What we’re reading (2/9)
“Software Stocks Jump As Wall Street Pushes Back On ‘Doomsday Scenario’ For Industry” (Yahoo! Finance). “Software stocks mostly rebounded on Monday as Wall Street analysts pushed back against growing investor fears that artificial intelligence could disrupt the sector’s business models.”
“Wall Street’s Hunt For Cheaper Stocks Goes Global” (Wall Street Journal). “Last spring, it was ‘Sell America.’ Now Wall Street’s hot trade is buy everywhere else. After years making outsize bets on the largest U.S. companies, investors are moving more money into international markets, wagering that America’s wide lead on the rest of the world will shrink. For years, money managers say, the U.S. stock market was viewed as the only game in town. Now that perception is starting to shift.”
“Software Not A Macro Problem” (Torsten Slok). “The problems in software will not become a macro problem because the underlying US economy is about to take off. There are three strong tailwinds to growth over the coming quarters: 1. Many financings for data centers have already been committed for 2026. 2. There is strong political support for bringing back production facilities for semiconductors, pharmaceuticals and defense. 3. Fiscal policy is expansionary and will, according to the CBO, lift GDP growth this year by 0.9 percentage points.”
“A.I. Blitzes The Big Game” (DealBook). “The wallet was open for Sunday night’s Super Bowl LX broadcast, too, with a flood of A.I.-related ads that may prove more memorable than the game. The A.I. Bowl, as some are calling it, appeared to overshadow the Seattle Seahawks’ victory. Yes, there were some creative gems among the commercials. But the torrent of spending is reminding some of previous years when tech companies tried to capitalize on the Super Bowl limelight. Those efforts didn’t end well for the advertisers.”
“Google Bops Alongs” (Permanent Equity). “On September 22, 2011, I’d bought a little Google. I wondered why I might have done that, so I googled “Google stock September 22, 2011” and was served this story about the company being investigated for its anti-competitive practices. Then I remembered that I was at an investing conference that day and that Google stock was down because people thought the government might break it up. So I bought…at what has turned out to be a cost basis of $13 per share.”
What we’re reading (2/8)
“Dow, S&P 500, Nasdaq Futures Rise With Wall Street Looking To Continue Dow 50,000 Rally” (Yahoo! Finance). “US stock futures edged higher Sunday night as investors geared up for a packed week of economic data and corporate earnings, following a turbulent stretch that ended with the Dow Jones Industrial Average reaching a record close above 50,000 on Friday.”
“Stocks’ Sharp Rebound Is Only Making Investors More Nervous” (Wall Street Journal). “The tensions remain as stocks head into the new week. Even during Friday’s surge, there were lingering signs of investors’ skepticism about the mammoth amounts of cash being funneled into AI expenditures. Amazon.com shares slid 5.6%, losing around $133 billion in market value after the company said it plans to spend $200 billion on AI-related costs this year. Alphabet shares fell 2.5%.”
“The Secular Decline in Interest Rates And The Rise Of Shadow Banks” (alpha architect). “For decades, traditional commercial banks dominated the mortgage market. However, over the last 20 years, a massive shift has occurred, with “shadow banks”- non-depository institutions like Quicken Loans -capturing nearly half of all originations. While many attribute this to new technology or post-crisis rules, recent research reveals a deeper economic catalyst: the secular decline in interest rates.”
“The Hidden Truth About Private Market Returns” (Larry Swedroe). “Private equity returns can be deceiving. Analysis from Ares Management shows that two funds reporting the same internal rate of return (IRR) can leave investors with dramatically different dollar outcomes—a gap driven more by fund structure than manager skill.”
“The Fall Of The Nerds” (Noahpinion). “It occurs to me that this represents something momentous — the end of an economic age. My entire life has been lived within a well-known story arc — the relentless rise, in both wealth and status, of a broad social class of technical professionals. That rainbow may now be at an end. The economic changes — not just on careers, education, and the distribution of wealth, but on the entire way our cities and national economies are organized — could be profound.”
What we’re reading (2/7)
“Why A 175-Year-Old Glassmaker Is Suddenly An AI Superstar” (Wall Street Journal). “The company that once made glass bulbs for Thomas Edison lost money on fiber-optic cables for nearly 20 years. Now, in the global race to build enough computing power for a future driven by artificial intelligence, Corning’s cables have become the connectors of choice. The Cinderella story for a relatively unflashy but high-tech component has been a boon to the 175-year-old company, and a lesson in how being willing to lose money on new ideas for a long time can pay off. Corning stock is hovering around its all-time high, boosted by a recently announced $6 billion deal with Meta to supply fiber-optic cable for the company’s rapidly growing array of AI data centers.”
“The AI Boom Is So Huge It’s Causing Shortages Everywhere Else” (Washington Post). “Electricians are getting harder to find, and some construction projects are on hold. Smartphones are expected to get pricier for potentially years to come. And promising innovations are being starved of investment funding. Those are just some of the domino effects from the technology industry’s insatiable spending on artificial intelligence, which is diverting resources and attention from other sectors of the economy.”
