End of Week Market Briefing
373: Defense/AI Stocks, Q1 Checklist, Global News
Hey guys happy Friday.
Given the massive influx of subscribers over the last few days — wanted to send out a quick note synthesizing key updates and content for the new year. Also have a concise review of stock market news and global updates for you today. There’s one stock I talk about that’s turned out to be an absolute runner after our GOATED PLTR 0.00%↑ call.
29,000 of you subscribe to either the free version or paid premium version of Arb Letter as of now. For newcomers — I generally send out 1 note a week to all free subs that’s more high level with the occasional longer form post like yesterday’s that generated quite a bit of uproar from a handful of loons (linked below).
Government Corruption on Another Level
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Again, if you want the simple posts roughly once per week that could be a good option, but I’ve worked to keep even the paid version close to the lower limit of what Substack allows us to charge to help everyone have a chance at access.
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Again — the goal of this publication has always been to provide a differentiated and straightforward take on the world, something that is increasingly rare these days. New episode of Risk On next week.
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Financial Markets & Crypto
This week, the U.S. labor market exhibited signs of deceleration, with employers adding 143,000 jobs in January, falling short of the anticipated 170,000. Despite this slowdown, the unemployment rate edged down to 4%, marking its lowest point since May. Average hourly earnings saw a notable increase of 0.5%, contributing to a 4.1% rise over the past year.
Concurrently, the stock market experienced volatility, influenced by concerns over new tariffs and inflation. The Nasdaq dipped below its 50-day moving average, while the Dow Jones Industrial Average and the S&P 500 remained relatively stable.
Notable corporate earnings reports further swayed market sentiment, with companies like Palantir and Spotify reporting strong performances, whereas Alphabet and Amazon faced challenges despite significant capital expenditures aimed at advancing AI technologies. Overall, the interplay between a cooling labor market and mixed corporate earnings contributed to a week of cautious market movements.
One name that I got into earlier this week after someone DMd me about it was BigBear AI BBAI 0.00%↑
Shit went on an absolute tear. Am I weary of the frothy tech/AI narrative right now? Absolutely. Do I think PLTR 0.00%↑ BBAI 0.00%↑ and similar AI/defense names might keep running in this presidency — absolutely. It’s a balancing act but I don’t think it can hurt to keep exposure in these names in the coming months, particularly while we wait for crypto gain attention again.
Earnings Highlights:
Eli Lilly (LLY) posted Q4 earnings per share of $5.32, more than doubling from the previous year, with revenue soaring 45% to over $13.5 billion.
Philip Morris (PM) reported earnings per share of $1.55, up 14%, with revenue climbing 7.3% to nearly $9.7 billion. Knew I should’ve added this ahead of time.
Layoff Announcements:
Salesforce cut over 1,000 jobs, even as it continues hiring for AI-related roles.
Estée Lauder announced plans to reduce its workforce by 5,800 to 7,000 employees by 2026.
Meta is reportedly planning to layoff over 3,600 employees from its global workforce starting from Feb. 10, 2025 (MacroEdge)
I will nibble on AMZN 0.00%↑ soon as well. In 2025 I am going to focus on DCaing stocks outside retirement accounts more regularly as I am happy with my crypto allocation for the time being. Yes I still hold $ZYN.
Nothing has changed in my crypto portfolio given recent slow down. In short — I expect bullish momentum to return in March or April. As I said in our paid post earlier this week, the nature of these cycles is changing. My long term thesis is not. This means that “alt season” or other terms people like to throw around might not appear or develop in the same way they have historically. Remember nobody truly knows what is going to happen. Long term if you flock to quality you will come out on top.
The biggest catalysts for the return of up only mode would be rate cuts or QE sentiment from the Fed. Also good to keep an eye on DXY and Gold Prices in the short to medium term. Right now with the tariff talk, Trump government moves, and macro things are going to continue to be volatile.
