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Hey everybody, welcome back to the channel. We are back on another episode of the daily recap. This is the last recap for the week as we are ending out the third trading week of January. January has had so many things happen. I can't even say that this week has gone by or this month has gone by pretty fast.
Uh because it feels like it's been compounding with different events that have happened over the past couple of weeks. So we are going to talk about the headlines for today. Uh tomorrow's Friday. We officially close out the week and then we've got one week left of January before we enter February. And in the last week of January, which is next week, we have some real big tech earnings.
On Wednesday alone, we have the FOMC. I'll be live for that with JPO, it will be uh one of his last four FOMC meetings before there's a new Fed chair. Uh and that day, we have Microsoft, Tesla, and Meta. So, next week is going to be wild as we officially get into Q4 big tech earnings. Got a lot to talk about today.
Let's get into it. All right. So let's start off with the most important news of the day which was the macro data that we got. I thought this data was actually very important and um there were two levels to this data that I think can't really be ignored when we take a look at what's happening in the economy.
So let's go right here. GDP and jobs data we got today. GDP for Q3 came in at 4.4% which was above expectations of 4.3%. The economy once again is growing at a at a pretty healthy rate. Jobless claims came in at 210 uh,000 below expectations of or 200,000 below expectations of 210,000. This is, I believe, the eighth week in a row where jobless claims, which are essentially just a gauge of how many people are filing for unemployment in the United States, have come in lower than expectations.
So, what does this mean for investors and why was the stock market up today? Stock market relatively green. S&P 500, uh, we got to what, 690 on the day, 689. So just under 690. We were at 676 a couple days ago. So I mean Meta was 600 a couple days ago. Today Meta is at 650 or 645. So like we've really seen a nice little jump here.
And I think it's because of the following reason. We are likely not getting a rate cut on January 28th, which is the next FOMC meeting. But that's not the end of the world. Now it would have been the end of the world if we didn't get a rate cut in December because some of the data that we were looking at was not really the best and we kind of likely needed that rate cut.
CPI is slowing down 2.7%. still above the Fed's expectation, but it is still slowing down. Labor market's relatively stable. Again, based on what we're looking at with um the the the job claims. Now, the labor market is a lot more anecdotal, and I'm sure there's a lot more nuances to what's happening in the labor market, but based on the data we're seeing, it's not at recessionary levels and then GDP is coming in hotter than expected.
So, if we have an economy that's growing with GDP and we have a labor market that's stabilizing and there's less people filing for unemployment, there might not be a reason for a rate cut, which is why the CME Fed probabilities now for a January rate cut are only at 5%. I think it's okay if we don't get a rate cut.
I don't think we can survive without at least one or two rate cuts this year, especially because we have to get these 10-year yields to come down, which would open up the housing market. That would get mortgage rates to come down. By the way, let me know if anyone's bought a house recently or thinking of buying a house and if you're just willing to pay the 6% mortgage, because I mean, I think some people are just saying, "Screw it.
I don't care." But if that thing could get down to like 5.5 by the end of the year, that could make a substantial difference. So the reason stocks are up and the reason I think stocks can continue to go up outside of the Greenland stuff that happened yesterday, the Greenland taco stuff, we'll talk about that, is that the labor market is not horrible.
GDP is strong and that's relatively bullish for stocks. All right, Greenland, let's talk about it. So um yesterday was the Trump pivot. That's what kind of sent the market up um higher than what it was over the past couple days. Obviously, we had that 2% decline on uh Tuesday, which was the worst day for the S&P since October 10th.
Uh Trump pivoted, not doing the tariffs anymore. We're still very confused what exactly the deal is or what it's going to look like. I I said this yesterday and I'll say it again. I mean, I I I kind of don't think it matters that much at the end of the day. If the tariffs aren't happening, that's it.
That's all we need to know. If the tariffs are not happening and there's not this Liberation Day 2.0, then it shouldn't be that big of a deal. even if there is a compromise of a deal or a framework of a deal or a compromise for a framework for a deal. You had a lot of different people from the European Parliament, NATO, Denmark, Greenland come out today saying yes, there is a deal, but there's a lot to be worked on.
So, they didn't shut down the idea that there wasn't any deal, which in this case would include certain parts of land that the United States would have access to. Um, but there's no details on exactly what that entails. Here's what Trump had to say about it today. Well, I'm not going to have to pay anything.