“America’s Rare-Earths Solution Is Hiding In Plain Sight” (New York Times). “China does have the world’s largest reserves of rare earths, and it mines more of them than any other nation. But that does not mean it has a monopoly on geological supplies of these and other critical minerals. The United States has plentiful reserves of its own, both in the ground and hiding in plain sight in mine waste, industrial scrap and discarded electronics. Rather than rushing to open new mines or making policy based on the assumption that China holds all the cards, America could go a long way toward meeting its growing demand for such minerals by harvesting those readily available sources.”
“Costco’s CEO Is An Unlikely Risk Taker” (CNN Business). “‘Costco’s got a really good bipartisan reputation. Everyone loves it. It’s cheap as hell and treats its workers well,’ said Alison Taylor, a clinical associate professor of business and society at the NYU Stern business school. ‘They know the lane they’re in, and they have not really wavered.’”
“Is This Crypto’s Fimbulwinter?” (Paul Krugman). “[L]et me give you three reasons this crypto winter may be different…First, Bitcoin and to a lesser extent other cryptocurrencies have long been sustained by their cult followings, investors with a deep emotional attachment to its future…I doubt that investors will have the same mystical belief in Strategy shares that they used to have in Bitcoin itself, which means that faith will no longer put a floor under prices. Second, the best case for Bitcoin has always been the argument that it can in effect become digital gold. After all, gold, like Bitcoin, is an asset that is awkward to transfer and isn’t useful as a means of payment in the modern world…But over the past few months we’ve been experiencing a lot of turmoil and uncertainty, leading to widespread talk about a ‘debasement trade’ in which investors doubt whether dollars are still the safe haven they used to be. And the verdict so far is that the future replacement for gold is … gold. Investors have piled into the yellow stuff even while dumping Bitcoin, which is acting like a speculative tech stock rather than a safe haven…Most importantly — and ironically, given the libertarian ideology that used to be pervasive in the crypto world — crypto has become very much a political asset.”
What we’re reading (2/6)
“The Road To Dow 50000 Was Perilous. What’s Next Could Be Rockier.” (Wall Street Journal). “The road to 100000 will run through an America showing many of the hallmarks of Charles Dow’s boomtowns. Artificial intelligence promises to reinvent entire industries and make many jobs obsolete. An infrastructure build-out of epic proportions is under way. The exuberance is drowning out concerns—even among top Wall Street executives—that a significant correction is due. As in 1900, the challenge today is that nobody knows precisely when.”
“Electric Shock” (City Journal). “Until shortly before the coronavirus pandemic, real electricity costs for most American families had been declining for a decade. From 2009 to 2019, the fully loaded cost—that is, the total price per kilowatt-hour including generation, transmission, distribution, and surcharges—rose from 11.5 cents to 13 cents, an increase of 13 percent, well below the 19 percent growth in the Consumer Price Index. Despite inflation, the average annual national rate even ticked down in a few of those years. That changed in 2019.”
“Tech AI Spending May Approach $700 Billion This Year, But The Blow To Cash Raises Red Flags” (CNBC). “With the heart of tech earnings season wrapping up this week, Wall Street has a clearer picture of how the artificial intelligence race is poised to accelerate in 2026. The four hyperscalers are now projected to increase capital expenditures by more than 60% from the historic levels reached in 2025, as they load up on high-priced chips, build new mammoth facilities and buy the networking technology to connect it all.”
“It’s Time To Rethink The Standard Investment Advice. But Not Too Much.” (New York Times). “Anywhere you look, anxiety abounds. Many investors are asking a fundamental question: What should I do about this? The classic answer is: Do nothing. Quick responses to market fluctuations tend to be misguided. If you are already sufficiently diversified and have an extended time horizon, your short-term losses may become longer-term gains — if major markets rebound and you stay the course. But that do-nothing approach assumes several things[.]”
“Covid’s Quiet Retreat” (The Progress Network). “I was curious if his conclusion held for the States as well. We only have preliminary, widely ranging estimates for the 2024–2025 flu season. But we can say that there were roughly 2-3x the number of flu to Covid hospitalizations and about five times the number of flu infections, comparing the low and high ends of each estimate to one another. On the low end, death counts were about equal, but on the high end, flu deaths were more than double. And unlike the flu, Covid death rates (and numbers) continue to drop over time, including this current season. For anyone under 75, they’re essentially at zero[.]”
What we’re reading (2/5)
“The Week Anthropic Tanked The Market And Pulled Ahead Of Its Rivals” (Wall Street Journal). “Anthropic once appeared as an also-ran in the chaotic race for AI supremacy. This week, the sophistication of the startup’s products upended the stock market. A simple set of industry-specific add-ons to its Claude product, including one that performed legal services, triggered a dayslong global stock selloff, from software to legal services, financial data and real estate. Then, Anthropic unveiled Super Bowl ads that taunt rival OpenAI.”
“Dow, S&P 500, Nasdaq Futures Plummet As Amazon’s Earnings Flop Set To Deepen Tech Rout” (Yahoo! Finance). “The overnight moves followed a sharp sell-off during Thursday’s regular session, led once again by technology stocks. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) have now slipped into negative territory for 2026. And after the bell, Amazon (AMZN) added to the gloom. Shares plunged over 10% in after-hours trading after the company posted earnings per share that missed Wall Street estimates and projected capital expenditures of $200 billion for the year, raising concerns about the extent of AI spend.”
