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Nvidia: Drops $600 billion on threat from DeepSeek

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TODAY’S HEADLINE NEWS 👀

GM Braces And Has Plans For Trump’s Tariffs

General Motors isn’t hitting the panic button just yet. As President Trump threatens 25% tariffs on Canadian and Mexican imports starting February 1, GM executives are watching closely but holding off on major moves.

“We’re prepared but won’t act unless tariffs become permanent,” CFO Paul Jacobson said Monday.

Tariffs would hurt General Motors. GM produced nearly 900,000 vehicles in Mexico last year, including the Chevy Silverado and GMC Sierra, key profit drivers. CEO Mary Barra said the company could shift production back to U.S. plants or redirect trucks from Canada and Mexico to other markets if needed.

Despite challenges, GM’s North American operations remain a bright spot, driving nearly all of its $6 billion profit in 2024, down from $10.1 billion in 2023. EV production is growing but missed targets, with 189,000 units built versus a 200,000 goal.

Shares fell 10% Tuesday on tariff fears. Analysts warn trade policy could hurt demand and profits. GM, however, remains optimistic about its diverse vehicle lineup and plans to pay $14,500 bonuses to 46,000 UAW workers, a nod to its strong U.S. performance.

For now, GM is staying steady, ready to adapt as the political winds shift.

Vail Resorts Under Fire As Investors Demand Overhaul

Vail Resorts is facing heat. Late Apex Partners, its largest shareholder, blasted the company’s performance in a scathing letter, calling the last five years “unacceptable.”

The firm wants sweeping changes sush as the ousting of CEO Kirsten Lynch, CFO Angela Korch, and Executive Chairman Rob Katz, slashing the dividend by 80%, and hiring a proven leader. “Vail is fixable, but the board must act now,” Late Apex declared.

Vail’s struggles are mounting. Season pass sales are down. A ski patrol strike at Park City left customers fuming. Meanwhile, competitors multi resort passes are cutting into Vail’s Epic Pass dominance.

Shares rose 2% Monday to $170 but remain 23% lower this year and 54% off their 2021 peak. Vail hasn’t commented. Investors are waiting, and watching.

Smithfield Foods Faces Scrutiny Under Chinese Ownership

Smithfield Foods, under Chinese control for over a decade, is pitching itself as America’s pork powerhouse. But its future may hinge on U.S. - China trade relations, now at a crossroads under former President Trump’s policies.

The company returned to the U.S. stock market Tuesday, trading under the Nasdaq ticker SFD. Its IPO priced shares at $20, raising $522 million and valuing the pork giant at $8 billion.

Founded in 1936 in Virginia, Smithfield is America’s top pork processor and hog producer. But since WH Group, a Hong Kong based company, acquired it for $4.7 billion in 2013, critics have questioned foreign ownership of key U.S. agricultural assets.

Smithfield CEO Shane Smith insists the company remains deeply American, despite WH Group keeping a 90% stake. “We’re an American company, American management team, and made in America,” Smith said.

China has boosted Smithfield’s bottom line, with strong demand for parts Americans overlook, pigs’ heads and feet. WH Group’s know how even improved processing methods, fetching premium export prices. But trade tensions loom large, with potential tariffs threatening U.S. pork exports.

Meanwhile, lawmakers grow uneasy about Chinese control over U.S. farmland. Smithfield recently sold off 40,000 acres, reducing its holdings to 85,000 acres tiny compared to total U.S. farmland.

Facing pressure from excess hog supplies and immigration related wage hikes, Smithfield is turning to automation and plant upgrades. Packaged meats, already 58% of its sales, are a key growth area, offering steadier profits than raw pork.

With profits still strong despite industry challenges, Smithfield is banking on its U.S. roots and a revamped focus to keep its edge even as geopolitical crosswinds swirl.

THIS WEEK IN BUSINESS NEWS

Chip Stocks Dive China’s DeepSeek Shakes Up AI Race

Global chip stocks tumbled Monday after Chinese AI firm DeepSeek revealed it could build competitive AI models using lower grade chips. The announcement raises doubts about the massive spending on cutting edge hardware from Nvidia and other tech giants.

