Jan 27, 2025
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with some commentary regarding the situation with Colombia and the latest earnings (page 1). We also start out with a look at some stocks impacted by the AI hit (page 2) in addition to new home sales data (page 3). We then review the historic divergences in breadth and price in addition to the Tech and Consumer Staples sectors (page 4). We then pivot over to the record single day decline in our AI baskets (page 5) and put a bow on the topic on the following page (page 6). We finish by reviewing today’s Treasury auctions (page 7). We then finish with a recap of the latest positioning data (pages 8 – 11).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
Jan 27, 2025
The Nasdaq is down well over 3% as of this writing with AI hardware names driving the declines. The main AI infrastructure stock — NVIDIA (NVDA) — is down roughly 20% over the last two trading days, which equates to a drop of nearly $700 billion in market cap! Amazingly, news that DeepSeek out of China had built a ChatGPT-like product for a fraction of the cost was actually circulating weeks ago at the end of last year. It wasn’t until this weekend, though, that the ramifications of this news started being debated heavily on social media platforms like X.
Our AI Basket is a set of 50 stocks with exposure to the AI Boom. The headline basket is further broken down into two sub-baskets: the Infrastructure basket and the Implementation basket. The former is comprised of stocks whose hardware and software lay the foundation for AI to work. These include companies that make semiconductors, data centers, cloud storage, and more. The Implementation basket, on the other hand, is made up of companies whose products are more oriented towards end-users of AI. This includes stocks with products like AI augmented software, copilots, automated services and the like.
Although AI stocks are down broadly today, it is the Infrastructure basket that has been hit the hardest. With DeepSeek’s supposed low-cost to build its latest ChatGPT-like offering, it has brought into question the necessity for massive capex spend on chips and datacenters, and our AI Infrastructure sub-basket is down an incredible 8.2% on the day as a result! That compares to only a 1.5% decline in our Implementation sub-basket. As shown below, since the start of our AI Baskets a little over two years ago, this is easily the worst day for our Infrastructure basket relative to our Implementation basket to date, and it isn’t even close. In tonight’s Closer, we will provide a further look into the performance of the AI baskets in the wake of the DeepSeek discussion.
Jan 23, 2025
Log-in here if you’re a member with access to the Closer.
Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with a recap of Trump’s comments in Davos (page 1) followed by a dive into home construction costs (page 2). We then check in on credit card portfolio performance (page 3). We then recap today’s 10-year TIPS auction (page 4) and finish with a rundown of the latest EIA data (page 5).
See today’s full post-market Closer and everything else Bespoke publishes by starting a 14-day trial to Bespoke Institutional today!
