What started as a rally quickly turned into a selloff after the White House confirmed Trump’s plan to enact tariffs on imports from Mexico, Canada (25%) and China (10%) starting February 1. The abrupt shift erased early gains and sent stocks tumbling into the weekend.

⚡ Closing Bell:

• Dow Jones ⬆️ –0.5% › 6,040.5 › Energy stocks led the decline.
• S&P 500 ⬆️ –0.8% › 44,544.7 › Trade-sensitive stocks took a hit.
• Nasdaq 100 ⬆️ –0.1% › 19,627.4 › Briefly turned positive before fading.
• Russell 2000 ⬆️ –0.9% › Small caps lost ground on trade fears..

The Tariff Effect:
Markets were pricing in a soft landing, but trade war risks are back. With higher import costs looming, investors are rethinking the outlook.

Sector Moves:

• ✅ Communication Services was the lone gainer.
• ❌ Energy stocks tanked, with tariffs on Canadian oil set to disrupt Midwest refineries.

Macro Moves:
➝ 10-Year Yield ⬆️ 4.55% › Trade jitters fueled a bond selloff.
➝ 2-Year Yield ⬆️ 4.21% › Rising as rate-cut bets fade.

❗ What’s next?
With tariffs set to kick in, the market’s focus shifts to how businesses—and the Fed—will react. If trade tensions escalate, expect more volatility ahead.

#TRUTH:
❗❗❗ “In the middle of difficulty lies opportunity.” ~ Albert Einstein

Tariff Target: Everything (Except Oil)

From cars to coffee, machinery to maple syrup—Trump’s proposed 25% tariffs on goods from Canada and Mexico are set to hit nearly everything. The exception? Oil and energy products, which are likely to be spared given their critical role in the U.S. economy.

By the Numbers:
Data from the U.S. International Trade Commission (USITC) shows that in 2023, the U.S. imported $892 billion worth of goods from its northern and southern neighbors. The top categories?
› Vehicles (brace for impact)
› Machinery
› Food & Raw Materials
› (Oil & petroleum? Off the hook—at least for now)

If these tariffs go live, automakers, manufacturers, and even grocery aisles could feel the squeeze.

Mapped Out:

The New Tesla?

Palantir Technologies (PLTR) is on track for a record high, closing in at $82.58 (+1.55%) ahead of its earnings report on Monday. But what’s driving the surge—optimism around financials or the company’s deep political ties? Maybe both.

By the Numbers:

➝ 2023’s Best Performer: Stock soared 340.5% last year, outpacing the entire S&P 500.
➝ Sky-High Valuation:

• Price-to-Sales: Over 50x
• Forward P/E Ratio: A staggering 180x

These numbers make traditional valuation models look outdated—or irrelevant.

Déjà Vu:

Palantir’s rally has shades of Tesla’s rise—both defying fundamentals and leaving Wall Street analysts scratching their heads. For Tesla, it wasn’t just about cars. Elon Musk’s political ties added fuel to the fire, with investor confidence growing alongside his proximity to power.

Now, Peter Thiel, Palantir’s co-founder and major shareholder, seems to be following a similar playbook. And since November 4 (pre-election), Palantir has doubled. Coincidence? Unlikely.

Palantir’s biggest customer is the U.S. government. That’s not just a contract; it’s a strategic moat.

What’s Next? All eyes on Monday’s earnings.

Crypto Bet (By Accident):

🇳🇴 Norway’s sovereign wealth fund—officially the world’s largest—has unintentionally become a major bitcoin holder, thanks to its investments in companies deep into the crypto game.

While firms like MicroStrategy (MSTR $334.53, -1.74%) and MARA Holdings (MARA $18.27, -4.43%) continue their BTC stockpiling spree, Norway’s Government Pension Fund Global is along for the ride—without directly buying a single satoshi.

How Big?
The fund now indirectly holds 3,821 BTC, up 1,375 BTC since June 2024—a 153% jump compared to its 2023 stash. That’s all through exposure to crypto-heavy companies like:
› MicroStrategy – $514M
› MARA Holdings – $46M
› Coinbase (COIN $289.92, -3.31%) – $530M in stock, $2.4M in bonds
› Block – $616M
› Tesla (TSLA $402.02, +1.07%) – $14B (yep, Tesla’s still riding the BTC wave)

🤔 But Here’s the Twist:
Despite the growing BTC exposure, Norway’s fund quietly reduced its MicroStrategy stake in late 2024. So, are they secretly bearish on bitcoin? Or just rebalancing? Either way, Norway’s crypto footprint keeps growing—even if it’s by accident.

Highlights of the Day:

① Dividend Drama ❌
➝ Walgreens (WBA -10.3%) › Suspended its quarterly dividend for the first time since 1933, citing legal troubles and massive debt.
Private Equity Buzz › Rumors of acquisition interest couldn’t stop the stock slide.

② Tariff Whiplash ❌
➝ General Motors (GM -0.08%) › Fluctuated as mixed signals on Trump’s 25% tariffs kept traders guessing.
➝ Constellation Brands (STZ -1.88%) › Hit by tariff fears tied to its Mexican-made beverages.

③ Big Tech’s Price Tags ✅
➝ Amazon (AMZN +1.26%) › $16B Mississippi data center project revealed, up from $10B.
➝ Meta (META +0.32%) › Considering a corporate move from Delaware to Texas while selling over 1M Ray-Ban smart glasses in 2024.

④ AI Turf Wars ✅
➝ Atlassian (TEAM +14.98%) › Earnings crushed expectations, thanks to AI-driven growth.
➝ OpenAI vs. DeepSeek › OpenAI rushed out its o3-mini model to compete with rising Chinese AI rival.

⑤ Pharma Gains ✅
➝ AbbVie (ABBV +4.15%) › Surged on strong earnings and bullish 2025 guidance.
➝ Vertex (VRTX +5.31%) › Jumped after FDA approval of its new non-opioid painkiller, Journavx.

⑥ TikTok Resilience ✅
➝ TikTok › Despite U.S. app store bans, traffic bounced back to 90% of pre-ban levels.
➝ Meta & Snap (SNAP -0.66%) › Minor gains despite efforts to capitalize on TikTok’s troubles.

Commodities Check : ✔️

Note: Prices as of January 31, 2025.

• WTI Crude ⬇️ -0.5% › $72.50 per barrel › Declined amid concerns over weak demand and supply glut.
• Gold ⬆️ +2.0% › $2,800.00 per ounce › Hit record highs as investors seek safe havens amid tariff uncertainties.
• Silver ⬆️ +1.5% › $32.00 per ounce › Benefited from increased demand for precious metals as safe-haven assets.

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The stinger

Disclaimer

This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills.