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DeepSeek Crashes AI Party
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DeepSeek Crashes AI Party

Tech stocks are selling off in force as investors scramble to assess what DeepSeek is, does, and how it might upset the existing order of things…

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, Jan. 27. Today’s Stocks On The Contrarian Radar©️ segment featuring AI chipmakers and big tech starts at the bottom of this page.

State of Play

Stocks dropped on Friday, with semiconductors seeing the worst of it on news of dramatic advances in China’s AI development. A foreshadowing, perhaps, as tech futures continue to drop overnight:

  • Stock index futures are dropping precipitously, led by the Nasdaq which is down 4%. S&P 500 futures are down 2.5%;

  • Cryptos are getting beat up as well. Bitcoin is down 5% to drop to ~$99,000;

  • Commodities aren’t doing much, though copper is down almost 1%, presumably because of the comparative energy efficiency of DeepSeek. WTI crude oil is unchanged, trading around $74.50/barrel;

  • Bonds are seeing some bids in a flight to safety. The 10-year yield is down 13 basis points to 4.50% (yields move inversely to prices).

(‘DeepSeek bullet train crashes AI party’ by author via Grok AI)

Today’s Known Events

It’s a massive week with earnings galore, the Fed meeting (and interest rate decision) on Wednesday and PCE Deflator on Friday. We also get a first look at fourth-quarter GDP.

For today, there is relatively little to distract us from the DeepSeek ‘Sputnik moment.’

The only other thing of note are earnings: Ryanair (RYAAY 0.00%↑) beat forecasts and that stock is rising in the pre-market. AT&T (T 0.00%↑) also beat forecasts and is up in the pre-market.

Sofi (SOFI 0.00%↑) is up later this morning.

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