The Rapid Recovery!

January 28, 2025

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“The stock market is a device for transferring money from the impatient to the patient.”

— Warren Buffett

Hello, my friends!

What a start to the week!

After the weekend’s AI-driven liquidity shakeout, markets have staged an impressive comeback.🚀

I’ve seen these snap-back rallies way too many times!

That’s why I never use leverage when I’m holding positions longer than 24 hours - those rapid price swings can strike at any time, and they don’t always wait for New York hours.🗽

Nasdaq Recovery

It’s incredible how quickly fear dominated trader sentiment, only for prices to snap back above the 50% retracement level in under 48 hours.

The AI Race: U.S. vs. China

While the markets were busy bouncing back, some fascinating stats caught my eye on the AI front 🤖:

  • Private AI Investment (2022):

    • The United States attracted roughly 50% of global private investment in AI (about $26.5 billion) last year, according to Stanford’s 2023 AI Index.

    • China took the second spot with around 20% of global private AI investment.

  • Government Funding Goals:

    • China’s State Council aims to become the world leader in AI by 2030, backing a domestic AI industry projected to reach $150 billion.

    • The U.S. government isn’t sitting idle, proposing $2+ billion in federal AI R&D funding annually, spread across agencies like the NSF and DARPA.

These numbers show just how fiercely both nations are competing in the AI arena, fueling innovation and shaking up tech and investment landscapes worldwide.

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Market Rundown

  • Nvidia Fuels AI Recovery Sharp losses reverse course as Nvidia rebounds, pushing the Nasdaq into the lead after Monday’s rout.

  • Tech Sector Steals the Show S&P 500 technology stocks jump, with semiconductor shares also bouncing back from steep declines.

  • DeepSeek’s Big Splash Chinese startup’s AI models spark a brief sell-off in U.S. tech before bargain hunters swoop in.

  • Earnings on the Radar Investors look ahead to Apple, Microsoft, and other major tech results due this week.

  • GM Faces Tariff Headwinds Automaker’s stock under pressure as new tariffs loom, stoking concerns about future business impacts.

  • Trump’s Tariff Talk President signals potential levies on imported computer chips, pharmaceuticals, and steel.

  • Fed Decision Coming Up Central bank widely expected to keep interest rates unchanged in its first rate decision of the year.

Until next time,
Steve B
Founder, The Daily Impulse

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