📈 Stocks / Finance

Investors Shift Focus to Undervalued Stocks

Morningstar

US stocks underperformed as core inflation rose to 3.3% and retail sales declined. The US Dollar fell 1.1%, boosting overseas returns, with China surging 12.7% YTD. A rotation into undervalued stocks is emerging, as lagging tech and consumer cyclicals signal shifting sentiment. Meta remains a standout performer.

Buffett Maintains Caution as Berkshire Trims Equity Holdings

Barron’s

Berkshire Hathaway remained a net seller of stocks in Q4 2024, offloading $6B in equities, with major reductions in Bank of America and Citigroup. Despite a record $310B in cash reserves, Buffett remains cautious, having cut Berkshire’s Apple stake by two-thirds last year, potentially leaving $35B in unrealized gains.

AI Reshaping the U.S. Labor Market

Phys

Harvard economists Deming and Summers analyzed 124 years of labor data, finding a recent shift in occupational churn driven by AI. Since 2019, STEM jobs surged nearly 50%, while low-wage service and retail jobs declined. Firms are making record AI investments, signaling structural workforce changes favoring high-skilled labor.

🪙 Crypto

Ether's Catch-Up Rally Precedes Market Dip

CoinDesk

ETH surged 7% to $2,850 before retreating, mirroring past patterns where brief gains preceded broader market declines. Bitcoin slipped below $96K as ETH futures open interest spiked 12%, outpacing BTC's 1% rise. Analysts remain split—some see a short-term rotation, while others suggest ETH may be bottoming against BTC.

🌎 Global Economy

European Defense Stocks Drive Record Market High

Investing

European stocks closed at a record high as defense stocks surged on expectations of increased military spending. The STOXX 600 rose 0.5% to 555.42, with aerospace and defense up 4.6%. Rheinmetall jumped 14%, BAE Systems 8.9%, and Thyssenkrupp 19.8%. Higher bond yields tempered gains, lifting banks but weighing on real estate.

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