We're going to have total access to Greenland. We're going to have all military access that we want. We're going to be able to put what we need on Greenland because we want it. We're talking about national security and international security. So, we're going to not have to pay anything other than the fact that we are building the the Golden Dome.
And the Golden Dome is going to be something that's going to be very amazing. It'll be uh Israel times probably 100. And we need it. I think we need it. And it's all going to be made in the United States. We have the best weapons in the world. We have the best companies in the world. We want them to produce faster and, you know, we've put a mandate out.
You're going to have to produce faster whether it's the Patriots or the Tomahawks or the F-35s or anything else. We make the best equipment, but they have to make it a lot faster. So, what are we talking about? An acquisition of Greenland? Are you going to pay for it? I mean, we're talking about it's really being negotiated now, the details of it, but essentially it's total access.
It's uh uh there's no end. There's no time limit. We're not doing a 99 or 10 year or anything else. You know, the famous 99-year deals that you hear about because countries can't do it for that. Countries go on longer. And so, I think it's going to be something that's uh very well already it's being reviewed very well.
Well, I noticed the stock market went up very substantially after we announced it, but the details are being negotiated now. It'll be very good. So, because the GDP of Greenland is like $3.3 billion, but people are valuing Greenland at between 50 billion and almost a trillion. So, what are you willing to pay for Greenland?
Well, I'm not going to have to pay anything. We're going to have total access to Greenland. We're going to have all military access that we want. We're going to be able to put what we need on Greenland because we want it. We're talking about national security and international security. So, we're going to not have to pay anything other than the fact that we are building the the Golden Dome.
And the Golden Dome is going to be something that's going to be very amazing. It'll be uh Israel times probably 100 and we need it. I think we need it and it's all going to be made in the United States. So ultimately that is what Trump said. There's a role with the Golden Dome that's going to be happening in Greenland.
What does it mean for investors? I think it means sit back and see if there's a deal that happens. But at the end of the day, if there's no tariffs, that's probably a decent thing for the markets. Okay, let's talk big tech because we had some big tech names get some momentum today. Meta, if anyone bought the dip on that, $645 right now, up 5.4% on the day.
Hit $600 over the past couple days. What's going on with Zucks? Well, there's a couple things. They got a price target upgrade to $900. A couple thousand price upgrades they got over the past couple days. So, like the upgrades are good. That's important. Um, a piece of news came out this morning around Threads monetization.
Apparently, apparently Zux has 400 million multi-active users on threads and I think it's like 270 million DAUs, which is more than the 250 million DAUs um that X has. So, I don't use threads. Let me know in the chat if anyone uses Threads or in the comments. I I I don't really find the platform that appealing, but it's integrated into Instagram and Facebook, and there's billions of people on those platforms, so it's easy to get them onto threads.
And then from a monetization perspective, yeah, why shouldn't they be able to make this a $510 billion business? They already have the data. It's textual content, which means the advertising is so um synergistic because like if you say, "Hey, I like Dunkin Donuts." Like you can get an ad for Dunkin Donuts.
And the AI stuff should only make the advertising targeting even better. So, you've got the new compute business that we talked about a couple weeks ago where Zux is trying to get hundreds of gigawatts of compute, maybe license it to other people. Uh layoffs and reality labs, that was news that came out last week.
Threads monetization announced today. And then multiple analyst upgrades based on depressed multiples that it's trading at. Uh 18 times forward. and WhatsApp was a big deal from some of the analysts today saying that we think this could be a $35 billion annual run rate business by 2029. Right now it's about 9 billion.
I mean you put all that together we already know that is undervalued. Question is does the narrative around their uh inability to effectively explain how they're monetizing the capex spend on AI which I still think is an issue going into earnings even though it shouldn't be an issue because the business itself is fundamentally undervalued.
if it were to be an issue as an overhang, then yeah, that's an issue that can keep the stock lower than where it needs to be. What's going to happen on earnings? We're going to find out next Wednesday. But overall, I mean, Meta continues to show that they're not slowing down and they're not trying to slow down when it comes to the momentum that they're putting up.
