Tech

Is There a Tech Bubble?

Fear of a Tech bubble looms for Threadneedle’s Ann Berry.

Threadneedle Ventures founder Ann Berry issued a warning to others, about a potential tech stock bubble that might be forming, during her visit on “Bloomberg Open Interest.” The concern comes following Meta’s plans to invest as much as $65 billion on projects related to AI in 2025 alone. 

“It’s the data that is missing around this that I fear is setting the tone for a bubble here,” Berry warned.

“When you’re in a board meeting, here is what usually happens… the board will sit there and say ‘what is the return on investment?’ ‘What is the yield you’re expecting from the dollars going into this?’ And I have yet to hear any of the big tech companies talk about what the dollar return on these investments is going to be. And I know they must be having these conversations… so that is what I’m concerned about.”

Berry said she would like to see the numbers and acknowledged that while Alphabet (Google’s parent company) has a great track record when it comes to clarification, discipline and talks about return, Meta doesn’t tend to provide the same. 

“When all the spending was going into the metaverse, we also then did not hear what the return numbers were going to be,” Berry mentioned, further explaining her concern around Meta.

The hosts also discussed how the new board members for Meta might not help either, as they could be too timid to ask the hard questions.

Berry also predicted that “for the non-AI tech companies, I think it can actually be a punitive earning season,” warning that eventually the europhoria train will run out. 

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Politics

CDC Communication Paused

The Trump Admin has paused communications from the CDC and other health agencies.

President Trump continues to make changes during his first week in office, including pausing public communications and canceling meetings for federal health agencies, as his administration assesses how to manage messaging.

Agencies, such as the Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC), were instructed to temporarily halt public messaging including advisories, scientific reports, website updates and even social media posts. Those instructions came from a senior official with the U.S. Department of Health and Human Services. The pause will last until February 1st.

In the memo, it was explained that documents and communications should not be shared until they have been “reviewed and approved by a presidential appointee.” This pause also extends to advisory boards that routinely meet to discuss emerging public health threats, leading to a canceled meeting for an advisory council combating antibiotic-resistant bacteria.

“This is a short pause to allow the new team to set up a process for review and prioritization,” the statement said. “There are exceptions for announcements that HHS divisions believe are mission critical, but they will be made on a case-by-case basis.”

In the meantime, state and city health departments are worried about how the communication pause might affect their communities. “Depending on how it plays out, it does threaten how critical health information reaches people making decisions in communities across the country,” explained Chrissie Juliano, executive director of the Big Cities Health Coalition.

Meanwhile, Trump also terminated Dr. Anthony Fauci’s security detail, which was being provided and paid for by the National Institutes of Health, on Thursday.

Given that he continues to face ongoing threats due to his role during the Covid-19 pandemic, Fauci has now hired his own private security that he’ll pay for himself.

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Business

9-Month Low For Business Activity

But somehow, hiring is up.

A tough start to 2025 as U.S. business activity slowed to a nine-month low amid rising price pressures. However, firms did report boosting hiring, which supports the Federal Reserve’s cautious approach to cutting interest rates this year.

S&P Global said on Friday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, declined to 52.4 this month, which is the lowest since April of last year. That number is down from 55.4 last month.

With President Trump re-entering the White House, there have been hopes of looser regulations, lower taxes and heightened protectionism in the manufacturing world. However, concerns remain over potential tariffs that would “disrupt supply chains and impact sales, or stoke inflation.” There are also fears that the U.S. central bank could adopt a more hawkish posture to help deal with inflation. 

With the uncertain economic impact of Trump’s trade and immigration policies, the Fed has scaled back its projected rate cuts for this year from four to two. It had previously estimated four cuts back in September when the policy easing cycle was launched.

“Although output growth slowed slightly in January, sustained confidence suggests that this slowdown might be short-lived,” explained Chris Williamson, chief business economist at S&P Global Market Intelligence. “Especially encouraging is the upturn in hiring that has been fueled by the improved business outlook, with jobs being created at a rate not seen for two-and-a-half years.”