“Should AI Chatbots Have Ads? Anthropic Says No.” (ars technica). “‘There are many good places for advertising. A conversation with Claude is not one of them,’ Anthropic wrote in a blog post. The company argued that including ads in AI conversations would be ‘incompatible’ with what it wants Claude to be: ‘a genuinely helpful assistant for work and for deep thinking.’”
“Why International Stocks May Win Gold Again In 2026” (Morningstar). “To valuation-driven investors, international stocks’ outperformance is about ‘reversion to the mean.’ While the US market is undeniably home to some phenomenal companies, its success has also owed to ‘margin expansion,’ or price appreciation out of proportion to fundamentals. By contrast, stocks outside the US came into 2025 cheap, whether because of elections in Latin America, Chinese property market woes, or Europe’s stagnant economy. It’s no coincidence that India, one of the most disappointing global markets in 2025, enjoyed several strong years prior.”
“He’s Wall Street’s Biggest Showman. Should You Trust Him?” (Barron’s). “Combined with his famously optimistic views on the sector and frequent media appearances, Ives has gone mainstream as Wall Street’s highest-profile stock analyst, boosted by his prolific feed on X, where he has more than 230,000 followers. Ives’ growing set of overlapping business interests—and the potential impact on his research—are less well known. Ives’ extracurricular roles—with digital-assets firm Eightco Holdings and marketing-tech provider Zeta Global Holding —and his connection to Wedbush’s AI stock fund aren’t regularly disclosed in research reports. The bio atop his X feed notes some of the roles, but individual posts —where he regularly talks up the ‘AI revolution’—often lack context. The details are missing at a moment when investors are scrambling to distinguish hype from reality.”
What we’re reading (2/2)
“Elon Musk Says SpaceX Has Acquired xAI” (Wall Street Journal). “The combination brings together a mature and dominant company in SpaceX, with one that is in a nascent stage. Musk’s xAI is also facing formidable competition from OpenAI, Anthropic and others to build large language models and big businesses around artificial-intelligence technology. In his memo, Musk said global electricity demand for AI can’t be met with data centers on the ground, and that space-based technology will be the only way to scale up AI over the long term.”
“Palantir Beats Fourth-Quarter Estimates On The Strength Of AI And Defense Demand” (CNBC). “Looking forward, the AI-powered software provider said it expects $1.532 billion to $1.536 billion in revenue for the first quarter, well above the $1.32 billion projected by FactSet. For fiscal 2026, the company guided to a range of $7.182 billion to $7.198 billion in revenue, beating the FactSet expectation of $6.22 billion.”
“The Dot-Com Optimists Got A Lot Right” (Bloomberg). “An analysis of Mary Meeker’s late-90s internet reports suggests she was often accurate, or even too conservative.”
“What Comes After The Bubble Could Be Electrifying” (Sam Ro). “If AI is all it’s cracked up to be, the winners in the stock market should extend far beyond the large-cap tech hyperscalers currently building the AI infrastructure. As BofA’s Savita Subramanian wrote back in June 2023: ‘The larger benefit may be had by old-economy, inefficient companies that can increase earnings power more permanently from efficiency and productivity gains.’ It’s too early to say conclusively, but the market may be in the process of getting in front of this phase of the AI narrative, as small-cap stocks have recently been outperforming large-cap stocks. As Wells Fargo’s Ohsung Kwon argues, small-cap stocks (as tracked by the Russell 2000, or RTY) could see a bigger tailwind from AI than large-cap stocks (as tracked by the S&P 500 or SPY). ‘We see signs that small caps have been slower to adopt AI than large caps,’ Kwon wrote on Monday. ‘We believe the next leg of AI adoption is in small caps — the longer-term bull case for RTY. We estimate every 1% labor cost saving translates to a ~2% EPS boost for SPX, but >6% for RTY.’”
“The Zero-Beta Interest Rate” (Sebastian Di Tella, Benjamin Hébert, Pablo Kurlat and Qitong Wang). “We used equity returns to construct a time-varying measure of the zero-beta interest rate: the expected return of a stock portfolio orthogonal to the stochastic discount factor. In contrast to safe rates, the zero-beta rate fits the aggregate consumption Euler equation remarkably well, both unconditionally and conditional on monetary policy shocks, and is high, volatile, and persistent enough to explain the average return and most of the volatility of the market portfolio. The puzzle is whey safe rates are so low, stable, and is connected from both consumption and the zero-beta rate.”
January performance update
Prime: -5.14%
Select: +3.42%
SPY ETF: +0.91%
Bogleheads Portfolio (80% VTI + 20% BND)
February picks available now
The new Prime and Select picks for February are available starting now, based on a model run put through today (January 31). As a note, I will be measuring the performance on these picks from the first trading day of the month, Monday, February 2, 2026 (at the mid-spread open price) through the last trading day of the month, Friday, February 27, 2026 (at the mid-spread closing price).
