As expected, the January FOMC meeting kept the interest rate unchanged and The Statement revealed there would not be any rate cut in March. Thus made the stock market came weaker. Just half an hour after the announcement, it’s the turn of press conference. A reporter took chance to ask the hottest topic of the market, that is requested Chairman Powell to say something on the NVDA, Deep Seek and AI incident. The Wiseman’s advice is heartily and practically useful.
AI is quite important today, but we better aim at macro-economics. That is something even more important than that which is the integral growth of the economy (GDP announcement of tonight). The writer makes further footnote is that Deep Seek is an important event, but just for a few days only, market will soon goes back to normal and we have to view all basic fundamental effect rather than on a single item.
On the supporting side, all 3 major indexes even closed weaker, but still above the long term yearly line which is 250-SMA, including the Magnificent Seven, DJIA, S&P and NASDAQ. The focus NVDA, even after a great drop is still above the 250-SMA. Fear & Greed Index is at 46 points, quite far away from 25 points of Extreme Fear zone and even above the Fear zone of 45 points, now in Neutral Zone. Take it easy! On the upper side, DJIA and S&P are all above the 5 major average lines and are going to break record high soon. NASDAQ followed closely. That is why I suggested to buy at low.
Deep Seek incident is really a warning and we have to view how US handles with such a warning and also the reaction of China. Deep Seek already got some improvement from the foundation of Chat GPT and we have to see how in turn improvement can get back Mind that Chat GPT is in another higher level and is going to be publicized soon.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.