This is the thread right here around uh daily active users. As you can see right there, threads is starting to be bigger than X. And that means it should be monetized. and if they have enough data via the advertising and that shouldn't be something that is that crazy to see. Now speaking of AI, you did have this headline as well that I thought was really important by Mr.
Sam Ultman. We have added more than a billion dollars of AR in the last month just from our API business. People think of us mostly as Shad, but the API team is doing amazing work. Basically, Sam Alman is trying to counteract some of the claims that Dario was saying yesterday. We talked about that on yesterday's daily recap, which is that anthropic it has a thriving enterprise business.
And Daria was just like, "We don't really care about the consumer. We don't care about monetizing engagement. We don't need to care about monetizing engagement. All we care about is building a better model. And our moat is enterprise lock in. Sam Alman saying, well, we're doing a billion dollars of ARR, you know, potentially getting a valuation of $830 billion as they're raising money for the Middle East.
They're going to have to do a lot more than that to really make sense of that valuation. So once again, you see big tech thriving but not getting the multiple uh premium or like respect in the broader market. But then you have these private companies that are getting a lot of respect, increased valuations, and they're not doing nearly as much revenue or profits as a company like Meta.
It's ultimately how the market chooses to see the future of how these companies will play out. And obviously that trajectory is incredibly important. Now, this chart I also thought was really important. Take a look at Gemini's traffic. We looked at Metas yesterday. Google continues to take share similar web as Gemini at 22% today, up from 19.5% a month ago.
Not too bad month overmonth growth and 13% three months ago. So Gemini used to be not a thing when it came to generative AI traffic share. It's becoming a very big thing. Obviously you can see OpenAI right there is in the blue. They still have the majority of traffic share but that's declining. Gemini is increasing.
And if that can continue to happen, OpenAI is now introducing advertising. How are consumers going to really adapt to the ads? Gemini said we don't need any ads. They can subsidize it subsidize it with the search business. I mean, maybe that creates a really strong uh source of momentum for Google to just keep growing.
And as a result, Google stock, although it's one of the more expensive Mac 7s, maybe it continues to go higher. Now, having said that, Kathy is not a fan of what she calls the Mac 6. I guess she takes Tesla out of the Mac 7. Here's what she had to say about why Arc isn't overweight on the hyperscalers.
If AI is such a big theme of yours, why don't you have bigger stakes in any of the so-called hyperscalers, right? Uh so one of the reasons is we think the shareholder base of those companies is changing and will and will continue to change. uh because shareholders uh in the last cycle who got used to huge cash flow uh and cash positions building uh very little M&A because the I mean FTC had shut down M&A.
All of that is changing with AI now and with a new FTC. So, we're seeing huge capital spending uh and returns on invested capital probably coming down for a while. Uh and the shareholder base in those companies uh has really uh has really stayed with them because returns on invested capital had been moving up.
I think this is a bit of a shock to their system. Uh and as you know we are very focused on you know more pure play uh future winners. I'm not saying the mag six won't win. uh in many ways they will uh but they certainly any company that is in the broad-based benchmarks and has risen to the top has has gotten there because of past performance and a certain DNA that worked uh during the last 20 years or so.
We think there's so much disruption happening now technologically enabled disruption uh some that will benefit some that will not benefit uh the mag six. So um we are much more focused on you know the the companies that are not as well known but are going to benefit enormously from uh from the year ahead and uh the years ahead and and I will say last year the market starting to broaden out away from the mag six uh we outperformed we're in the top 5% I think four of our uh five uh four of the top five ETFs by Morning Star And even for the last three years, we're in the top 5%.
So I think the market is beginning to understand what we've been trying to say for for for a long time. Now look, do I agree with Kathy? Not really. The the thing I agree with her is that which she didn't really make this argument, but is that the max 7 market caps are really large, right? So to move Amazon from 2.3 to 4.3 trillion, it's hard.
to move an AMCOR from 13 billion to 26 billion is not that hard especially because the multiple on its sales is already relatively cheap. So the question then becomes you know where do you allocate capital and as a capital allocator obviously uh something going from 13 to 26 is easier than 2.3 to 4.3 but that 13 to 26 is not as guaranteed as the $2.3 trillion company continuing to execute and maybe get to 2.7 trillion which is still a pretty good return especially if you're managing a large amount of money.