What we’re reading (1/30)
“How Fed Pick Warsh Survived Trump’s Ultimate Reality Show” (Wall Street Journal). “Warsh had something Hassett didn’t: an extensive network of CEOs, finance bigwigs and creatures of the GOP establishment that he had cultivated over decades. He relied on that network to stay solidly in the conversation. It didn’t hurt that his father-in-law, Estée Lauder heir Ronald Lauder, is a major Republican donor and longtime Trump acquaintance. At a private conference in New York in December, JPMorgan Chase CEO Jamie Dimon said Warsh would make a great chair, according to people familiar with his remarks…Trump told associates over the holidays that he had been struck by Warsh’s acumen and good looks.”
“Silver Plunges 30% In Worst Day Since 1980, Gold Tumbles As Warsh Pick Eases Fed Independence Fear” (CNBC). “Gold and silver prices plunged Friday, as President Donald Trump’s nomination for the next chair of the Federal Reserve, Kevin Warsh, appeared to relieve concerns about the central bank’s independence and sent the dollar soaring.”
“The $100 Billion Megadeal Between OpenAI And Nvidia Is On Ice” (Wall Street Journal). “[T]he two sides are rethinking the future of their partnership, some of the people said. The latest discussions, they said, include an equity investment of tens of billions of dollars as part of OpenAI’s current funding round.”
“Saks To Close Most Of Its Off 5th And Last Call Discount Stores” (CNN Business). “By shutting down the discount stores, Saks Global’s attention has shifted to its luxury offerings at Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman. It’s a major shift for the company, which floundered under a heavy debt load following its purchase of rival Neiman Marcus in 2024. However, even before the purchase, the company was already in a precarious financial situation.”
“A Lot Of Population Numbers Are Fake” (David Oks). “[W]e simply have no idea how many people live in many of the world’s countries.”
What we’re reading (1/29)
“Fed Contender Kevin Warsh Meets With Trump Ahead Of Announcement” (Wall Street Journal). “Kevin Warsh, one of the finalists to be the next Federal Reserve chair, met with President Trump at the White House on Thursday, according to people familiar with the matter, one day before the president is set to announce his choice to lead the central bank.”
“Trump Says He’ll Announce Fed Chair Nominee On Friday Morning As Kevin Warsh’s Odds Soar” (Yahoo! Finance). “President Trump said Thursday that he will announce his nominee to be the next chair of the Federal Reserve on Friday morning. Trump told reporters Thursday night at the premier of First Lady Melania Trump's movie, "Melania," that he would announce the decision Friday morning. Asked whether he knew who he'd nominate to the role, Trump said: ‘I do.’”
“Apple Sales Surge 16% On ‘Staggering’ iPhone Demand” (CNBC). “Finance chief Kevan Parekh said that Apple expects revenue this quarter to rise between 13% and 16% on an annual basis, which would be equivalent to between $107.8 billion and $110.66 billion. Analysts polled by LSEG were expecting $104.84 billion. Apple said it expects constrained iPhone supply during the period.”
“School Is Way Worse For Kids Than Social Media” (Unpublishable Papers). “In short, school sucks so much that it reliably makes students want to hide at home, visit the ER, and take their own lives. The data has been completely clear on these points for years.”
“Iran Elite ‘Transfer $1.5bn To Dubai’ As They ‘Abandon Ship’ Amid US Strike Fears” (Daily Express). “US Treasury Secretary Scott Bessent revealed on Wednesday that Washington is monitoring what he characterized as a massive exodus of capital by Iran's ruling class, as anxieties mount over the potential downfall of the Islamic Republic amid widespread unrest and looming threats of American military action.”
What we’re reading (1/28)
“Fed Holds Interest Rates Steady In First Policy Meeting Of 2026 In Split Decision” (Yahoo! Finance). “The Federal Reserve held interest rates steady in a range of 3.5%-3.75% in its first meeting of the year, as widely expected. The decision was not unanimous, and two Federal Open Market Committee officials dissented. Federal Reserve governors Stephen Miran and Chris Waller voted to cut interest rates by 25 basis points.”
“What The Slide In The Dollar Means For Trade, Travel And Investment” (Wall Street Journal). “Wall Street is betting there will be more weakness to come, potentially ending a yearslong run in which the dollar has far outstripped many peers, enticing investors the world over to park more money in America.”
“Dow, S&P 500, Nasdaq Futures Slip As Tesla, Meta, Microsoft Diverge After Earnings” (Yahoo! Finance). “Meta (META) surged as much as 10% in extended trading after issuing a first-quarter revenue outlook that topped Wall Street estimates, even as it said its AI ambitions would fuel spending to as much as $135 billion this year. Tesla (TSLA) gained around 2% after reporting quarterly results that exceeded expectations. But Microsoft (MSFT) slid nearly 7% as investors reacted to slower cloud growth during its fiscal second quarter and higher-than-anticipated capital spending and finance lease costs. Amazon (AMZN) fell in tandem in after-hours action.”
