Moe’s Market Memo

By Hightower St. Louis on January 31, 2025

Weekly data-driven insights on the markets and economy

Fifth Week of January

Fed decision rocks market

Stocks slid on Wednesday after the Federal Reserve left interest rates unchanged in its first policy decision of the year. The S&P 500 traded 0.8% lower, the Nasdaq lost 1.1%, and the Dow Jones dipped 0.4%. Nvidia shares tumbled 6% following reports that Trump administration officials discussed curbing chip sales to China. For the week, Nvidia is down more than 14%.[i]

Fed holds firm

The Fed held its key interest rate steady on Wednesday, reversing a recent trend of easing policy. The Federal Open Market Committee left the overnight borrowing rate unchanged at 4.25%-4.5%, following three consecutive cuts since September 2024. This decision comes amid a volatile political backdrop with President Donald Trump advocating for immediate rate cuts. The Fed’s statement highlighted a stable labor market and persistent inflation, suggesting less incentive to ease policy further.[ii]

X and Visa launch partnership

Elon Musk’s social media platform X announced on Tuesday the launch of a digital wallet and peer-to-peer payments service in partnership with Visa. The X Money Account will enable users to move funds between traditional bank accounts and their digital wallet and make instant peer-to-peer payments. This marks X’s first step towards creating a financial ecosystem for the platform, expected to launch in the first quarter.[iii]

Tech takes a tumble

Nvidia and other U.S. tech firms experienced a significant plunge on Monday, driven by concerns over competitiveness in AI sparked by Chinese startup DeepSeek. Nvidia, a major AI player, saw its stock slide nearly 17%, marking its worst day since March 2020. This decline also impacted other AI-related stocks and the broader U.S. market. DeepSeek’s recent advancements in AI models have raised alarms about the U.S.’s leadership in the sector and the substantial investments by big tech companies.[iv]

Millennials’ ‘phantom wealth’ phenomenon

Millennials have come a long way from being labeled “lazy” or “entitled.” Despite reaching milestones later than their parents, they are now wealthier than previous generations at their age, with a collective worth of $15.95 trillion, up from $3.94 trillion five years ago. However, many millennials still don’t feel wealthy due to “phantom wealth,” where gains in home or retirement plan values don’t translate to day-to-day cash flow.[v]

The big game’s big prices

There’s good news and bad news about Super Bowl 59 ticket prices. The good news? They’re cheaper than last year. The bad news? They still cost thousands of dollars. On Monday, the average ticket price was $8,076, down 14% from last year, but it still costs more than $5,000 to get into Caesars Superdome. This year’s game, featuring the Philadelphia Eagles and Kansas City Chiefs, takes place on February 9, with halftime performances by Kendrick Lamar and SZA. ^[vi]

Mohammad Abouchleih, MBA, CIMA®

Investment Analyst

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[i] Kailai Han, Lisa. “Stocks fall as Fed pauses rate-cutting campaign, warns about inflation: Live updates.” CNBC, 29 Jan. 2025, https://www.cnbc.com/2025/01/29/stock-market-today-live-updates.html. Accessed January 29, 2025.

[ii] Cox, Jeff. “Fed holds rates steady, takes less confident view on inflation.” CNBC, 29 Jan. 2025, https://www.cnbc.com/2025/01/29/fed-rate-decision-january-2025.html. Accessed January 29, 2025.

[iii] Son, Hugh and Sigalos, MacKenzie. “Elon Musk’s X begins its push into financial services with Visa deal.” CNBC, 28 Jan. 2025, https://www.cnbc.com/2025/01/28/elon-musk-x-visa-digital-wallet.html. Accessed January 28, 2025.

[iv] Reid, Jenni. “Nvidia drops nearly 17% as China’s cheaper AI model DeepSeek sparks global tech sell-off.” CNBC, 27 Jan. 2025, https://www.cnbc.com/2025/01/27/nvidia-falls-10percent-in-premarket-trading-as-chinas-deepseek-triggers-global-tech-sell-off.html. Accessed January 28, 2025.

[v] Dickler, Jessica. “Net worth of millennials has quadrupled: Why some call it ‘phantom wealth’.” CNBC, 27 Jan. 2025, https://www.cnbc.com/2025/01/27/net-worth-of-millennials-has-jumped-why-some-call-it-phantom-wealth.html. Accessed January 28, 2025.

[vi] Mendoza, Jordan. “Super Bowl 2025 tickets aren’t as expensive as last year: What Super Bowl 59 costs.” USA Today, 27 Jan. 2025, https://www.usatoday.com/story/sports/nfl/super-bowl/2025/01/27/super-bowl-59-ticket-prices-trends-when-to-buy/77977122007/. Accessed January 28, 2025.