Price increases picked up, with a gauge of average prices paid by businesses rising from 56 to 58.6. Unfortunately, those higher costs were passed on to the consumer, as a measure of prices charged by businesses increased from 52.1 to 53.8.

The increase suggests that inflation could remain high for some time.

However, the survey’s measure of employment did jump up to 53.7, the highest it has been in 2.5 years. That figure increased for the second straight month, after four months of declines. 

The rise in employment was mostly in the services industry.  

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U.S. News

New Fires in L.A.

Trump to visit LA wildfire zones after threats to withhold aid.

President Trump made his way to California on Friday to tour the damage that has been caused by the vicious Los Angeles wildfires. The visit comes during his ongoing feud with California Governor Gavin Newsom, as Trump disagrees with his handling of the disaster and federal aid.

Trump, who was accompanied by the first lady Melania, was greeted on the tarmac by a handshake from Newsome, as the two promised to work together and shared a cordial exchange. 

“We’re looking to get something completed, and the way you get it completed is to work together,” Trump explained. “He’s the governor of the state, and we’re going to get it completed. They’re going to need a lot of federal help. We’re going to take care of things.”

Newsome thanked Trump for being there, adding “we’re going to need your support. We’re going to need your help. You were there for us during COVID, I don’t forget that.”

Trump had previously said he would attach conditions to federal disaster aid, mandating changes in California’s water policies and forest management. “I don’t think we should give California anything until they let water flow down,” Trump had previously told Sean Hannity. 

California officials have pushed back on Trump’s assertion about water policy, amongst other things, as well.

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Economy

Home Sales Fell to 30-Year Low in 2024

What does that mean for 2025.

When it comes to the new year, let’s hope it turned the page on home sales, leaving the issues behind in 2024.

U.S. existing-home sales fell so far in 2024 that they hit their lowest level since 1995. It was the second straight year of decades-low sales, due to stubbornly high mortgage rates.

The average rate for a 30-year fixed mortgage has hovered between 6-8% since 2022, making it way too expensive for many Americans to buy homes, which hit record-high prices in 2024. Rising home insurance property tax costs, adding to the homeowners’ expenses, also did not help. 

The median price of an existing home has climbed now for 18 months straight, hitting the record-high price of $407,500 in 2024.

All of this data transpired even with the slight December sales bump of 2.2% for existing-homes.

Sadly, the housing market isn’t expected to improve too much for buyers in 2025, as mortgage rates are expected to remain above 6% through 2026. And the Fed is expected to only cut interest rates twice this year. Additionally, supply has been unable to keep up with demand, further driving prices up. There is currently a shortage of 3.7 million units.

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World News

North Koreans, Not Good at War

Intel says they’re being “slaughtered” while fighting for Russia.

According to a new Western intelligence assessment, North Korean forces (fighting for Russia) are suffering high losses, hurting their combat operations. Reportedly, nearly 4,000 North Korean soldiers have been killed or wounded.

North Korea deployed about 11,000 troops to Russia in the fall, to help battle Ukraine. Officials said that within just weeks, North Korea was already experiencing significant losses. As of mid-January, 1,000 of the soldiers have been killed, while another 3,000 have been wounded in combat. That’s nearly 40% of the troops originally sent to Russia.

These deaths and injuries have “almost certainly significantly deteriorated DPRK forces capacity to conduct offensive combat operations in Support of Russia’s attempts to push Ukrainian forces out of Kursk,” the defense ministry explained.

The losses for North Korea span a range of ranks, including some senior officers. Conflict analysts hypothesize that North Korea would lose all 11,000 troops they sent to Russia in a matter of months if the combat loss rate continues.

Despite claims that the North Korean soldiers were being treated as expendable, Ukrainian soldiers have described them as being highly skilled in combat.

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