MARKET WRAP

The market bounced back from yesterday’s sell-off, with the SPX up nearly 1%, and the QQQs gaining back about half of yesterday’s selloff. IWM was up about a half percent.Today’s move was relatively broad-based but showed differences between pockets of strength versus some relief rallies. While some stocks like NVDA clawed back some of yesterday’s losses (up 9%), other names that may actually benefit from the DeepSeek news extended gains that began yesterday. Treasury yields ticked up only very slightly following yesterday’s move lower, and the VIX has dipped back below 17. SBUX reported after hours and is up 4.5% on the news. This early-week volatility sets the stage for a critical few days ahead. Tomorrow brings the FOMC decision, with Powell’s press conference at 2:30 PM ET. Earnings from major players like Tesla, Microsoft, Meta, Apple, and others will follow, and then the volatile week culminates with Friday morning’s PCE report. More details on the upcoming catalysts are at the bottom of this email. Today’s MRKT Call finds Guy and Dan in Florida and Gene Munster joins Okay Computer to deep dive DeepSeek. Enjoy!

MRKT MATRIX: January 28, 2025

Today’s Top Stories:

• U.S. stocks rebound one day after Nvidia-led AI rout (CNBC)

• Tom Lee says market sell-off sparked by DeepSeek was an overreaction, as Nvidia suffers its worst day since 2020 (CNBC)

• Black Swan’s Taleb Says Nvidia Rout Is Hint of What’s Coming (Bloomberg)

• DeepSeek Challenges Everyone’s Assumptions About AI Costs (Bloomberg)

• DeepSeek sets stage for frenetic tech earnings season (CNBC)

• Trump Renews Universal Tariff Threat to ‘Protect Our Country’ (Bloomberg)

• Trump Says Microsoft Eyeing TikTok Bid to Keep App in US (Bloomberg)

• Investors Who Shunned the U.S. Office Market Are Coming Back (WSJ)

Today’s MRKT Call is Presented by CME Group

Stocks Try To Recover From The DeepSeek Sink

Dan and Guy dive back into the DeepSeek news and discuss how the market is re-evaluating some of the key assumptions that have fueled the AI rally over the past two years. They analyze the S&P e-mini chart, outlining potential entry levels and stop zones for near-term shorts. Next, they break down NVDA’s chart and the Call of the Day, which focuses on SOXX, as Morgan Stanley reiterates its stance on chipmakers. They also tackle your questions, covering AAPL’s big move over the past two days, Spotify, Reddit, and more. Finally, they look ahead to tomorrow’s FOMC meeting, wrapping up with a check-in on Treasuries and what to watch for


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Today’s Okay, Computer. is Presented by RBC and Current

DeepSeek Leak with Gene Munster

Dan Nathan and Gene Munster discuss the recent market turbulence caused by the emergence of DeepSeek, a Chinese AI company claiming to outperform OpenAI's models. They explore the implications for established tech giants like Nvidia, Meta, and Apple, and consider the broader consequences for the AI industry. Munster highlights the potential for a shift in market dynamics and investor sentiment, emphasizing the geopolitical and technological significance of DeepSeek's advancements. The episode closes with a look at upcoming earnings from Apple and Meta.

What’s Next?

Today’s market rally aligned closely with the potential new paradigm we highlighted yesterday. Software and services stocks extended their gains, while AI infrastructure stocks managed only modest recoveries following steep losses yesterday. For instance, although both Apple and Nvidia ended higher today, AAPL is up 7% this week, whereas NVDA remains down -12%. Keep an eye on this developing pairs trade—it’s unclear whether this is just short-term risk rebalancing or the beginning of a broader trend for tech stocks heading into 2025.

Tomorrow brings the FOMC meeting, and with it, the potential for increased volatility. While there may be an initial reaction immediately following the rate decision statement, the real action is more likely to occur during Fed Chair Powell’s press conference—or shortly after it concludes.

• Tomorrow:

  • 2pm Fed Statement

  • 2:30pm Powell Presser begins

• Expected moves into tomorrow’s close:

  • SPX/SPY 0.7%

  • QQQ 1.1%

Some big earnings reports over the next two days. Here are some times to note (and expected moves):

• Wednesday 

  • Pre-Market ASML 6.6%

  • 4:05pm TSLA 8.5%

  • 4:05pm META 6.5%

  • 4:05pm MSFT 3.9%

• Thursday

  • 6am UPS 5.5%

  • 4pm INTC 9%

  • 4:30pm AAPL 4.2%
    

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