The Long Investor
patreon
The LIT Sunday News
🕑 Added 2025-02-23 19:45:08 +0000 UTCDonald Trump’s First Month in Office: Key Takeaways in Charts
Executive Orders: A Record-Breaking Pace
Major orders include:
The creation of the Department of Government Efficiency (Doge), unofficially linked to Elon Musk, which led to 10,000 federal job cuts (some challenged in court).
An attempt to challenge birthright citizenship, which has been blocked by judges.
Symbolic orders, such as one on “restoring freedom of speech”, criticizing Biden’s censorship policies.
Inflation Remains Stubborn
January inflation: 3% YoY, still above the Fed’s 2% target.
Egg prices surged 15.2% due to an avian flu outbreak.
62% of Americans say Trump has not done enough to lower everyday costs (CNN/SSRS poll).
53% disapprove of Trump’s economic handling—his highest dissatisfaction level.
Trade & Tariffs: Uncertainty but No Market Panic
Tariffs on steel and aluminum (25%) set to begin March 12, impacting manufacturers and energy firms.
Despite concerns from businesses, stock markets have remained stable.
Approval Ratings: Better but Still Divisive
Trump’s 49% approval rating is his highest ever, but still lower than Biden and previous presidents at this stage.
47% disapprove of his performance, reflecting deep divisions.
Immigration policies have public support, with 55% backing deportations or wanting them to go further.
Trump’s idea to “take over” Gaza was unpopular, with 58% calling it a bad idea.
Immigration Enforcement: A Mixed Start
ICE arrested nearly 1,000 undocumented immigrants in one day on January 26.
However, detentions dropped to 300 daily in early February, and at least 461 detainees were released due to space constraints.
Border crossings fell sharply in January, reaching their lowest level since February 2021 (29,000 arrests vs. 47,000 in December).
TL;DR
Trump’s first month in office has been aggressive, with record executive orders, new tariffs, and a focus on immigration enforcement. However, inflation remains a major challenge, economic dissatisfaction is high, and approval ratings remain divisive. While border crossings have decreased, ICE arrests have slowed, and some policies face legal roadblocks. Markets remain unfazed by tariffs, but businesses are wary of rising costs.
Markets Shrug Off ‘Doge’ Cuts, While European Defense Stocks Surge
Musk’s “Doge” and Its Market Impact
Despite legal and political pushback, investors see Doge’s cost-cutting efforts as a positive force for reducing the U.S. deficit.
Some analysts suggest Doge is supporting demand for U.S. Treasuries, helping stabilize broader financial markets.
JD Vance’s Comments Shake European Security Confidence
U.S. Vice President JD Vance’s remarks at the Munich Security Conference criticizing Europe’s defense strategy rattled global investors.
With Trump pushing for a negotiated Ukraine peace deal with Putin, European leaders scrambled for a response in Paris.
European defense stocks have surged, with Germany’s Rheinmetall up 50% in 2025 and 200% since early 2024.
Japan’s Quiet Economic Surge
Japan’s economy grew 2.8% annualized in Q4, far surpassing expectations of 1% growth.
Inflation data is due Friday, with projections around 4%, fueling expectations for a rate hike by the Bank of Japan.
Speculative long positions on the yen are at their highest level in decades as investors anticipate tighter monetary policy.
Market Uncertainty & Investor Sentiment
Confusion over Trump’s tariff policies leaves investors struggling to position ahead of regulatory shifts.
Uncertainty is driving market volatility, with businesses adopting a reactive rather than proactive stance.
Analysts warn that eroding confidence at the corporate and household level could hurt risk assets and economic stability.
TL;DR
Markets shrug off Musk’s ‘Doge’ cost-cutting, seeing it as deficit-friendly, while European defense stocks skyrocket amid geopolitical uncertainty. Japan’s unexpected economic boom fuels yen optimism, and investors remain on edge over Trump’s tariff strategy.
Consumer Sentiment Falls as Inflation and Economic Concerns Grow
Key Findings from the University of Michigan Report
Long-term inflation expectations rose to 3.5%, marking the largest month-over-month increase since May 2021.
