a high note as customers took advantage of incentives from builders, leading to a second straight year of increased purchases. The annual pace of new single-family home sales accelerated 3.6% to 698,000 last month, reflecting a sharp advance in the US West, government figures released Monday show. The median estimate in a Bloomberg survey of economists predicted 675,000 annualized sales. For the full year, customers purchased 683,000 homes, up about 2.5% from 2023's total. | |
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Southern California will clock a few more tense hours as showers continue to soak the burn-scarred landscape around Los Angeles. While the rains are helping fight wildfires that have killed at least 28 and destroyed more than 16,000 structures, they're also raising the risk of deadly landslides and debris flows that can inundate a house with mud in seconds. Skies over Los Angeles were to clear Monday afternoon. Oceanfront homes destroyed by the Palisades fire along the Pacific Coast Highway in Malibu, California, on Jan. 25. Photographer: Myung J. Chun/Los Angeles Times | |
What You'll Need to Know Tomorrow | |
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Trump has often been hostile to the world's largest tech companies and their leaders, calling Facebook (as with the news media) an "enemy of the people" and Jeff Bezos "Jeff Bozo." But after digging into their pockets to pay homage, tech's biggest CEOs lined up in places of honor at Trump's inauguration to personally display a new-found fealty. But in exchange for bending the knee, they want a lot in return. | |
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