(A MARKET CAUGHT IN THE CROSSHAIRS: WHICH WAY NOW?)
February 21, 2025
Hello everyone
Walmart's profit growth has slowed. Just how healthy is the American consumer?
Mass sackings are happening now. When people are employed, they spend. When people are not employed, they stop spending. It’s simple really.
The AI trade is motoring along; green shoots will take time to show. Competition is healthy. But is U.S. AI tech expenditure sustainable, and is its extent warranted? Deep Seek came out of nowhere as a wake-up call to U.S. tech elites.
A chaotic U.S. administration is taunting the world about tariffs. Trying to pin Trump down on his policies and plans going forward is akin to trying to catch a fish by hand in the ocean.
Bond yields are rising. Has 7% entered your mind?
What about the possibility of interest rate rises sometime this year? Start thinking about it.
Geopolitics is red hot – stakes are high as allies are being toyed with.
And the market is caught in the crosshairs.
And yet, investors are still hoping for another record high for stocks in 2025.
What universe are they in?
Uncertainty rules the stage presently. On the one hand, we can understand that the markets are in a healthy consolidation pattern – a healthy pause – after the robust market movements last year, and that bumpiness will be the new normal going forward.
On the other hand, we should be mindful of the whirlwind of factors that could buffet the market – Trump policies, Fed policy, earnings, a not-so-healthy American consumer, & the really big unknown – geopolitics.
My recommendation: put sell-stops on all your stock holdings.
QI CORNER
Linas Beliunas
This is huge! Microsoft just made a breakthrough in quantum computing and unveiled its first quantum chip Majorana 1
Majorana 1 is a quantum computing chip marking Microsoft's first use of topological qubits. These qubits are special because they use the shape or structure of the material, rather than individual particles, to store information, making them less prone to errors.
The wild part?
The chip relies on a new material called a top conductor, which can create a unique state of matter to host Majorana particles - exotic particles that are their own antiparticles.
Right now, it has eight of these topological qubits, but Microsoft’s goal is to scale up to a million qubits on a chip no bigger than your palm.
This is a huge deal because quantum computers need to be both reliable and large-scale to tackle real-world problems that classical computers can’t handle, like breaking encryption or simulating molecular interactions for new drugs.
Topological qubits are designed to be more error-resistant while current qubits are very sensitive to their surroundings, leading to mistakes.
If Microsoft succeeds, it could speed up the timeline for practical quantum computing from decades to years, opening doors in fields like:
- Cryptography: Breaking current encryption, pushing for new quantum-resistant methods.
- Drug Discovery: Faster simulation of molecular interactions, speeding up medicine development.
- Artificial Intelligence: Enhancing AI & machine learning with faster, more powerful computations.
- Climate Modeling: Better predictions through detailed simulations, aiding climate change strategies.
We're living in the golden age of tech innovation.
Fascinating times.
AUSTRALIAN CORNER
Chinese warships are in the Tasman Sea
Chinese warships are performing live firing exercises in the Tasman Sea (200 miles off the east coast of Australia). International airlines, flying between Australia and New Zealand have been warned, and most have diverted around the area.
Australian military ships and planes have been monitoring the Chinese ships for days as they pass in international waters off the coast of the Australian east coast.
Australia sees this event as a provocative act and is watching closely.
SOMETHING TO THINK ABOUT
Cheers
Jacquie