The index of current conditions fell sharply from 75.1 in January to 65.7, signaling worsening personal financial outlooks.
Expectations for the future economy declined, dropping from 69.5 in January to 64.
Economic Concerns Weigh on Consumers
Retail sales softened in January, raising concerns about consumer spending strength in Q1.
Rising unemployment fears are further dampening confidence.
Buying conditions for durable goods plunged 19%, driven by fears of upcoming tariff-induced price increases.
Political Divide in Consumer Outlook
Republican consumers reported steady sentiment and lower inflation expectations, indicating partisan divides in economic perceptions.
Democratic and Independent consumers showed greater pessimism, likely reacting to concerns over Trump’s economic policies and inflation risks.
Market and Economic Outlook
Despite falling sentiment, economists expect consumers to keep spending, supported by a strong labor market.
Analysts warn that higher inflation expectations and policy uncertainty could weigh on economic growth.
TL;DR
Consumer confidence has fallen 10% in February, hitting its lowest level since late 2023, as inflation fears, tariff concerns, and unemployment risks grow. While spending remains resilient for now, rising economic uncertainty could dampen future growth.
Alibaba Shares Surge 14% Following Aggressive AI Investment Plans
Key Developments Impacting Alibaba
The company intends to spend more on cloud and AI infrastructure in the next three years than it has in the past decade, though specific investment figures were not disclosed.
Alibaba’s Q4 2024 revenue rose 8% to Rmb280bn ($39bn), marking its fastest growth in over a year, driven by strong performance in cloud and e-commerce.
AI and Cloud Expansion Driving Growth
Cloud revenue increased 13% to Rmb31.7bn ($4.4bn), reflecting growing demand for AI-powered computing.
The company is developing a deep reasoning AI model to compete with OpenAI and DeepSeek, positioning itself at the forefront of AI advancements in China.
Alibaba has been investing in AI start-ups such as Moonshot and 01.ai to gain a technical advantage over Baidu, ByteDance, and Huawei.
Market Reaction and Broader Implications
Alibaba’s stock has risen over 50% since the start of 2025, fueled by the AI rally and its partnership with Apple to integrate AI features into iPhones in China.
The company’s China commerce business grew 5% to Rmb136bn ($19bn), stabilizing after previous struggles, with international e-commerce surging 32% led by AliExpress.
The return of co-founder Jack Ma to a high-profile meeting with Xi Jinping signals Alibaba’s political rehabilitation, further boosting investor confidence.
TL;DR
Alibaba’s stock soared 14.6% as the company pledged massive AI investments over the next three years, focusing on cloud computing and artificial intelligence. Strong cloud revenue growth (+13%), a recovering domestic e-commerce business, and an AI-fueled rally have driven the stock up 50% year-to-date. The return of Jack Ma to China’s business elite adds to renewed optimism.
Kim Kardashian’s Skims Partnership Gives Nike a Much-Needed Boost
Nike Turns to Kardashian to Revive Its Brand
Skims, founded just five years ago, generates over $1B in annual revenue, making it a formidable player in the athleisure space.
The collaboration taps into the growing women’s sportswear market, a key area for consumer growth.
Nike’s Struggles and the Need for a Rebrand
Nike’s stock is down over 50% from its 2021 peak, with revenue declining 10% year-over-year in recent quarters.
The brand struggled under former CEO John Donahoe, who prioritized direct-to-consumer sales but failed to deliver a breakout product.
Nike lacks a "killer app" shoe, missing the cultural relevance it once had with Air Jordans and other iconic sneakers.
Kardashian’s Influence and Market Reaction
Kardashian’s 300M+ social media following is expected to drive consumer engagement and sales, shifting Nike’s approach toward influencer-driven marketing.
Following the NikeSkims announcement, Nike’s market cap jumped $6B, signaling investor optimism about the deal.
Challenges Ahead
Nike’s inventory issues persist, with $700M in unsold goods tying up cash flow.
