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.”
