So much for setting all-time record highs as this week started off with a big selloff attributed to the Chinese AI product DeepSeek.
It has become the highest demanded app on Apple over OpenAi and ChapGPT. The jury is still out on whether we have all the facts.
Never forget that Alibaba was going to run Amazon out of the retail business.
The problem with any of these concerns out of China is there is no methodology to check to see if anything published is fact or fiction.
It has been a problem for years that we have no ability to check the veracity of their claimed profits or sales.
Just to alert you that should you decide to download the app from DeepSeek, they have access to your Gmail account.
If nothing, this shows you how much of a bubble we are trading in
at the current time.
It takes so little at these levels to have the floor drop out from under you.
We started this week down as there were concerns that the Chinese had come up with a model that was far more efficient than anything a US company had provided.
Never forget the Chinese game plan is the long term.
They will lose money to gain market dominance.
You only have to look at the steel market as an example.
Enough about artificial intelligence, I would rather concentrate on earnings and interest rates.
On the latter subject, the Fed will meet this week and it doesn’t appear that there will be a rate cut.
We have just started the earnings season reports for the 4th quarter.
Then you have the new administration trying to reinvent Washington DC overnight.
We have no idea what, or if, tariffs will in fact impact our economy through higher inflation.
We have yet to have a recent metric point to a move to the 2% target or the Fed.
Having been a trader for over 40 years, I am concerned about the possibility of a selloff.
We have so much speculation in this market.
You only have to look at the price of crypto of late.
We have gone up for quite some time with no real correction.
These things do happen as there is nothing new when it comes to greed and fear.
You will never stop greed, but fear comes in the financial market when you least expect it to appear and delivers a very heavy hand.
I am heartened by the continuous reports of positive earnings from companies.
We can speculate about all sorts of unmeasurable factors, but those earnings reports are there for us to work with.
The forecasts for future earnings are way more conservative of late.
They should be as we have come so far so fast.
I don’t see any Black Swans but then, you never do.
It is just beyond reason to think though that AI will have any less impact than any of our past technological breakthroughs such as the internet and cell phones.
Caution is advisable but it should not be a hand cuff. Risk is the reward factor in investing.
It is what makes finance and the economy actually an interesting subject.
Maybe not, but it can be very rewarding.