So, I agree that the large caps are hard to find alpha in, but her argument is the large caps aren't engaging in disruptive innovation. That part I disagree with. Tesla, FSD robotics, pretty disruptive innovation. Uh, Google, Whimo, Electronic, pretty disruptive innovation. Meta with advertising, although it might not seem like it's disruptive, they are managing 4 billion people's data on the planet and trying to build products and services on that.
That's pretty important to me. Apple with the new Siri partnership in Google and obviously Apple with the vision pro some of that stuff doesn't always work out but they are trying different things in the marketplace Amazon with robotics AWS cloud computing like I mean if you're talking about a moonshot disruptive innovative technologies the companies that have the biggest balance sheets in the world that are able to lose money on a lot of those moonshots are the Mac 7 they are the ones that I mean Nvidia obviously with GPUs I mean I just went to the Nvidia event to see yes Vera Rubin uh which if you guys saw the interviews I did I posted last week just those executives explaining think how sophisticated the technology is is pretty disruptive to me.
So the idea, you know, Microsoft with everything they're doing, the the idea that this stuff is not disruptive, I think is false. In fact, all these companies are spending the most amount of money on disruptive innovation, but they're not being rewarded by the market right now simply because a I think there's being a rotation out of large caps.
Small caps have won decisive this year versus the S&P 500, and also people are looking for alpha and other layers, which is okay. But I disagree with the broader premise that these companies are not disruptive. I also disagree with Tom Lee's argument which is that we're going to get a 20% draw down.
So you have two big figures in financial media. You have Kathy Wood saying Max 6 aren't embodying disruptive innovation. Disagree with that. Then you have Tom Lee saying we are going to have a 20% draw. Not saying a 20% draw down can happen. It's just why right like I and put in the comments why would you can say valuation sure I think that gets us 10% and then people come in to buy the dip.
I don't think that gets us 20%. 20% to me is like 2022 we're raising rates like crazy. 2020 we have a global pandemic, right? like we have a recession or something which again we're looking at the data every day that doesn't seem as likely. So I want to know why we get that type of a draw down. Not saying it can't happen and I also want to know why the Max 7 aren't disruptive innovative companies because from my perspective it seems like they are which means investing in them and sleeping well at night is easier to do than finding the next thing that can double although it's not as easy for a company like Amazon to double.
So I mean I understand Cathy's perspective but those are my thoughts on Mac 7 and how they are disruptive. All right, last stat I want to show everybody and uh this is a pretty incredible stat that once again sums up this generation of how retail investors think about the markets. I think the collective pronouns of retail investors are buy the dip.
Individual investors net bought $1.8 billion of the S&P 500 yesterday, the largest daily purchase since October. This was the third largest inflow since the April 2025 market recovery. Year to date, retail purchases have exceeded a billion dollars every single day. For the week ending January 14th, individual investors purchased 12 billion worth of equities, the largest weekly inflow in at least three months.
This includes 4.9 billion in single stocks, the highest in 9 months. You know, maybe this is all being done on margin. Maybe this is all being fueled by call options. Maybe this is all being done recklessly. But the stats are the stats. retail continues to buy the dip if there is an opportunity. That's why I'm saying if we have a 20% draw down before we have the 20% draw down, a lot of people are going to come in thinking that it's not going to be 20% and they've been rewarded for it.
I've been rewarded for it over the past couple years of just buying the dip. I mean, at the end of the day, what else can you do, right? If you are if you work a job and you have a 401k, you are a forced buyer of stocks every two weeks. Where do you put your capital? It could be gold, silver, crypto, real estate.
But at the end of the day, the most thriving stock market in the world that is putting up the earnings growth to justify the continued multiple expansion is the US stock market. And that's why I think retail continues to buy the dip. Let me know in the chat in the comments if you've bought the dip over the past couple days.
But in the worst day we've had since October, retail stepped in and bought the dip. All right, that's it for me. Thank you everybody for listening and watching. We are one week away from the New York meetup. Link is in the description. You can sign up for that. We have about 25 spots left. So if you'd like to show up, please make sure to get your ticket and show up.
Very excited to see everybody in New York in a week, February 1st. And uh after that, we're doing LA. LA details are coming very soon. End of March. Keep an eye on it. And we'll be very excited to see people in Los Angeles. Thank you everybody. I'll see you guys next week for the daily recap.
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