Turnaround efforts will take time, as new product development and retail adjustments span multiple quarters.
TL;DR
Nike’s partnership with Kim Kardashian’s Skims signals a major strategic shift, embracing influencer-driven marketing to revive its struggling brand. While NikeSkims boosted investor confidence, the company still faces inventory problems and a lack of must-have products.
Hims & Hers Expands with At-Home Blood Draws and Peptide Innovations
Key Acquisitions for Expansion
The company also purchased a peptide manufacturing facility in California, aiming to expand peptide-based treatments in fitness, recovery, and preventative health.
These moves come as Hims & Hers positions itself as a lower-cost alternative to traditional health care providers.
Competing with Traditional Blood Testing Providers
The Trybe Labs acquisition puts Hims & Hers in direct competition with Labcorp and Quest Diagnostics.
New testing capabilities will include LDL cholesterol, lipoprotein(a), and apolipoprotein screening, supporting treatment plans for testosterone therapy and menopause care.
Users will receive Tasso+ blood lancet devices, which allow for easy at-home blood sample collection.
Peptide Therapy and Future Innovations
Peptide therapy has gained traction in wellness and fitness circles, though long-term scientific validation is still limited.
The acquisition aligns with U.S. efforts to shift pharmaceutical production away from overseas manufacturers, amid Trump administration policies.
Hims & Hers aims to lead in peptide-based treatments, with a focus on recovery, longevity, and alternative medicine.
AI-Powered Health Care Integration
Hims & Hers will use de-identified blood test data to improve its AI-driven health solutions.
This move aligns with the company’s goal of providing personalized, on-demand care through telehealth and digital diagnostics.
TL;DR
Hims & Hers acquires Trybe Labs for at-home blood testing and a California-based peptide facility to expand personalized health care and wellness offerings. The company challenges traditional lab testing services, invests in peptide-based medicine, and integrates AI-driven diagnostics, reinforcing its tech-driven health care model.
PayPal Struggles in Checkout Wars as Rivals Gain Ground
The Rise of the Checkout Button Wars
Checkout speed is key to ecommerce success, with payment delays leading to cart abandonment.
PayPal pioneered the one-click checkout button, but now faces stiff competition from Apple, Google, Shopify, and startups like Bolt.
Branded checkout accounts for 30% of PayPal’s transaction volume but 80% of its profits, making it crucial for the company’s financial health.
Competitive Pressures Impacting PayPal
PayPal’s branded checkout volume grew just 6% in 2024, disappointing Wall Street and leading to a 13% drop in its stock price after Q4 earnings.
Apple’s dominance in mobile payments gives it a natural edge as younger consumers opt for Apple Pay over PayPal.
Shopify’s Shop Pay is rapidly expanding, processing $27B in transactions in Q4 2024, a 50% YoY increase, stealing market share from PayPal.
PayPal’s Valuation Gap vs. Competitors
Shopify trades at 81x forward earnings, reflecting investor confidence in its growth.
PayPal, down 75% from its 2021 peak, trades at just 15x earnings, signaling concerns about stagnation.
Potential Solutions: Venmo Integration
Merging Venmo into PayPal’s branded business could boost engagement with younger users, helping fight off Apple and Shopify.
Venmo is popular with Millennials and Gen Z but faces competition from bank-backed Zelle.
TL;DR
PayPal is losing ground in the checkout button wars, with Apple Pay and Shopify’s Shop Pay gaining traction. Its stock price is down, and growth is lagging expectations. To stay competitive, integrating Venmo into its branded business could help attract younger mobile users and protect its core payments advantage.
iPhone 16e: Apple’s Testing Ground for In-House Modems
Apple Introduces Its First In-House Modem
The $599 iPhone 16e debuts Apple’s C1 cellular modem, reducing its reliance on Qualcomm.
Apple’s first 5G modem supports sub-6 GHz connectivity, promising improved integration within Apple’s ecosystem.
This mid-range iPhone serves as a testing ground for Apple to optimize and refine its modem before integrating it into flagship devices.