“When All Bets Are Off, All Bets Are On” (Wall Street Journal). “A new study of speculative financial behavior over more than two centuries finds exactly what anyone with common sense would have predicted: People take more risk when stocks go up and the economy is booming, and it can last surprisingly long. ‘Epochs of high speculation coincide with higher stock market returns and higher economic growth,’ write economic historians William Quinn, John Turner and Clive Walker. They add that ‘a prolonged period of low interest rates can lead to the gradual development of a culture of more speculative investment.’”
“Behavioral Economics Of AI: LLM Biases And Corrections” (Pietro Bini, Lin William Cong, Xing Huang, and Lawrence J. Jin). “Do generative AI models, particularly large language models (LLMs), exhibit systematic behavioral biases in economic and financial decisions? If so, how can these biases be mitigated? Drawing on the cognitive psychology and experimental economics literatures, we conduct the most comprehensive set of experiments to date—originally designed to document human biases—on prominent LLM families across model versions and scales. We document systematic patterns in LLM behavior. In preference-based tasks, responses become more human-like as models become more advanced or larger, while in belief-based tasks, advanced large-scale models frequently generate rational responses. Prompting LLMs to make rational decisions reduces biases.”
What we’re reading (1/27)
“Trump Has Four Finalists To Run The Fed. None Of Them Are Exactly What He Wants.” (Wall Street Journal). “The difficulty: Trump wants something that may not exist—a new chair who will pursue his demands for lower interest rates while still commanding enough credibility on Wall Street and from his colleagues to deliver them.”
“Weekly Market Pulse: Maybe We Need Our Golden Fetters” (Alhambra Investments). “This is, in my opinion, the most interesting chart in all of finance. This shows the return from gold versus the total return of the S&P 500 since 1/1/2000. As you can see, gold’s return has exceeded that of stocks by almost 3 to 1; it isn’t even close. If you had bought gold at the turn of the century, at no point over the next 25 years would you have been better off having bought the S&P 500 instead. There were periods of outperformance by stocks so you could have done better if you were able to trade those inflection points, but for buy and hold investors, the 21st century has, so far, been the Golden Century. Is gold trying to tell us something or is it just the latest object of speculation in a society increasingly addicted to gambling?”
“Trading Robinhood On Robinhood And Other Circularities” (Owen Lamont). “There’s been much discussion about circular deals in AI; I myself am skeptical that these deals are cause for alarm. But there’s another circularity that’s flying under the radar: Robinhood (the stock) is one of the top holdings of the customers of Robinhood (the company). As of December 2025, Robinhood is the 26th most popular holding of Robinhood customers. Another example is Moomoo, a retail broker similar to Robinhood. On the list of U.S. stocks most popular with Moomoo customers, you’ll usually find the ADR of Moomoo’s parent company.”
“Why Nike Is Cutting Hundreds Of Jobs, Starting At Its Warehouses” (MarketWatch). “In a statement Monday, the sneaker maker said it was ‘taking steps to strengthen and streamline our operations so we can move faster, operate with greater discipline and better serve athletes and consumers.’”
“Inside The Savannah Bananas: $80M+ In Ticket Sales, $50M+ In Merch, And A $1B Valuation Debate” (Huddle Up). “The Bananas played 113 games last year across college, minor league, MLB, and NFL stadiums. At 2.2 million tickets sold, the Bananas would have ranked 20th in MLB ticket sales, ahead of the Cincinnati Reds, Cleveland Indians, Washington Nationals, Baltimore Orioles, Minnesota Twins, and 2x more than the Miami Marlins (1.1M).”
February picks available soon
I’ll be publishing the Prime and Select picks for the month of February before Monday, February 2 (the first trading day of the month). As always, SPC’s performance measurement for the month of January, as well as SPC’s cumulative performance, will assume the sale of the January picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Friday, January 30).
What we’re reading (1/24)
“Airlines Cancel More Than 13,000 Weekend Flights As Massive Winter Storm Sweeps Across The U.S.” (CNBC). “Airlines canceled more than 13,000 U.S. flights this weekend as a massive winter storm swept across the country, bringing heavy snow, ice and sleet, followed by bitter cold. More than 4,000 flights on Saturday were canceled, according to flight tracker FlightAware. Many of Saturday’s cancellations were in and out of Dallas Fort Worth International Airport, with nearly 1,500 scrubbed flights, and at Dallas Love Field, with 190 cancellations, the majority of the schedule at each airport.”
“The Wall Street Star Betting His Reputation On Robots And Flying Cars” (Wall Street Journal). “The job Jonas has is about as far away from the crustaceans as Earth is from Mars. Jonas, 51, is the bank’s chief robot strategist, a role it created for him in the fall. His actual title: global embodied AI strategist. The role is a first for Morgan Stanley as it dives deeper into the boom in private markets, an increasingly lucrative area across Wall Street. The ultrawealthy are able to buy and sell shares of the buzziest private companies via invite-only transactions long before the companies list their shares on public stock exchanges. The number of public companies in the U.S. is half of its peak in the late 1990s.”
