*Performance since 7/1/2022. For more details on the performance calculation and methodology of Alpha Picks, click here. |
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► It was a volatile week as Wall Street's 'fear gauge' soared with China's DeepSeek AI threatening existing Western AI models.
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► Despite volatility early in the week, indices rebounded, with the Nasdaq up 2.66%, the S&P 500 up 1.62%, and the Dow up 1.34% by mid-day trading Friday.
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► U.S. Treasury yields remained relatively stable, with the 10-year yield close to 4.55%, while the dollar showed mixed performance against major currencies amid ongoing trade and policy developments.
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► The cryptocurrency market saw gains beyond Bitcoin after Fed Chair Powell announced that banks can service cryptocurrency, prompting the CME Group and Grayscale to announce the launch of crypto products.
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► As anticipated, the Fed kept rates on hold while U.S. GDP grew slower than expected in Q4. PCE rose 2.3% Q/Q, but moderated for the full year.
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Alpha Picks is a rigorous, data-driven model that offers Strong Buy-rated stocks believed to have the highest probability of capital appreciation based on a proprietary quantitative model. Two Strong Buy-rated stocks are selected monthly on the first trading day of the month and the 15th or the closest trading day thereafter. |
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Global Market Movements and Sector Performance |
Monday kicked off a volatile week for major equities, with the release of DeepSeek's AI model rattling the tech and global markets. The model, developed by a Chinese startup, presents a low-cost alternative that rivals existing Western AI models like ChatGPT, raising concerns over potential competitive pressures. Read More. |
Tariffs and trade tensions remain a focal point for companies concerned that supply chain disruptions and increased costs could hinder innovation, growth, and tech advancements. Read More. |
The Information Technology sector (XLK) faced downward pressure this week due to concerns over the emergence of China's DeepSeek, leading to significant declines in key tech stocks like Nvidia and Microsoft. Read More. |
Value Stocks vs. Growth Stocks
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Fear moved the markets this week, as the DeepSeek AI scare prompted investors to seek value rather than growth stocks. Uncertainty surrounding tech created a less-than-favorable outlook despite the push for innovation and tech trends that continue to capture investor interest and market share. Read More. |
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Regulatory Tailwinds for Crypto
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Wall Street and the cryptocurrency markets continue to respond positively to Fed Chair Jerome Powell's confirmation that U.S. banks can serve crypto clients. Read More. |
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The U.S. dollar plummeted Monday amid market volatility and investors evaluating the future of AI tech versus Chinese competition, but the greenback rose Tuesday on renewed tariff rhetoric. Read More. |
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What could the rest of 2025 look like if the S&P 500 rises in January? History suggests that if the stock market manages to end the first month higher, this could bode well for the rest of the year. |
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► FOMC: The Federal Reserve maintained the federal funds rate at 4.25%-4.50% during the latest meeting, with Powell indicating no immediate plans for rate cuts despite acknowledging that inflation remains somewhat elevated.
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► Inflation: Q4 2024 saw inflation rise (PCE 2.3%, Core PCE 2.5%), but full-year inflation declined significantly from 2023 levels, down 1.3%.
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► Labor Market: Weekly unemployment claims unexpectedly fell to 207,000, down 16,000 from consensus estimates, indicating lower layoffs even as job opportunities become scarcer for those looking for work.
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| McDonald's Corporation (MCD) Palantir Technologies Inc. (PLTR) |
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| JOLTS Job Opening Alphabet Inc. (GOOGL) (GOOG) |
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| Novo Nordisk A/S (NVO) Toyota Motor Corporation (TM) |
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| Eli Lilly and Company (LLY) AstraZeneca PLC (AZN) |
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| Chevron Corporation (CVX) |
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*Performance is as of January 31, 2025. Alpha Picks adds two stocks per month—on the closest business day to the 1st & 15th. Alpha Picks removes stocks based on rating thresholds (i.e., when a rating changes to a sell). Performance is calculated and reported daily using time-weighted returns. For more details on the performance calculation and methodology of Alpha Picks, click here.
Past performance is no guarantee of future results. Alpha Picks does not take account of your objectives or your financial situation and does not offer any personalized investment advice. Any content and tools on the platform are offered for information purposes only. Any views or opinions expressed may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker, U.S. investment adviser, or investment bank. |
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