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In today’s edition,
- Meta and investment in 2025
- India’s AI rise, powered by Reliance
- EV sales on the rise in the US
- Declining dependence on Saudi Oil
- Trump’s Bitcoin pivot
Market Snapshot
Major U.S. indexes ended the holiday-shortened week higher, with the S&P 500 closing at 6,101.24 (up 1.77%), the Nasdaq at 19,954.30 (up 1.52%), and the Dow Jones leading with a 2.57% gain at 44,424.25.
Growth stocks outperformed value, and large-cap indexes fared better than smaller-cap peers. Investors were reassured as President Trump refrained from imposing immediate tariffs, though he pledged 25% tariffs on Canada and Mexico starting February.
Optimism grew after Trump hinted at avoiding tariffs on China, fueling trade deal hopes. The announcement of the $500 billion Stargate AI infrastructure initiative by SoftBank, OpenAI, Oracle, and MGX further boosted sentiment, lifting AI-exposed stocks.
Economic data showed mixed results.
Manufacturing rebounded for the first time in six months, while December existing home sales rose 2.2%, ending the year on a high. However, annual sales hit a 30-year low due to high mortgage rates and record home prices. The week’s gains reflect optimism in trade and technology investments, but challenges like inflation and housing affordability remain key concerns for 2025.
Stock market closing data for the week of Jan 20th to Jan 24th, 2025
News Summaries
Meta Platforms plans to spend up to $65 billion on AI projects in 2025. This includes building a massive data center and expanding its AI teams. The budget exceeds Wall Street’s $51.3 billion estimate. CEO Mark Zuckerberg believes leading in AI is crucial for the next decade. By year-end, Meta aims to add a gigawatt of computing power and over 1.3 million GPUs. This will support AI infrastructure and products like assistants and smart glasses. While this mirrors trends like OpenAI’s $100 billion Stargate project, it carries risks. Overspending might strain margins, but underinvesting could mean falling behind in tech. The outcome of this gamble will be closely watched.
Reliance Group, led by Mukesh Ambani, plans a 3-gigawatt data center in Jamnagar. It could become the world’s largest by capacity. This move aligns with the global demand for AI infrastructure. Data center capacity is expected to triple to 219 gigawatts by 2030. Reliance aims to reduce AI inferencing costs and power the facility with renewable energy. Nearby solar, wind, and green hydrogen projects will support this. The $20-30 billion project would boost India’s sub-1-gigawatt capacity significantly. However, there are concerns about its reliance on fossil fuels for consistent power. If successful, India could emerge as a hub for AI services. Balancing scale, sustainability, and costs will be essential for long-term success. Readers should watch how Reliance’s strategy impacts AI economics and India’s global role.
In 2024, EVs and hybrids made up 20% of U.S. vehicle sales. This marks a significant increase from single-digit shares a decade ago. Over 3.2 million electrified vehicles were sold. This included 1.9 million hybrids and 1.3 million fully electric models. Internal combustion engine vehicles still dominate but fell below 80% of total sales for the first time. The U.S. market, though smaller than China’s, remains competitive. There are 68 EV models, with 24 showing year-over-year gains. The pandemic inflated expectations for rapid adoption, but growth has been steady. The challenge is balancing production with demand. Ensuring the shift to electrification is sustainable and attractive will be key.
U.S. imports of Saudi crude hit a 40-year low in 2024. They dropped to 277,000 barrels per day, over 85% lower than the 1.73 million peak in 2003. The U.S. shale boom and rising Canadian oil production drive this shift. Saudi Arabia has also priced its crude higher to deter U.S. buyers. This aligns with OPEC+ output cuts to manage global inventories. While Saudi oil’s grip on the U.S. weakens, it still influences global prices. The key question is how the energy landscape will redefine U.S.-Saudi relations and global markets in the future.
From the World of Crypto
President Donald Trump has instructed his administration to consider creating a “national digital asset stockpile.” This stops short of setting up a formal bitcoin reserve. The move aligns with his campaign promise to make the U.S. a leader in cryptocurrency. Supporters argue that a bitcoin reserve, like the gold reserves, could strengthen the dollar and boost U.S. financial power.
After the order, bitcoin prices briefly surged, but they fell back as traders realised its limited impact. Calls for a strategic bitcoin reserve have grown this year. Prominent voices like Sen. Cynthia Lummis and Coinbase CEO Brian Armstrong see bitcoin as the new “digital gold.” Critics, however, raise concerns about conflicts of interest. This comes after Trump and Melania Trump launched individual digital tokens, $TRUMP and another unnamed coin, which drew skepticism from the crypto community.
In the same order, Trump reversed Biden’s initiatives to research a U.S. central bank digital currency (CBDC). He cited risks to financial stability, privacy, and sovereignty. This decision shows the administration’s alignment with the crypto community, which largely opposes CBDCs.
While the directive marks a shift in U.S. crypto policy, its execution and implications remain unclear. Will a bitcoin reserve truly strengthen the U.S. dollar, or could it lead to financial instability? The outcome depends on balancing innovation, regulation, and transparency—key areas that will shape the crypto landscape and U.S. leadership in digital finance.