“Streaming And Texting On The Moon: Nokia And NASA Are Taking 4G Into Space” (CNN Business). “Texting on the Moon? Streaming on Mars? It may not be as far away as you think. That’s the shared vision of NASA and Nokia, who have partnered to set up a cellular network on the Moon to help lay the building blocks for long-term human presence on other planets. A SpaceX rocket is due to launch this year — the exact date has yet to be confirmed — carrying a simple 4G network to the Moon. The lander will install the system at the Moon’s south pole and then it will be remotely controlled from Earth.”
“Schrödinger’s Cat Just Got Bigger: Quantum Physicists Create Largest Ever ‘Superposition’” (Nature). “Schrödinger’s cat just got a little bit fatter. Physicists have created the largest ever ‘superposition’ — a quantum state in which an object exists in a haze of possible locations at once. A team based at the University of Vienna put individual clusters of around 7,000 atoms of sodium metal some 8 nanometres wide into a superposition of different locations, each spaced 133 nanometres apart. Rather than shoot through the experimental set up like a billiard ball, each chunky cluster behaved like a wave, spreading out into a superposition of spatially distinct paths and then interfering to form a pattern researchers could detect.”
“Which One Doesn’t Belong?” (Scott Sumner). “Modern $20 bills and bitcoin are both examples of fiat money. They are not backed by any sort of real asset such as gold or silver, and their values are determined by a combination of “monetary policy” and private sector shocks to money demand.”
What we’re reading (1/22)
“The Deal To Secure TikTok’s Future In The US Has Finally Closed” (CNN Business). “The transaction’s close concludes a yearslong effort to secure TikTok’s long-term future in the United States and address concerns that it posed a national security risk.”
“Natural-Gas Prices Soar As U.S. Braces For Arctic Blast” (Wall Street Journal). “Natural-gas prices have jumped 63% this week in response to forecasts calling for some of the coldest, snowiest weather in years to freeze the country from the West Texas desert to the Great Lakes. The forecasts have stoked fears of a repeat of the deadly winter storm that froze Texas in 2021 and left millions of people without electricity for days. Energy producers and utilities are preparing for the worst. The Energy Department late Thursday ordered grid operators to be prepared to take extraordinary steps to tap in to backup power generation.”
“Intel Stock Plunges 13% On Soft Guidance, Concerns About Chip Production” (CNBC). “Intel said it expected first-quarter revenue between $11.7 billion and $12.7 billion, and breakeven adjusted earnings per share. That came in below LSEG expectations of 5 cents earnings per share on $12.51 billion in sales.”
“This Stock-Market Indicator Just Flashed One Of Its Most Bullish Signals Since 2000” (MarketWatch). “The average short-term timer that my firm tracks reduced recommended equity exposure on Tuesday by almost 20 percentage points, as judged by the Hulbert Stock Newsletter Sentiment Index. That’s one of the biggest one-day HSNSI drops since 2000, which is how far back data extend.”
“Teaching Economics To The Machines” (Hui Chen, Yuhan Cheng, Yanchu Liu & Ke Tang). “Structural economic models, while parsimonious and interpretable, often exhibit poor data fit and limited forecasting performance. Machine learning models, by contrast, offer substantial flexibility but are prone to overfitting and weak out-of-distribution generalization. We propose a theory-guided transfer learning framework that integrates structural restrictions from economic theory into machine learning models. The approach pre-trains a neural network on synthetic data generated by a structural model and then fine-tunes it using empirical data, allowing potentially misspecified economic restrictions to inform and regularize learning on empirical data. Applied to option pricing, our model substantially outperforms both structural and purely data-driven benchmarks, with especially large gains in small samples, under unstable market conditions, and when model misspecification is limited. Beyond performance, the framework provides diagnostics for improving structural models and introduces a new model-comparison metric based on data-model complementarity.”
What we’re reading (1/21)
“Trump’s Head-Spinning Greenland U-Turn” (Wall Street Journal). “The about-face started with an hourlong speech at the World Economic Forum, where the U.S. president said he wouldn’t deploy the military to take control of Greenland. Later, following a meeting with North Atlantic Treaty Organization Secretary-General Mark Rutte, Trump called off promised tariffs on European nations, contending that he had ‘formed the framework of a future deal’ with respect to the largest island in the world.”
“Stocks Rebound After Trump Backs Off European Tariffs” (New York Times). “Stocks stabilized on Wednesday, recouping much of Tuesday’s sell off after President Trump backed down from his previous threat of imposing more tariffs on any European ally that went against his plan to take over Greenland. Mr. Trump said that the tariffs, originally planned to start at the beginning of next month, were no longer necessary because he had reached ‘the framework of a deal’ related to Greenland with European counterparts.”
“Big Tech Earnings Put Spotlight On AI And Memory Shortage As Trump Tariff Threats Loom” (Yahoo! Finance). “AI will undoubtedly lead the conversation. As in prior quarters, questions remain about how companies are monetizing their vast investments in the red-hot technology and whether hyperscalers like Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) and social media giant Meta (META) will continue to increase spending.”
“Trump Warns Powell Won’t Be ‘Very Happy’ If He Stays On At Fed” (Bloomberg). “‘We’ll see how it all works out,’ Trump said in an interview from Davos, Switzerland with CNBC that aired Wednesday. But when pressed on Powell potentially staying on as a Fed governor until 2028, Trump who has been searching for a replacement chair, cautioned that ‘if that happens, his life won’t be very, very happy, I don’t think.’”