DeepSeek’s R1 model, rivaling OpenAI’s o1-mini, was trained with a fraction of the resources typically required. The company disclosed it spent $5.6 million training its model, compared to estimates of $100 million to $1 billion for similar U.S. models.

The news rattled markets. Nvidia shares plunged 15%, Micron dropped 10%, and AMD slid 6%. AI heavy Nasdaq shed over 3%, while power companies reliant on AI data centers also took hits, GE Vernova sank 20%, and Vistra fell 27%. European and Asian chipmakers weren’t spared, with ASML and Tokyo Electron losing billions in market value.

“DeepSeek’s success signals a threat to Western dominance in AI,” said AJ Bell’s Russ Mould. Investors fear lower cost AI models could upend the demand for advanced chips.

The announcement also underscores rising tensions in the U.S. China AI race. Despite U.S. export curbs on high end chips, DeepSeek’s achievements suggest the gap is narrowing.

“This could shift the economics of AI entirely,” said XTB’s Kathleen Brooks. “If China is catching up this fast, U.S. tech might lose its edge.”

With cheaper AI models emerging, the balance of power in tech is at stake, and Wall Street is feeling the tremors.

Canadian Pacific Kansas City Reach Deal Avert Strike

Canadian Pacific Kansas City (CPKC) struck a tentative four year deal with Unifor, avoiding a potential strike by 1,200 workers. The agreement follows a vote by most Unifor members in favor of walkouts if no deal was reached by Jan. 29.

Unifor, Canada’s largest private sector union, represents mechanics, laborers, diesel attendants, and support staff. CPKC will reveal details after ratification.

The timing is crucial as CPKC prepares to report fourth quarter earnings on Jan. 29. The company posted a 6% revenue rise to C$3.55 billion and C$837 million in profit last quarter.

Meanwhile, Canadian National Railway faces a strike threat from the International Brotherhood of Electrical Workers, which issued a 72 hour notice. CN downplayed the risk, stating, “Operations will continue seamlessly.”

CN recently finalized a similar four year deal with Unifor, granting 3% annual wage increases to over 3,000 rail workers. Last summer, a Teamsters led rail shutdown was resolved only after government intervention.

Canada’s railways remain a battleground for labor negotiations, with supply chains hanging in the balance.

Colombia A Nearshoring Haven Faces Trump’s Wrath

Colombia was quietly becoming a refuge for multinational brands seeking stability amid global turmoil. Nearshoring, the trend of moving production closer to the U.S., had fueled $7.6 billion in foreign investment since 2018. Over 40% came from American companies, drawn to Colombia’s proximity, skilled workforce, and logistical advantages.

Then Sunday happened.

President Trump, angered by Colombia’s refusal to accept U.S. deportation flights, announced 25% tariffs on Colombian imports. Hours later, a deal was struck, and Colombia would accept all deported immigrants, and the tariffs were "held in reserve." For now, trade continues, but the episode underscored the unpredictability of global commerce under Trump’s tariff heavy strategy.

MedSource Labs, a Minnesota based medical equipment firm, typifies the nearshoring trend. CEO Todd Fagley, a triathlete and veteran of supply chain battles, moved production to Colombia in 2022. Rising costs in China, pandemic disruptions, and volatile tariffs made Colombia’s Cartagena, a port city with a weeklong shipping time to the U.S., a strategic choice.

MedSource’s Cartagena factory, workers like Mariselis Pajaro, who once earned $100 a month sewing, now make three times as much. Her family built a brick home and escaped poverty’s grip. For Fagley, the costs of producing in Colombia are within 10% of China’s, but the resilience and proximity outweigh the difference.

Yet, as global tensions rise, droughts crippling the Panama Canal, and missiles closing the Suez, Trump’s unpredictable tariffs loom large. Still, Fagley remains pragmatic. “What matters most are patients and supply chain security,” he texted after Sunday’s showdown.

In an insecure world, Colombia offered stability. But under Trump, no trade route is entirely safe.

Bird Flu Drives Egg Prices Higher More Hikes Expected

Eggs are vanishing from shelves, prices are soaring.

In early January, shoppers in Ozark, Mo., were stunned to find empty shelves where egg cartons once sat. Across the U.S., grocery stores face shortages of this staple protein as bird flu ravages poultry farms.

Since 2022, the H5N1 virus has killed or infected 136 million birds. In the last three months alone, 30 million egg laying hens, 10% of the U.S. supply, were culled to stop the spread. Wholesale egg prices have skyrocketed, hitting $7 a dozen, up from $2.25 last fall.

Farmers are struggling. It takes months to rebuild flocks, and hatcheries can’t meet demand for chicks. Some orders may not be filled until 2026. Meanwhile, bakers and shoppers scramble, driving hours for deals or facing purchase limits.

The situation is dire. Industry experts warn it could take six months or more for the market to stabilize if the outbreaks stop. Vaccine efforts face hurdles, from mismatched strains to trade barriers.

Until then, empty shelves and rising costs are here to stay.

U.S. Home Sales In 2024 Lowest In 30 Years

U.S. existing home sales fell in 2024 to the lowest levels since 1995. High mortgage rates, between 6% and 8% since late 2022, priced out many buyers. Home prices, taxes, and insurance costs climbed, compounding the affordability crisis.

Sales dropped 0.7% to 4.06 million, marking the second consecutive year of historic lows. That’s a third fewer sales than the boom of 2021, when cheap loans fueled demand. Inventory remains tight as homeowners with low rates refuse to sell, pushing the median home price in December to $404,400, up 6% year over year.

“The market lacks momentum,” said Rick Palacios Jr. of John Burns Research & Consulting. “As long as mortgage rates hover at 7%, optimism is hard to find.” Rates briefly surpassed 7% last week, unsettling buyers and sellers alike.

Some, like Heather and David Baxter in Morgantown, W.Va., are moving forward despite the high rates. They locked in at 6.5%, betting on future refinancing opportunities. “If rates drop, we’ll refinance,” Heather said.

Experts predict slight improvement in 2025 as inventory grows. But for now, the housing market remains a tough sell.

LOS ANGELES FIRES

Now They Wait After Losing Their Homes To See Remains

SPORTS

NFL 2025 Super Bowl Is Set

The two teams to reach the Super Bowl are the Kansas City Chiefs and Philadelphia Eagles. Kansas City defeated the Buffalo Bills 32 to 23 and The Philadelphia defeated Washington Commanders 55 to 23. 🏈

Next up: Super Bowl LIX on Sunday February 9, 2025 

💰️ Smart Money Matters 💰️ 

Culture Corner

Bill Gates Wide Ranging Interview U.S. China And Regrets

Microsoft co-founder Bill Gates sat down with WSJ Editor in Chief Emma Tucker for a candid discussion about his life, philanthropy, and global issues.

Signs of Autism in Childhood
Gates reflected on his childhood, noting he likely would’ve been diagnosed as being on the autism spectrum today. While deeply focused on math and science, his parents worried about his social skills, sending him to therapy and the school where he met Microsoft co-founder Paul Allen.

Support for Spending Reform With Limits
Gates praised Trump’s Department of Government Efficiency (DOGE) initiative, led by Elon Musk, to reduce federal expenditures. However, he cautioned against cutting critical programs, particularly those funding global health efforts like HIV treatments.

On U.S.- China Relations
Gates emphasized the need for cooperation between the two superpowers to tackle global challenges like pandemics and climate change. He warned of a 10–15% chance of a natural pandemic in the next four years and said current preparedness is lacking.

Regret Over Epstein Ties
Gates called his meetings with Jeffrey Epstein a "huge mistake," admitting he was naïve to think it would help his philanthropic efforts. “In retrospect, I was foolish,” he said, adding he’s now more cautious about relationships.

