Another day, another high! The S&P 500 wrapped up Thursday at 6,118.7, setting its first record close of the year. Health care and industrials carried the team to victory, while tech barely kept pace. Every sector stayed in the green, but let’s be real—this rally’s looking more like a group project where a few overachievers are doing all the work.

⚡ Closing Bell:

• Dow Jones: ⬆️ +0.9% › 44,565.1 › Strong gains in industrials.

• S&P 500: ⬆️ +0.5% › 6,118.7 › Record intraday and closing high.

• Nasdaq 100: ⬆️ +0.2% › 20,053.7 › Modest rise, tech underperformed.

• Russell 2000: ⬆️ +0.5% › Small caps followed broader markets upward.

Sector Moves:
✅ Health Care & Industrials: The day’s top performers.
❌ Tech & Communication Services: Lagged behind but still managed gains.

Economic Snapshot:

• Unemployment Claims: Applications rose more than expected, with continuing claims hitting their highest level since 2021—a potential warning sign for the labor market.

• Midwest Manufacturing: Growth remained stable but lost momentum, according to the Kansas City Fed, hinting at cooling demand and slowing industrial activity.

#TRUTH:
❗❗❗ “You’ve got to put the past behind you before you can move on.” ~ Forrest Gump

❗ What’s Coming Today?

Buckle up—it’s a data-packed day ahead:

• PMI Frenzy: We’ll get a fresh read on January’s Manufacturing, Services, and Composite PMIs from S&P Global. Traders, keep an eye on those numbers—they could set the tone for next week.

• Consumer Mood Check: The University of Michigan Consumer Sentiment report drops its final January reading (prior: 73.2). Will optimism hold, or are we due for a reality check?

• Housing Watch: December’s Existing Home Sales are expected to rise +1.2% (prior: +4.8%). Will higher mortgage rates cool the housing glow?

Earnings:

• American Express (AXP): Will cardholders keep swiping through higher interest rates?

• NextEra Energy (NEE): Investors will be watching renewable growth—does the “clean energy boom” narrative still hold water?

• Verizon (VZ): Postpaid subscriber numbers are key—can Verizon stay connected in a competitive market?

Our Take:
Friday’s numbers could be the spark or speed bump the markets need heading into the weekend. Stay sharp—this data might have the last word on how January ends.

Insatiable:

The rapid expansion of AI data centers is guzzling America’s energy and putting the brakes on the country’s progress toward clean energy, according to a new report from Frontier Group, US PIRG, and Environment America. With tech giants pouring billions into infrastructure, the numbers paint a sobering picture.

Power-Hungry Giants:

• In Virginia, home to a significant chunk of data centers, over 25% of the state’s total electricity in 2023 went to these facilities. For comparison, most other states allocated less than 1%.

• Forecasts for electricity demand growth by 2030 range wildly—from 29% to 166%—leaving states scrambling to plan for adequate supply.

Fossil Fuels Stick Around:
Surging demand has delayed the retirement of at least 17 fossil fuel plants across five states. Additionally, new plants with a capacity of over 10,800 MW are being planned, hampering efforts to transition to renewables.

Community Impacts:
The study highlights significant downsides for communities near these mega facilities, including:

• Massive water usage from data centers.

• Noise pollution impacting local areas.

• Energy cost spikes passed on to consumers.

Low Societal Returns:
The report calls for transparency from tech companies, mandates for on-site renewable energy, and ending subsidies for facilities with limited societal benefits.

Trump’s Take:
The administration’s focus, as outlined in the “Unleashing American Energy” executive order, is less about addressing these concerns and more about fast-tracking cheap energy production. This includes backing large AI projects like “Project Stargate,” the $500 billion joint venture between Oracle, OpenAI, SoftBank, and Nvidia.

The Bottom Line:
While AI infrastructure powers innovation, its energy demands are creating a sustainability paradox—fueling a reliance on fossil fuels at the expense of clean energy goals.

