pino428 @pino428: "𝘿𝙚𝙖𝙧 𝘾𝙤𝙥𝙞𝙚𝙧 𝙖𝙣𝙙 𝙁𝙤𝙡𝙡𝙤𝙬𝙚𝙧, 𝙒𝙚𝙡𝙘𝙤𝙢𝙚..."

Italy

𝘿𝙚𝙖𝙧 𝘾𝙤𝙥𝙞𝙚𝙧 𝙖𝙣𝙙 𝙁𝙤𝙡𝙡𝙤𝙬𝙚𝙧, 𝙒𝙚𝙡𝙘𝙤𝙢𝙚 𝘽𝙖𝙘𝙠. 2025 has begun with a series of events that have immediately captured global attention: Trump’s inauguration and swearing-in as President, the debut of DeepSeek—the new Chinese artificial intelligence that has reshuffled the deck in the industry—and the decisions of central banks, which are increasingly struggling in the fight against inflation. We expected a year full of surprises and marked by high volatility, and the first signs are evident from the very first month. 𝙏𝙍𝙐𝙈𝙋 Trump's policies remain unpredictable: his daily statements not only fuel market instability but also directly affect crucial issues such as international agreements, fiscal policies, and even monetary policy. As we know, Trump has repeatedly expressed his intention to remove Powell from the presidency of the FED while simultaneously exerting strong pressure for interest rates to be cut more quickly in order to stimulate the economy. However, he does not have the power to fire Powell, nor should he influence monetary policy, given the FED's independence. Yet, his unpredictability could lead him to find a way to achieve his goal, with the risk of triggering significant tensions in the monetary realm. Markets do not react well to uncertainty, and this unpredictability constantly puts them to the test. ________________________________________ 𝘿𝙀𝙀𝙋𝙎𝙀𝙀𝙆 Last week, the markets experienced a sell-off following the news of the Chinese startup DeepSeek, which surprised the world with a cutting-edge artificial intelligence model developed with a budget of only a few million dollars—a stark contrast to the billions invested by American industry giants. This development has raised serious questions among investors, causing companies like Nvidia to lose billions in market capitalization within hours. DeepSeek is redefining the rules of the game, not only in terms of cost and efficiency but also by making its technology open source. The news highlights the potential vulnerability of the artificial intelligence sector and the risk of a speculative bubble, following years of relentless growth by big tech companies, which have led to extremely high valuation multiples. However, we cannot speak of a bubble until it bursts, triggering a sell-off similar to the dot-com bubble of 2000. In the same week that the new DeepSeek model was announced, reports on the earnings of American big tech companies also began to emerge. Investors are becoming increasingly cautious and discerning in evaluating how the massive investments in artificial intelligence will affect corporate profits and what the real returns will be. However, has DeepSeek truly reached the levels of GPT-4 or Google's Gemini? What are the actual costs behind this technology? How will it develop in the coming months, and what impact will it have on companies like Nvidia? Furthermore, how will governments react and what regulations might be introduced? ________________________________________ 𝘾𝙀𝙉𝙏𝙍𝘼𝙇 𝘽𝘼𝙉𝙆𝙎 Last week also marked significant moves by central banks. The ECB cut rates by 25 basis points, in line with market expectations, while the FED chose to keep interest rates unchanged, maintaining them within the target range of 4.25%-4.5%. The FED’s decision was unanimous, and in its latest statement, it removed the indication that inflation had made significant progress toward the 2% target. In fact, inflation is slowing down less than anticipated. Additionally, the labor market remains strong and resilient—a key factor in the behavior of prices and consumer confidence. • Initial Jobless Claims fell to 207,000, the lowest level since October. • Continuing Jobless Claims dropped to 1.858 million, indicating that those who lose their jobs are still finding new employment quickly. On the economic growth front, the US GDP for Q4 2024 recorded a +2.3% quarter-on-quarter (QoQ) increase, slowing down from +2.7% in the previous quarter. The market had initially priced in several rate cuts for 2025, but now the outlook is changing. A potential further cut is expected only in June, and even then, with low probability. Powell has emphasized that the FED will not wait for inflation to fall below 2% before proceeding with further cuts. Thank you for your support! $KLAC (KLA Corporation) $NVDA (NVIDIA Corporation) $AMZN (Amazon.com Inc) $AMAT (Applied Materials Inc)

4 Mentioned

KLAC

KLA Corporation

NVDA

NVIDIA Corporation

AMZN

Amazon.com Inc

AMAT

Applied Materials Inc

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