Transcript
0:00 Hey everybody, welcome back to the channel. We are back on another episode of the daily recap. Thank you everybody for being here. There is one thing to talk about today, just like there was only really one thing to talk about yesterday, which was the Trump Greenland 10% tariffs that ended up causing the worst day for the stock market since October 10th. 2% down in the S&P yesterday. Well, we recovered about 1.2% 2% today because we got the taco. Trump ended up saying today explicitly about five hours ago that uh he will not be imposing tariffs based on Greenland. We got the taco. I really thought it was going to last a little longer. Yesterday the entire message of the video was, "Hey, here's all the reasons to probably not sell out of stocks. Uh even if you think this thing is going to last long, but we should be prepared for it to last long." And then a day later, it's over.
0:50 Let's talk about it. Now, before we get started today, I just wanted to say I'm here to deliver you the news because apparently, as per the market close chat, uh I look like a UPS driver. So, I just want people to know that I'm here to deliver the stock market news to you every single day. Uh AI is being put to good use. You can see right here >> that I am uh delivering things to everybody. So yeah, I guess that's who I am and uh I I fully embrace being the delivery man hopefully of bullish news every day. There will be some days I have to deliver bad news, but hopefully hopefully bullish news. All right, so let's get started today with the news. I mean, this was one of the most important things that we had today happen at around 2:00 2:30 Eastern Standard Time. Here was the tweet by Mr.
1:45 Donald Trump. Based on a very productive meeting that I have had with the Secretary General of NATO, we have formed the framework of a future deal with respect to Greenland and in fact the entire Arctic region. This solution, if consummated, will be one of the great ones for the United States of America and all NATO nations based upon this understanding. I will not be imposing the tariffs that were scheduled to go into effect on February 1st. As soon as he said that, markets ended up reversing. It's not like we got a crazy Vshape, but we did get a decent Vshape.
2:10 I mean, things got pretty ugly today. Iran got to 49. Rocket Lab got almost below 80. Uh, Nvidia, I think, got to like 179 at one point. So, we got the Vshape from that. It's not like we broke out to new all-time highs, but we definitely weren't stuck in the sort of same lag that we were at early in the morning. Uh, the Golden Dome as it pertains to Greenland. Additional discussions are being held for it, and further information will be made available as discussions progress. Now, we don't have a lot of details exactly on what this framework of the Greenland deal looks like. Again, the number one reason I think Trump was interested in Greenland, which is what we talked about yesterday was uh Rare Earth Minerals being in Greenland. The New York Times reported after hours that it is likely based on conversations they've had with different officials that are close to the compromise of the deal that Trump is going to get, or I should say the United States is going to get certain parts of Greenland that we will have control and sovereignty over. Now, there's already parts of Greenland that the United States has I wouldn't say full and complete sovereignty over, but it's basically like we have sovereignty and control over it. In this situation, it's almost like Trump came out with his highest offer. I want the entire land, and I'm willing to tariff all of our allies until I get the entire land. And based on, you know, basic negotiation tactics, you're not going to get everything you want, but you're going to get something. And that something theoretically based on the concepts of a framework of deal, which is what Trump is talking about, are certain parts of the land. and those certain parts of the land, maybe they're rare earth heavy, maybe they're not. We don't really know.
3:33 Uh Trump didn't give us a lot of details on what this framework looks like, but he keeps stressing the importance of being able to have Greenland. And I mean, look, if he's going to end up getting certain parts of it that end up being the most important parts, I don't know what we're giving up for that. Again, we're not really sure what the compromise looks like. Denmark's prime minister came out today and said there's a lot more negotiating that has to be done in order to figure out what exactly the framework of the deal is going to look like. So, I don't even think a deal is necessarily set in stone, but there is a deal. And the question is simply become what does that deal look like?
4:04 Here's what Trump had to say about the concept of a deal. Earlier today, >> I mentioned that you you could have come over here and just talked about what you wanted to before you left. I think you wanted to talk about where the progress that you've made in terms domestically with the economy and everything else in the United and you didn't have to talk I didn't think you had to talk about Greenland but you're always moving on to the next thing.