Still Connected to Microsoft
Though focused on philanthropy, Gates maintains a close relationship with Microsoft and CEO Satya Nadella, spending 15% of his time on product reviews. Despite his tech background, Gates admitted he’s “not a big phone user,” much to his youngest daughter’s dismay.

With his memoir Source Code set for release next month, Gates offers new insights into his journey from childhood to building one of the world’s most influential companies.

ECONOMY

U. S. Agriculture On Edge Over Trump Tariff’s

Fed Pauses Rate Cuts Amid Inflation Risks and Trump’s Pressure

The Federal Reserve is hitting pause. After a year of steady rate cuts, Fed Chairman Jerome Powell announced the central bank will hold its ground, citing persistent inflation risks and no signs of a looming recession.

“We can afford to be patient,” Powell said as the Fed keeps rates at 4.25-4.5%, a shift from aggressive cuts earlier this year. The move comes amid rising inflation concerns, with the Consumer Price Index up 2.9% in December, its third consecutive increase.

President Trump isn’t pleased. Speaking at Davos, he demanded immediate rate cuts, tying his economic policies to lower oil prices. His calls for tariffs on major trading partners like Canada and Mexico further complicate the Fed’s strategy, as economists warn such policies could push inflation higher.

Despite political pressure, the Fed remains cautious. Former Cleveland Fed President Loretta Mester said, “There’s no compelling reason to cut,” with inflationary risks still looming large.

Traders expect two rate cuts this year, starting in June, but the bar is high. Powell and other officials will need clear evidence of cooling inflation and minimal fallout from Trump’s policies before acting.

For now, the Fed’s message is clear, and its patience over politics.

FINANCE

Corporate America Retreats from Tying DEI to Executive Pay

Big companies are scaling back diversity, equity, and inclusion (DEI) goals in executive compensation. Twenty nine S&P 500 firms dropped DEI from pay metrics in 2024, up from 20 last year, says advisory firm WTW. Meanwhile, only 26 companies added such goals, down sharply from 81.

The trend comes as conservative activists, energized by the 2023 Supreme Court ruling against affirmative action, push back on DEI. President Trump’s return has added pressure, with orders to dismantle DEI programs in federal agencies and scrutinize diversity policies at corporations.

Prudential Financial scrapped DEI linked incentives, citing progress in diversity since adding them in 2018. FirstEnergy reduced DEI’s weight in bonuses, prioritizing operational targets. Companies like Becton Dickinson and Accenture are shifting DEI goals from financial metrics to broader language or personal performance targets.

Still, 57% of S&P 500 firms tied executive pay to DEI in 2023, a slight dip from 58%. But with proxy season looming, more companies may drop these metrics entirely.

Costco, facing criticism from activists, defended its DEI linked bonuses, calling them integral to its business. Shareholders backed the stance, rejecting anti DEI proposals by 98%.

For now, many firms rethink DEI ties but maintain the commitment. “It’s not about abandoning DEI,” said Ryan Colucci of CAP. “It’s about managing it thoughtfully without unnecessary risk.”

POLITICS

Trump Wields Tariff’s As A Global Hammer 🔨

President Trump wasted no time flexing his trade war muscles. In his first week, he issued tariff threats to nations worldwide. Stop drugs, take back deportees, end wars, or pay the price.

His favorite weapon has been tariffs. Colombia was hit with a 25% tariff ultimatum for refusing deported migrants, which doubled to 50% in hours. By nightfall, Colombian President Gustavo Petro caved. Trump’s message was and still is comply, or suffer economic pain.

Trump also threatened Canada, Mexico, and China with tariffs unless they curbed drugs and migration. Even Denmark wasn’t spared, cede Greenland or face levies. Russia, end the Ukraine war, or else.

Critics call his moves unprecedented. “Tariffs could now be a tool for anything,” said trade lawyer Ted Murphy. Even free trade pacts offer no immunity, Trump leans on sweeping powers like the International Emergency Economic Powers Act to bypass the usual trade playbook.

