Stocks don’t like the look of this strong economy

It’s the worst session of the year for stocks in the early going, as investors look askance at the ongoing strength in the US economy. Robust jobs growth lowers the odds that the Federal Reserve, which lowered its policy rate by 100 basis points in the back half of 2024, will keep delivering additional rate cuts any time soon.

The economy generated a stronger-than-expected 256,000 jobs in December, with the jobless rate declining to 4.1%.

Stock futures and individual shareholder favorites like Tesla, Nvidia, Apple, and Palantir, among others, took it on the chin when the numbers hit, with interest rates rising.

If you’re interested in more markets blasphemy about the relationship between stocks and the real economy, check out this Sherwood deep cut.

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Luke Kawa45m

OpenAI reportedly seeking alternatives to Nvidia chips, unhappy with inference performance

Reuters reports that OpenAI is “unsatisfied” with Nvidia’s latest AI chips and has been seeking alternatives since last year, citing a whopping eight sources familiar with the matter.

This news comes on the heels of a recent report from The Wall Street Journal that Nvidia’s plan to invest $100 billion in OpenAI had stalled.

Nvidia CEO Jensen Huang seemingly confirmed the WSJ reporting in comments to the press over the weekend, but still struck a positive public tone on OpenAI, indicating that the chip designer would be participating in its upcoming funding round.

Sources inside OpenAI appear to be choosing a more combative response.

Per Reuters, the specific shortcoming OpenAI sees in Nvidia’s offering involves inference, or the “thinking” being done by AI models.

Now, the idea that OpenAI is seeking alternatives to Nvidia, or at least additional sources, is well known: the ChatGPT maker struck highly publicized deals in October with Advanced Micro Devices that the chip designer said would “deliver tens of billions of dollars in revenue” as well as custom chip specialist Broadcom to develop and deploy 10 gigawatts of custom AI accelerators.

So this really has the feel of, “I dumped her, she didn’t dump me!”

Palantir beats Q4 earnings and sales expectations, stock surges

The numbers are in.

Matt Phillips1h

Tasha Matsumoto

Stocks close near record highs as strong manufacturing data boosts economic outlook

Due to the partial government shutdown, this week’s expected jobs data will be delayed.

Michael Jordan #23 dribbles towards the net circa the 1990's during a game.

Luke Kawa1h

Microsoft is the biggest drag on the US stock market since Gemini 3’s launch

Microsoft is the publicly traded company that, due to its partnership with OpenAI, had a place of pride at the epicenter of the AI boom.

It doesn’t have that much to show for it.

Thanks to last week’s plunge following the release of its earnings, the tech behemoth is now trailing the SPDR S&P 500 ETF for the first time since November 30, 2022 — the day ChatGPT was released. It’s the only member of the so-called Magnificent 7 to trail the fund that tracks the benchmark US stock index over this stretch.

The OpenAI relationship has been more of a burden than a boon for the company as of late, as the ChatGPT maker’s cash burn and competitive pressures have cast a pall over its partners.

Per data from Bloomberg, Microsoft has been the biggest drag on SPY since the release of Gemini 3, shaving off 80 basis points. Alphabet, on the other hand, has been the largest driver of the ETF’s advance over this period.

Max Knoblauch5h

Airline stocks climb as oil prices retreat on easing US-Iran tensions

West Texas Intermediate crude futures fell more than 5% on Monday, following President Trump’s comments over the weekend that Iran was “seriously talking” with the US — a sign that tensions between the countries could be easing.

That drop-off boosted major US airlines, which stand to benefit from lower fuel costs. Shares of carriers including Frontier, United Airlines, JetBlue, and Delta Air Lines were all up in the mid- to high single digits.

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