4:27 >> In the speech I gave I talked a lot about Greenland because we need it for security and now we're going to have >> even better security I think than I would have had before. >> And it I know how you operate. I I know that you didn't take force off of the table, but all along I think if there was going to be a war, it was going to be a trade war. Is that fair to say?
4:46 >> I think so. You I don't think I I don't see us fighting with >> NATO fighting with >> you've done so much that to try to the strengthen NATO. I'm sure you don't want to see the dissolution of some work. >> It's I'm proud of NATO from the standpoint. Look, I brought them up from 2% to 5% of GDP. They're paying a lot of money. They pay us a lot of money because they buy missiles and they buy a lot of things. Unfortunately, Obama gave them $350 billion dollars for Ukraine, which was just terrible. I mean, it was the whole thing was terrible. Should have never happened. That's a war that should have never happened. But yeah, >> they paid a lot of money and uh I don't know if you know, but I signed a rare earth deal with Ukraine to probably get most of that back. Maybe more more back than we haven't. But what they did, they were just giving out money like >> cookies to a child.
5:36 >> I know how much you've done today. So, I'm going to bounce from thing that the market 600 points getting back a lot of of some of the nervousness we had in the last couple of days. The tariffs are off. Nothing happens on on February 1st. >> No, we took that off because it looks like we have pretty much the concept of a deal. >> A deal of of ownership. A deal. >> Well, it's a little bit complex, but we'll explain it down the line. But the secretary general of NATO and I and some other people were talking and it's the kind of a deal that I wanted to be able to make.
6:08 >> Where does Denmark did they weigh in on on what they want, what they would agree to? >> Well, I assume they did because he very much represents he's a strong leader. Mark, you know, Mark Muta >> and he uh I assume he's been speaking to them. He's been speaking to all of them. >> Are mineral rights involved? Is is ownership involved? Did the Golden Dome slay people? >> I don't want to say yet, but >> the Golden Dome was very compelling today when you talked about that.
6:34 >> Yeah. Yeah. The Golden Dome and they're going to be involved in the Golden Dome and they're going to be involved in mineral rights and so are we >> is you can't it's not specific enough to know at this point how long this lasts. How whether >> forever >> forever >> it'll be forever >> for for Greenland at this point. >> Forever. Now the question becomes for all of us as investors, what does this mean for the broader markets? Um, you know, quite frankly, I don't think it means much. It meant something when we thought or if we thought this was going to last for a long time and this was going to be one of those deals that was never going to come to fruition. It was going to be months of continuing to double down on this idea. But I think we've all been through this so many times, or at least, you know, the one main time that we all had to go through this was April of last year. And inevitably, we saw Trump pivot. And then after that, he had many other little hiccups and moments where he's like, I'm going to threaten China. I'm going to threaten the EU with 50% tariffs and Brazil. And then he walks them back. I mean, this is kind of the concept of the art of the deal. You go in heavy, create a lot of shock value. But ultimately, you shake up the system so much you increase the volatility index. The VIX was down 15% today. It was up 40% year date as of yesterday. Massively outperformed the S&P 500. And then you walk back the deal and try to get some type of compromise. So, the broader market is contingent on the Fed earnings and AI. That's been the story for a long time. I know you have people like Tom Lee that are out there that are saying we're going to get a 20% correction in the middle of the year. Look, I think it's possible that would put the S&P 500 at about 21 times earnings if you're assuming $275 of EPS for 2025. That right now we're at like 26 times earnings, which is definitely or 25 times earnings. It's a pretty aggressive multiple that we're trading at. 21 would be cheaper and that multiple would contract, but that also means the S&P 500 would go to 5500. We are at basically 6,900 right now. That's aggressive. That's very aggressive. Is that possible? Of course, anything is possible. It's just Google at 320 probably goes to Google at 200, right?
