- Morning Download
- Posts
- šŖ DeepSeek is a killer
šŖ DeepSeek is a killer
and time to invest in gold?
Good morning investors! Yesterday was a roller coaster with new AI from China creating havoc, yet we saw quick recovery in some sectors.
Watch Trajanās Livestream where he covered the DeepSeek drama yesterday and subscribe for more livestreams.
Fun fact: Nvidia lost $589 billion in market value yesterday, more in one day than any other company in history.
Today we cover:
Gold to rally?
DeepSeek causes chip stocks to fall
Why file taxes now.
š Economy and News
Gold Set for Record-Breaking 2025 Amid Inflation and Geopolitical Risks
Gold prices are poised for a historic 2025, driven by inflation concerns and geopolitical uncertainty during U.S. President Donald Trumpās second term, despite a strong dollar and scaled-back Federal Reserve rate-cut expectations. Analysts forecast an average price of $2,756 per troy ounce, up from $2,674 predicted three months ago, with spot gold recently at $2,742 after hitting a record $2,790.15 in October.
The metal surged 27% in 2024, its best performance since 2010, as investors turned to gold as a hedge against risks while the Federal Reserve cut rates three times. Though prices dipped after the U.S. election and a Fed decision in December, gold rebounded on concerns over potential U.S. import tariffs and trade-driven inflation.
While central bank purchases and speculative interest are expected to remain strong, high prices may dampen jewelry demand in price-sensitive Asian markets.
Silver Faces Mixed Outlook Despite Supply Deficit
Silver is forecast to average $33.10 per ounce in 2025, benefiting from industrial demand in green technologies. However, weaker investment demand and potential tariff impacts on global growth could limit gains, analysts warn. Despite a market deficit, the metalās current price of $30.20 remains below previous expectations.
Gold bars can be a great way to invest in gold. Check this link for ways to invest in the shiny metal.
Global hits:
DeepSeek worries drive yen and Swiss franc higher, dollar drops.
Morgan Stanley cuts UK growth forecast for 2025.
Goldman Sachs predicts euro area employment growth slowdown.
Exciting: Weight-loss drug developer Metsera targets up to $1.78 billion valuation in US IPO.
Chinese struggles: Chinaās industrial profits declined for a third consecutive year in 2024, dropping 3.3%. While December profits rose 11% year-over-year, this failed to offset earlier losses, following a 4.7% decline in the January-November period. Despite achieving 5% GDP growth, the economy struggles with a weak property market, sluggish demand, and low business confidence. The decline highlights the need for stronger policy support, especially as new U.S. tariffs loom under the Trump administration.
Do you believe China is ahead of the US in the AI race? |
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š Stocks
S&P 500 6,012.28 (-1.47%)
DJIA 44,713.58 (+0.65%)
NASDAQ 19,341.83 (-3.07%)
BRENT CRUDE 77.23 (+0.21%)
* Prices as of Jan 28th, 12:20 AM UTC
Chinese AI Startup DeepSeek Sparks Global Tech Sell-Off, Raises Questions About U.S. AI Dominance
The U.S. technology sector faced a sharp sell-off as Chinese startup DeepSeekās rapid advancements in artificial intelligence fueled concerns over Americaās competitive edge. Nvidia saw its stock plunge over -16%, while chipmakers Broadcom and Advanced Micro Devices lost -17% and -6%, respectively. Meanwhile, Micron and Arm Holdings recorded declines of more than -11% and -10%.
Despite the massive sell-off, Nvidia praised DeepSeek, calling it an "excellent AI advancement and a perfect example of Test Time Scaling."
DeepSeekās release of a free, open-source large language model in Decemberādeveloped in just two months for under $6 millionāhas become a pivotal moment, shaking market confidence.
The ripple effects extended globally. European chipmakers ASML and ASM International saw significant pullbacks, while Japanese chip stocks like Advantest and Tokyo Electron tumbled in Asian markets. The rapid rise of DeepSeekās AI technology has fueled skepticism about the vast sums U.S. tech giants are pouring into AI development and data centers.