The Magic Word:

Bitcoin’s rally fizzled Thursday after President Trump’s new executive order on digital currencies failed to include a phrase the crypto crowd was waiting for: “strategic bitcoin reserve.”

Key Highlights:

• Clear Rules Incoming: A new presidential working group, led by crypto czar David Sacks, will craft a regulatory framework for crypto markets. First up? Reviewing existing regulations and submitting proposals within 60 days.

• No to CBDCs: The order bans central bank digital currencies (CBDCs), underscoring Trump’s support for decentralization and the broader crypto ethos.

The Fallout:

• Bitcoin (BTC): ⬇️ -2.5% › Dropped shortly after the 3:25 PM ET announcement, erasing earlier gains.

• The executive order promises to evaluate a digital asset stockpile but avoids mentioning bitcoin directly, leaving the decision to a yet-to-be-formed working group.

What Was Expected?
The crypto industry had hoped the order would include a strategic bitcoin reserve, a major campaign promise from Trump. Instead, the language is vague, and the new framework could just as easily dismiss the idea altogether.

Adding to the Uncertainty:

• Hours earlier, Senator Cynthia Lummis announced plans to chair a subcommittee on digital assets, specifically calling for a strategic bitcoin reserve.

• Meanwhile, Trump’s connection to crypto is raising eyebrows. His release of the $TRUMP memecoin just before inauguration has sparked concerns that he’s losing focus on the broader crypto agenda.

The Bigger Picture:
While the order is a departure from the previous administration’s hostility toward crypto, its lack of clear support for bitcoin has left the industry divided. With sentiment cooling, Trump’s status as a crypto darling could be slipping.

BATMMAAN:

While most of BATMMAAN (yes, that’s Big Tech shorthand) has started 2025 with gains, Apple (AAPL): $223.20 (-0.08%)⬇️ is bucking the trend. The iPhone maker’s stock has tumbled nearly 11% year-to-date, standing out in a sea of upward momentum.

What’s Weighing on Apple?
Investors’ concerns seem to fall into three main categories:

1. Slumping iPhone Sales: Demand is slipping, particularly in China, a key growth market.

2. AI Struggles: Apple’s push into AI, including Apple Intelligence, has failed to wow users compared to rivals.

3. Valuation Worries: At 29x P/E, Apple’s premium is looking steep versus the broader market’s 22x P/E, sparking questions about whether it’s still deserved.

The Contrast:
While Apple slides, peers like Nvidia (NVDA): $146.45 (+0.10%) are flying high—up more than 8% this year—thanks to AI-driven optimism. For now, Apple is feeling the weight of unmet expectations and stiffening competition.

Highlights of the Day:

① Winners in the Skies:

• Alaska Air Group (ALK): ⬆️ Beat Q4 estimates and offered a sunny forecast for 2025, fueled by plans for an ambitious overseas expansion.

• General Electric (GE): ⬆️ Delivered robust profit and sales, powered by its jet engine maintenance backlog and improved supply-chain navigation.

② Rails & Resources:

• Union Pacific (UNP): ⬆️ Better-than-expected Q4 earnings with a steady 2025 outlook, despite broader economic uncertainties.

• Freeport-McMoRan (FCX): ⬇️ Disappointed on copper sales projections, dimming the shine of an otherwise strong Q4 report.

③ Turbulence for Travel:

• American Airlines (AAL): ⬇️ Forecasted a surprise Q1 loss, as it struggles to regain corporate travel demand.

• Electronic Arts (EA): ⬇️ Bookings of $2.22B missed expectations due to weak holiday game sales, frustrating gamers and investors alike.

④ Health Care Relief:

• Elevance Health (ELV): ⬆️ Lower-than-expected medical costs helped the insurer meet profit expectations, easing investor concerns.MrBeast + TikTok?

In the other news:

Commodities Check: ✔️

• WTI Crude Oil: ⬇️ -0.5% › $75.43 per barrel

• Gold: ⬆️ +0.3% › $2,766.70 per ounce

• Silver: ⬇️ -0.3% › $31.39 per ounce
  

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Disclaimer

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