8:29 Like Amazon probably goes to 150. Micro Strategy probably goes to zero. That's a joke. But the point is Bitcoin, crypto, everything's going to be affected in a pretty nasty way. And I personally can't see that happening. I'm not saying it can't happen. It's just hard for me to see that happening. I can see 5%, 10%, 15%, but even 20% we're talking about a cataclysmic correction. We're talking about a correction that probably will be bought up quickly, probably will have a V-shape, but needs a catalyst. Is a recession a catalyst? Maybe, but the labor market's not showing us that right now. Is the lack of interest rate cuts a catalyst? Maybe. But we're going to get a pretty doubbish Fed soon. And even if we don't get a doubbish Fed, we're going to get at least one more cut, if not two, towards the end of the year. So, I don't think that's an issue. The credit markets could be an issue. We talked about Japanese bonds yesterday, and as they continue to go higher, that's not the best thing. you know, maybe the Trump geopolitical instability around Greenland calming down can get bond yields to come down. We're already seeing the 10-year relaxed just a little bit. So maybe that's not the biggest deal in the world. Um, and then the broader question becomes, is there some broader macro event that really shakes up the system like Liberation Day? And a lot of people thought the Greenland thing would be that and 5 days later it probably is not going to be that. So with Trump and the unpredictable nature of Trump, you just never know. But I think a 20% correction to the downside if it was influenced to start thinking that that would happen middle of the year not because of valuations compressing or because AI being fake or companies not living up to earnings which is very possible and hope and hopefully none of that stuff happens but it is a possibility but if it was based on this broader macro catalyst which is what happened last year. Last year was not about earnings. Earnings were amazing last year. Last year was not about the macro. Last year was about liberation day and and like a very specific tariff driven event that caused this. If we don't get that this time I wonder if we get that 20% correction.
10:10 Again, I'm not saying we're not going to get dips or corrections, but 20% just feels aggressive. So, what does this whole event change for us as investors? I kind of think you stay the course. I mean, yesterday the idea was to stay the core. Stay stay the course. And it seems like you're going to continue to stay the course because what else is there to do? Yes, you can sell some covered calls. Yes, you can take out your initial capital out of positions unless you can trend some trim some things. But getting out of the market and going net short has to be contingent on AI being fake, the Fed completely being against your side or Trump having one of those Trump moments that causes the market meltdown. And it doesn't seem like that's necessarily happening. So, it's a good thing that we got the pivot today from Trump. I don't know if the markets are necessarily going to care. We've had a massive high beta rally. Micron was up another 5% today. Sand is up 10%. I mean, here some of these valuations are getting pretty aggressive, even though Micron's relatively reasonable to be honest. Uh, but the momentum is very high. Does that momentum continue?
10:59 Rocket Lab finally taking a breather from 98 to 80. Now it's at 87. Like I don't know if we take a breather. I don't I I don't know if the thematics around drones, energy, nuclear, all that stuff continues to pull forward. But I do know that earnings growth is important. The Fed is important. And if we don't have this crazy Greenland thing or something like it happening, then there is a shot to continue this bull market. Now, what are some of the AI headlines that we had today? So, a couple things that I want to talk about that I thought were relatively interesting. Obviously, the Trump uh Greenland stuff was the biggest news. Uh at Davos, you had a variety of different um AI people come out and start talking about different things that are happening. Uh Anthropic CEO came out and said, "Hey, like we are focused on the enterprise. We're not focused on the consumer." That's a big deal because if we're focused on the enterprise versus the consumer, we're probably going to get more lock in from enterprises. We're probably going to be able to scale better. Open AI is focused on Sora and like making these AI slot videos, spending tens of billions of dollars on GPUs to make this AI generated content that there's no ROI on. We are actually integrating ourselves into the workflows that matter the most for uh the enterprise commercial and government.
12:05 And so that's a big deal. I think anthropic is having a very strong way to justify their valuation where a lot of people are questioning how OpenAI is justifying their valuation. AMD got upgraded today. That stock was up 7% at 250. Incredible. I know Nvidia is not catching the bid, but the fact that we're seeing some of these AI names get more momentum is very, very important, especially when a lot of those names have deals with companies like Anthropic uh and OpenA. On top of that, you had the OpenAI CFO come out and said, "Hey, uh we're not too concerned about the Elon Musk lawsuit." I haven't gone that deep into it, but based on what I've read, it's ugly. And if Elon wins, which um you know, maybe there's a 20% chance he wins, maybe the odds are more in Open Eyee's favor, but if he does win, Open Eye falls apart. So, I don't know if he's going to win, but the CFO kind of, you know, bris brisketed off as if it's not that big of a deal when in reality it's a very big deal. And you could tell she was speaking from a bit of a more defensive perspective. She was talking about advertising and chatb uh head of deep mind come out yesterday and saying, "I don't know why opens focus on on ads. Like, we didn't think they would focus on ads. Ads are not that important. Google doesn't have to worry about monetizing Gemini because they have their search business." Uh, Anthropic literally said, "We don't care about advertising. We don't care about the consumer's attention. and we care about actually building a better model, which is very important. Uh, and the OpenAI CFO, I don't think had the best response to being able to explain why they were so focused on the consumer.