Foreign leaders scramble to counter. Europe’s top diplomat, Kaja Kallas, urged unity, warning of Trump’s “transactional” policies.

Still, Trump’s tariffs aren’t just sticks, they’re statements. The Board is set, battles loom, and global trade braces for his hardball tactics, sans diplomacy.

THE GRIND FACTORY ⚙️

UNIQUELY INTERESTING

💡 Epiphany Moments

Starbucks began in 1971, as small shop in Seattle's Pike Place Market. Three friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker sold high quality coffee beans, tea, and spices. It became a local favorite, known for its focus on quality.

In 1982, Howard Schultz joined the company. A trip to Italy inspired him when he saw coffeehouses as gathering places and imagined Starbucks becoming more than just a seller of beans. By 1987, with investors’ help, Schultz bought the company and set his vision in motion.

Starbucks grew quickly, transforming into a coffeehouse chain. Espresso drinks, lattes, and cappuccinos became staples. Stores opened across the U.S., then the world. Starbucks became a global phenomenon with thousands of locations.

Innovation followed soon thereafter. New drinks, food, and mobile ordering kept customers coming back. Starbucks also embraced social responsibility, ethical sourcing, sustainability, and community engagement became part of its brand.

Today, Starbucks is more than coffee. It’s a cultural icon, a meeting place, and a symbol of modern life. Built on quality, customer experience, and constant evolution, Starbucks became a brand the world recognizes and loves.

 🍎 One Smart Apple

Sun Microsystems was born on February 24, 1982, the brainchild of four innovators, Scott McNealy, Vinod Khosla, Andy Bechtolsheim, and Bill Joy. The idea for the company came from Bechtolsheim’s project at Stanford University, where he built the Sun-1, a powerful workstation running Unix operating system with advanced graphics capabilities.

The name “Sun” stood for Stanford University Network, a nod to its academic origins. From its start Sun Microsystems made waves with groundbreaking ideas, carving out a niche in network computing. They pioneered technologies like the Java programming language and the Network File System (NFS), reshaping how systems communicated.

Sun’s rise was swift, and widely exposed in the business press. Their high performance workstations and servers became staples across industries, known for reliability and speed. By the early 2000s, the company had solidified its place as a tech titan.

All good stories have a good ending. In 2010, Oracle Corporation acquired Sun Microsystems for $7.4 billion, folding its legacy into Oracle’s operations. It was the culmination of decades of innovation that was born from collaboration and vision. 🍏 

 HEALTH & LONGEVITY •ᴗ• This Week For A Long Life

Want To Live To 100+ Luck And Genes Will Help But Lifestyle Rules

When 100 year old Helen Reichert lit a cigarette, she quipped that her doctors, who told her to quit, were all dead. And yet, she wasn’t. She lived nearly a decade longer, proving centenarians don’t always follow the rules. Don’t let her story fool you though because for most of us, lifestyle is the key to longevity. Cigarettes won’t help us live longer, frankly, its just the opposite.

To hit 80 or 90, healthy habits matter, eat well, exercise, sleep enough, manage stress, build relationships, and skip the smokes, opioids, and binge drinking. A study of U.S. veterans showed these behaviors could add 24 years, putting you in your 80s, a solid win, but not centenarian status.

Hitting 100, now that’s where genetics swoop in. Research shows your DNA takes the wheel past 90. Genes like APOE2 and FOXO3 can shield against diseases like Alzheimer’s and keep cells spry. Centenarians fate often come down to carrying these rare “lottery” genes, countering unhealthy habits that would sink the rest of us. And to test fate could prove fatal.

Still, these genes are rare, occurring in less than 1% of the population, and the same slim odds as making it to 100. So unless you’ve got a golden genetic ticket, stick to healthy living. For most, it’s the surest path to more candles on the cake 🎂 

And no, lighting one won’t help. Leave the cigarettes to Helen.

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