“Howard Lutnick Heckled At World Economic Forum Dinner” (Financial Times). “The gathering on Tuesday night descended into uproar after combative remarks from Lutnick, the people said, with widespread jeering, some guests walking out and appeals for calm from Fink, head of the world’s largest asset manager and interim co-chair of WEF.”
What we’re reading (1/20)
“The $100 Billion Of U.S. Goods At Risk Of Tariffs In Trump’s Greenland Push” (Wall Street Journal). “The European Union created a list of hundreds of categories of American products last year that it planned to target with import duties if trade talks with the U.S. unraveled. Those levies were put on hold after the two sides struck a deal last summer, but are set to kick in on Feb. 7 unless the bloc acts to extend the suspension.”
“US Oil Production Now 20% Of Global Oil Production” (Torsten Slok). “US oil production has increased dramatically over the past 15 years…and most of the rise is used for exports[.]”
“Is A Stock Market Rotation Underway? These Sectors Are Outpacing Tech In 2026” (Morningstar). “The market is showing hints of a rotation early this year as small-cap companies rise and the tech sector stumbles, reversing stock market trends from 2025. ‘We are most definitely seeing a rotation, and it has picked up some momentum from the end of last year,’ says Michael Arone, chief investment strategist at State Street. Large-cap companies ended 2025 on a high with gains of 19.78%, ahead of their small- and mid-cap counterparts. But early data points to a possible David-and-Goliath reversal. Small-cap companies’ gains have reached 5.57% in the year to date, while large caps have gained a mere 0.56%. Analysts are also seeing signs of a reversal in sector results. Tech is currently the worst-performing sector, losing 0.40% this year. That’s a major shift after 2025’s AI investment boom lifted tech to second best across all US market sectors.”
“Shifting Tides In Global Markets: The Reemergence Of International Investing” (Enterprising Investor). “After more than a decade of US market dominance, 2025 may have marked a turning point for global investors. International equities have surged ahead of their US counterparts, evidenced by strong earnings growth and supported by policy reform momentum and a reassessment of ‘American exceptionalism.’”
“NYSE To Launch New Venue For Tokenized Stocks” (Ledger Insights). “The New York Stock Exchange (NYSE) is developing a platform to trade and settle tokenized stocks 24/7, though the initiative requires regulatory approval before launching. Additionally, parent company Intercontinental Exchange (ICE) is working with BNY and Citi to support tokenized deposits at its clearing houses, marking new banking partnerships beyond its earlier collaboration with stablecoin issuer Circle.”
What we’re reading (1/19)
“Global Leaders Gather In Switzerland To Ponder The Future Of A Messy World” (New York Times). “Topics of discussion at Davos — according to U.S. and European analysts and former policymakers interviewed ahead of the event — are likely to include Russia’s war with Ukraine; prospects for global trade and markets; the probability of China invading Taiwan; and the risks of a Middle East flare-up caused by the recent uprising in Iran.”
“The Risk Of Higher U.S. Inflation In 2026” (Peter Orszag, Adam Posen). “The consensus view among forecasters is that inflation will continue its gradual descent toward the Federal Reserve's 2 percent target through 2026. Similarly, market pricing suggests investors believe the Fed has largely won its inflation battle. In our view, however, this optimism is premature. We think it is more likely that inflation will surprise to the upside — potentially exceeding 4 percent by the end of 2026. The core drivers are the lagged effects of tariffs, an expansion in the fiscal deficit (which could exceed 7 percent of GDP this year), a tighter labor market reflecting the effects of the shift in immigration policy, monetary policy that is looser than commonly appreciated, and inflationary expectations that are drifting upwards. We believe these factors outweigh the downward‑pressure trends that consensus has been fixated on—namely, the ongoing decline in housing inflation and gains in productivity.”
“Even MBAs From Top Business Schools Are Struggling To Get Hired” (Wall Street Journal). “At Duke University’s Fuqua School of Business, for instance, 21% of job seekers were still looking for work three months after graduation last summer. About 15% of those at the University of Michigan’s Ross School of Business remained on the hunt. Those rates are similar to 2024 but sharply higher than 2019, when many employers couldn’t hire enough white-collar professionals. Just 5% of job-seeking M.B.A.s graduating from Duke then were still looking for work three months postgraduation. At Michigan that year, it was 4%.”
“UK Productivity Surge Signals Economic Turnaround, Study Finds” (Bloomberg). “Britain is seeing early signs of a long-awaited turnaround of its productivity woes, according to an alternative measure that suggests output per hour worked has risen at a pace not seen since before the financial crisis. The Resolution Foundation said a ‘blistering’ productivity surge has been masked by problems with official statistics and pointed to encouraging indications of a clearout of ‘zombie’ firms that contribute little to the economy.”
“Why London’s Chimney Sweeps Are Enjoying A Resurgence” (New York Times). “The mass adoption of central heating in the second half of the 20th century, and the introduction of clean air regulations, meant open fires fell out of fashion and the industry shrank. But some firms survived. Now, many sweeps, including those in the Firkins family business, say the trade has been experiencing an improbable resurgence. According to the National Association of Chimney Sweeps, demand has been bolstered by high energy prices, the popularity of wood-burning stoves and an international climate that has prompted warnings that electricity supplies could be vulnerable to attack by hostile states like Russia.”