13:20 The inevitable response is that they're not really winning in the enterprise. So, you've got a lot of different narratives around the AI trade continuing to hold up. Obviously, I want Open AI to win. You got another headline after hours, Sam Alman is potentially raising $50 billion at an $830 billion valuation from Middle Eastern investors. So, he's trying to get the money. That money is going to go into Nvidia and AMD and that's bullish but there needs to be an ROI on OpenAI that has done 20 billion in revenue anthropic to 10 billion in revenue but the quality of revenue one could argue is better at anthropic. Point is both of these companies need to win. Right now we're seeing you know some companies win in certain areas. Hopefully they both win but you're seeing anthropic really start to say this is what we're focused on.
13:58 This is how we're different from what OpenAI is doing. And that might be the reason why investors are getting excited about Anthropic. Those were pretty much the main AI headlines that we got today. uh you had some clips from Davos, from Jensen that I thought were important. I'll put that at the end of this video. But overall, uh Jensen continues to be incredibly bullish in terms of what's going on with AI. Same thing with all the other leaders uh and how they're navigating the prospects of AI. I think the most important thing today was, hey, can we get uh some level of resolution around Greenland? And and you know, Trump going to Davos, which is the first time a president's been to Davos since Bill Clinton, um it was a bit surprising, right? because he's going to speak to all the NATO allies that he just said he's going to put a tariff on it. It it kind of made sense that he was inevitably going to pivot from this. I didn't think it would happen this soon, but at Davos itself, where he came in as one of the the most hated men, quite frankly, by a lot of the European allies, he pivoted and said, "Nope, I'm not going to tariff you. I just want certain parts of Greenland." And so now the question is, will he get those parts? How will those parts play into the American strategy? What's the concept of how those parts can potentially make America more affordable if we're able to get more natural resources? Like, what is the resolution to this? I don't think it changes anything broadly around the strategy. If you had anything for 2026, it added a bit more volatility. That volatility might be dying down, but at the end of the day, the question is how good of a deal is this and if this deal will be meaningful long term. That's it for me.
15:20 Thank everybody for listening and watching. I'll put a couple of those Jensen clips at the end of this video that you can watch. The last clip is actually a really fun clip about his first Mercedes. It would ended up being the most expensive Mercedes ever. I'll see you guys back tomorrow on the market open in the daily recap. Thank you everybody. See you guys next time. >> President Trump wants to re-industrialize United States and AI is really a perfect time to do it because in order to do that, in order for AI, you have to build infrastructure. And that infrastructure includes chip factories, computer factories, and AI factories.
15:51 And we're building all three in the United States, partnering with TSMC. Nvidia's Blackwell is now produced in Arizona, manufactured in volume as we speak. And this only started just this year. So the rate at which this was being done. TSMC is a great strategic partner of Nvidia also of the United States and they built a fabulous factory in Arizona. Uh in uh in Texas we have Foxcon building a million square foot computer factory completely robotics. It's going to be really really advanced and so really grateful to have their partnership and of course we're building AI factories all over the United States.
16:27 This is creating just enormous number of jobs. The thing that's really important to recognize that this is the the largest infrastructure buildout in human history. >> Jensen, congratulations on that journey and I know we have many more years of that journey ahead of us. >> Thank you. I appreciate that. My only regret was at the IPO, after the IPO, I wanted to buy my parents something nice. And so I sold Nvidia stock at a valuation of $300 million.
17:01 Uh the company was at a valuation $300 million. And I bought them a Mercedes S-Class. It It is the most expensive car in the world. [laughter] >> They regret it. >> They still have it. >> Oh, sure. [laughter] Yeah, they still have it, you know.