DeepSeekās accomplishments highlight the potential of lean AI innovation. According to semiconductor analyst Srini Pajjuri, āDeepSeek clearly doesnāt have access to as much compute as U.S. hyperscalers and somehow managed to develop a model that appears highly competitive.ā Pajjuri suggests that the startupās success could heighten the urgency among U.S. hyperscalers, such as Amazon and Microsoft, to maximize their GPU-driven infrastructure advantage to differentiate themselves from cost-efficient competitors.
The startupās reasoning model, R1, is already being compared to OpenAIās o1.
Further intensifying the competitive atmosphere, DeepSeekās AI Assistant app recently surpassed OpenAIās ChatGPT as the most downloaded free app in the U.S. Apple App Store. The rapid ascent of this Chinese startup underscores the shifting dynamics in the AI landscape, raising questions about the sustainability of U.S. dominance in the field.
However, it seems the company cannot handle this popularity. The company temporarily limited registrations due to a cyberattack. The outages on Monday were the company's longest in around 90 days and coincides with its sky-rocketing popularity.
Siemenās report: Siemens Energy, the leading offshore wind turbine maker, reported preliminary first-quarter revenue of ā¬8.94 billion ($9.37 billion), up 18.4% year-over-year and slightly exceeding expectations. Order intake for the quarter fell 10.2% to ā¬13.67 billion but remained above forecasts.
The company posted a preliminary profit of ā¬463 million and expects to surpass its fiscal 2025 free cash flow guidance of up to ā¬1 billion.
After facing its largest crisis in 2023 due to quality issues in its wind turbines, Siemens Energy raised its midterm outlook in November, citing a record order book and reduced fourth-quarter losses.
Check this: Kia recalls more than 80,000 U.S. autos due to improper air bag deployment and improper wiring.
šµ Personal Finance
Why file taxes early
As the IRS has started accepting and processing 2024 income tax returns, itās time to talk about why you should consider filing early.
Faster refunds
Filing sooner means a faster refund because the IRS is usually not that busy early as it is in April, near the deadline.
Help avoid scams
Filing your tax return early is a key defense against tax-related identity theft. Fraudsters aim to file fake returns to claim refunds before you do. If you file first, their attempt will be rejected. Even if you suspect your account is compromised, file your legitimate return promptly, possibly using a paper return with IRS Form 14039, Identity Theft Affidavit. Remember, the IRS doesnāt call or email you directly. For more information, visit the IRSās Identity Theft Central.
Correct Errors and Adjust Early
If you're waiting on tax documents from employers, financial institutions, or other sources, take action early. Digital versions may be available, giving you time to resolve discrepancies. Early filing allows you to address errors like math mistakes, unreported income, or missed credits. It also lets you maximize deductions, such as offsetting investment gains with losses using Form 1099-B. Acting early reduces stress and may lower your taxable income.
Plan Ahead for 2025
Use tax season to review your overall financial situation. Adjust tax withholding with your employer or explore contributions to accounts like IRAs and HSAs, which have deadlines aligned with the tax-filing date. Traditional IRA contributions can lower taxable income, with limits of $7,000 (or $8,000 for those 50 and older) for 2024 and 2025. HSA limits for 2024 and 2025 also increased, allowing more savings for health-related expenses. For the self-employed, SEP IRAs offer tax-deductible contributions up to $70,000 in 2025. Speak to a tax advisor to tailor these strategies to your needs.
Avoid Tax Surprises
Donāt let an unexpected tax bill catch you off guard. Waiting until the last minute can leave little time to gather funds for a balance owed. This is particularly critical for self-employed individuals who must make quarterly estimated tax payments. Preparing your return early helps you avoid penalties, plan better, and reduce anxiety.
This week, we will focus on taxes in the Personal Finance section so check tomorrow for more tips.
š° Be a Better Investor
"Fortune sides with him who dares."
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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.
**Disclosure: This is a paid advertisement for Boxablās Regulation A offering. Please read the offering circular here. This is a message from Boxabl. Reservations represents a non-binding indication of interest to purchase a Casita. A reservation does not require purchase of a Casita and there is no assurance of how many will result in actual purchases.