What we’re reading (1/18)
“The Magnificent Seven Drove Markets. Now They’re Pulling In Different Directions.” (Wall Street Journal). “The Magnificent Seven is now the Mag Five. Or is it the Fab Four? Investors are no longer grouping the market’s big tech stocks together in quite the same way. The fortunes of what was once Wall Street’s favorite band of megacap names have diverged in the past year, as professional and ordinary investors alike take a more cautious view of the artificial-intelligence spending boom. Only Alphabet and Nvidia outperformed the S&P 500 in 2025.”
“Financialization: How Deficits Inflate Profits And Equity Valuations” (Research Affiliates). “The mid-twentieth-century U.S. economy was built on a foundation of robust domestic saving and investment that created a virtuous cycle of broadly shared growth in prosperity. Seventy years later, that foundation has eroded. Corporate profits and equity valuations have soared even as the net investment that once propelled growth has fallen by more than half. What explains this paradox? The answer is the financialization of the economy.”
“Why The Tech World Thinks The American Dream Is Dying” (Wall Street Journal). “Sheridan Clayborne, a young man working in the AI-startup scene, seemed to embody the current zeitgeist when he was quoted this past fall in the San Francisco Standard. ‘This is the last chance to build generational wealth,’ the online news site quoted him saying. ‘You need to make money now, before you become a part of the permanent underclass.’ It was a sentiment that would have felt at home a few years earlier during the meme-stock craze and YOLO investing approach.”
“Where Meta’s Metaverse Vision Went Wrong” (Yahoo! Finance). “The idea was that users would eventually work and play in interconnected virtual worlds via 3D avatars using full headsets or high-tech glasses. Five years and billions of dollars later, that vision appears to have crumbled.On Wednesday, Meta laid off 1,500 workers from its Reality Labs division, which houses its metaverse business, and shuttered three VR game studios. In December, the company put planned third-party VR headsets from ASUS and Lenovo, which were to run on Meta's VR operating system, on hold, according to Engadget.”
“Investors Sell Dollar, Seek Safety As Trump Threatens Greenland Tariffs” (Reuters). “Investors headed for safe havens while Europe prepared to push back on Monday after U.S President Donald Trump threatened escalating tariffs on allies in the way of his ambition to buy the Danish arctic territory of Greenland.”
What we’re reading (1/17)
“Claude Is Taking The AI World By Storm, And Even Non-Nerds Are Blown Away” (Wall Street Journal). “They call it getting ‘Claude-pilled.’ It’s the moment software engineers, executives and investors turn their work over to Anthropic’s Claude AI—and then witness a thinking machine of shocking capability, even in an age awash in powerful artificial-intelligence tools. Many coders spent their holiday breaks on a “Claude bender,” testing out the capabilities of the latest Anthropic model, Claude Opus 4.5, which they used within a desktop coding tool called Claude Code…Some described a feeling of awe followed by sadness at the realization that the program could easily replicate expertise they had built up over an entire career.”
“Move Over, ChatGPT” (The Atlantic). “Part of what works so well about Claude Code is that it makes it easy to connect all sorts of apps. Sara Du, the founder of the AI start-up Ando, told me that she is using it to help with a variety of life tasks, like managing her texts with real-estate agents. Because the bot is hooked up to her iMessages, she can ask it to find all of the Zillow links she’s sent over the past month and compile a table of listings. ‘It gives me a lot of dopamine,’ Du said. Andrew Hall, a Stanford political scientist, had Claude Code analyze the raw data of an old paper of his studying mail-in voting. In roughly an hour, the bot replicated his findings and wrote a full research paper complete with charts and a lit review.”
“Is This Billionaire A Financial Genius Or A Fraudster?” (New York Times). “Bitcoin has attracted plenty of prophets, braggarts and flat-out baddies. Of late, though, no one in the industry is attracting more attention and scorn than Mr. Saylor, a would-be magnate and accused tax scofflaw who in six short years has transformed his also-ran technology company, Strategy, into a Bitcoin betting machine.”
“Stocks, Bubbles & Market Myths” (Barry Ritholtz). “Perhaps the Mag 7 dominance is fading; if five of these seven companies underperformed the S&P 500, that means the other 493 companies are catching up in both price appreciation and (eventually) earnings growth.”
“Growth Experiences And Trust In Government” (Timothy Besley, Christopher Dann, Sacha Dray, QJE). “Exploiting cohort-level variation, we find that individuals who experience higher GDP growth are more prone to trust their governments, with larger effects found in democracies. Higher growth experiences are also associated with improved perceptions of government performance and living standards. We find no similar channel between growth experience and interpersonal trust. Second, more recent growth experiences appear to matter most for trust in government, with no detectable effect of growth experienced during one’s formative years, closer to birth or before birth. Third, we find evidence of a “trust paradox” whereby average trust in government is lower in democracies than in autocracies.”