Keep an eye on crypto this weekend — if alts have another violent I dip — I will be a buyer of LINK, AVAX, and SOL.
If Bitcoin falls below $90,000 I may just back up the truck.
Martin Shkreli shared the following screenshot on X showing some heavy duty shorts on various meme coins with his only long on Bitcoin. Dave Portnoy of Barstool is also under fire for trading meme coins and dumping them Friday afternoon.
Weekend price action should be interesting to follow.
Global News & Geopolitics
This week has witnessed a series of significant geopolitical events shaping international relations and economic landscapes. The United States has taken assertive trade measures, imposing a 10% tariff on Chinese imports, which led to immediate retaliatory tariffs from China on U.S. energy products and the implementation of export controls on critical minerals.
In a parallel move, the U.S. announced a 25% tariff on goods from Canada and Mexico; however, these tariffs have been temporarily delayed for one month following agreements from both neighboring countries to enhance border security measures. In the Middle East, President Trump, alongside Israeli Prime Minister Netanyahu, unveiled a controversial proposal for the Gaza Strip, suggesting U.S. control and reconstruction efforts aimed at transforming the area into a prosperous region, a plan that has elicited mixed reactions globally.
On February 4, a mass shooting took place at an adult education center in Örebro, Sweden, leaving ten people dead, including the perpetrator, and injuring several others. The attacker, a 35-year-old licensed firearm owner, had no known ideological motives. In response to the tragedy, the Swedish government announced plans to tighten gun laws, proposing stricter vetting processes for firearm licenses and new restrictions on semi-automatic weapons.
Additionally, the U.S. administration has initiated the shutdown of the United States Agency for International Development (USAID) which we covered in our post from Thursday, recalling staff and planning to merge its functions into the State Department, signaling a significant shift in U.S. foreign aid strategy.
The United States imposed a 10% tariff on Chinese imports this week, prompting China to retaliate with tariffs on U.S. energy products and new export controls on critical minerals.
The U.S. agreed to delay planned tariffs on Mexico and Canada for one month after both nations committed to enhancing border security measures.
Discussions on Gaza’s redevelopment took center stage as the U.S. and Israel proposed plans for reconstruction and potential long-term governance of the region.
European leaders are preparing to respond to possible new U.S. tariffs on European goods, emphasizing the need for a coordinated reaction to safeguard trade interests.
Ukraine launched an offensive into Russia’s Kursk Oblast, gaining ground in several areas, while Russia claimed to have repelled attacks in other regions.
The International Criminal Court condemned U.S. sanctions imposed on its officials, calling for global support to uphold its independence.
Bangladesh’s interim government, led by a new administration, pledged to address growing unrest following the ousting of its former prime minister.
Geopolitical tensions, particularly trade disputes initiated by the U.S., contributed to volatility in global oil prices this week.
US announced approval of $6.75 billion sale of bombs to Israel Friday
Trump suggested on Friday afternoon that Elon Musk and DOGE will move past just USAID in their audit efforts. Reports indicate this could be the Pentagon and other federal agencies as well.
Quick note today — enjoy the weekend guys and we will be back with a new guide for paid subs Tuesday (focusing on stock picks for Q1) as well as a new episode of Risk On on Spotify.
If you want to see one of the wildest clips on television check out this video from a reality TV show where a guy sees his girlfriend cheating — I am told the guys name is Montoya lmao, shit is hilarious. I will share it as a small treat.
Enjoy your Friday evening and weekend — talk soon.
Andy
BullX Crypto Trading Software
Gemini Crypto - Get Free Bitcoin
Disclaimer - I am a former trader, enterprise sales rep, and current entrepreneur with a monkey brain. Nothing I say should be considered formal financial advice or life advice, these are my opinions - always do your own research and diligence before investing and ensure you have a good understanding of your personal risk tolerance.
Still holding PEPE? I hope Shkreli is wrong w that prediction