Challenges Against Qualcomm
Qualcomm’s modems are industry leaders, with extensive real-world testing by global telecom providers.
Apple faces a long road to match Qualcomm’s consistency and performance.
In-house modem technology could eventually expand to iPads, Apple Watch, and MacBooks.
iPhone 16e – Features and Market Positioning
Bridges the gap between the iPhone SE and flagship iPhone 16, with a price $200 lower than the iPhone 16 but $179 higher than the iPhone SE.
Features include:
A18 chip with Apple Intelligence
Brighter OLED display with Face ID
Action button and USB-C
Enhanced battery life and Fusion camera system
Free satellite messaging for two years
Targets legacy iPhone users (iPhone 11, 12, SE 2nd & 3rd gen) looking for a modern upgrade without flagship pricing.
Market Strategy & Global Launch
Preorders start Feb 21, with official release on Feb 28.
Apple lowers the barrier to entry for Apple Intelligence, competing with Google and OpenAI.
Can Apple’s C1 modem match Qualcomm’s performance? The 16e will provide valuable data before wider adoption.
TL;DR
Apple’s iPhone 16e debuts the company’s first in-house cellular modem, the C1, aiming to reduce Qualcomm dependence and optimize performance at scale before flagship adoption. With a strong feature set and competitive price, it’s targeting mid-range consumers and legacy iPhone users while expanding Apple Intelligence accessibility.
Microsoft Claims Quantum Computing Breakthrough with Elusive Majorana Particles
Key Developments in Microsoft’s Quantum Leap
The breakthrough could enable Microsoft to build a practical quantum computer by the end of the decade, leapfrogging competitors in the field.
The company unveiled Majorana 1, a processor featuring eight topological qubits, which promise higher error resistance compared to traditional quantum computing architectures.
Why Majorana Particles Matter
Traditional qubits are highly unstable, requiring thousands of error-correcting qubits for every functional one.
Microsoft’s topological qubits hold information across the entire qubit, reducing the number of error-correcting qubits needed to just 100 per operational qubit, a 10x improvement over existing quantum approaches.
This development could accelerate the timeline for scalable and commercially viable quantum computing, which many experts previously estimated was decades away.
Market and Industry Impact
The discovery places Microsoft ahead of Google, IBM, and PsiQuantum, all racing to achieve quantum supremacy.
The U.S. Defense Advanced Research Projects Agency (DARPA) selected Microsoft alongside PsiQuantum for a project to develop large-scale quantum computers, underscoring national security interest.
Microsoft’s research follows a history of setbacks, including a 2018 retracted study, but the new peer-reviewed paper in Nature adds credibility to its claims.
Skepticism and Future Challenges
Some experts caution that while Microsoft’s results are promising, there remains a small chance the findings could be explained by other phenomena.
Nvidia CEO Jensen Huang recently predicted that useful quantum computers were still 20 years away, contradicting Microsoft’s more optimistic timeline.
TL;DR
Microsoft claims a major breakthrough in quantum computing by successfully using Majorana particles to create more stable and efficient qubits. This could significantly accelerate quantum computing development, reducing error correction requirements by 90% compared to existing methods. Microsoft unveiled the Majorana 1 processor and secured a DARPA contract for large-scale quantum research, but skepticism remains about the feasibility of commercialization in the near term.
Palantir Stock Plummets Amid CEO’s Share Sales Plan and Pentagon Budget Cuts
Key Developments Impacting Palantir
The drop was compounded by a Washington Post report that Defense Secretary Pete Hegseth has ordered an 8% annual cut to the U.S. defense budget over the next five years.
Palantir relies heavily on defense contracts, making these budget cuts a direct threat to its future revenues.
Market Reaction and Financials
Palantir had been one of the best-performing stocks in the U.S. over the past two years, gaining nearly 50% in early 2025.
The company trades at a price-to-earnings ratio of nearly 600-to-1, raising concerns about valuation and growth sustainability.
In Q4 2024, Palantir reported $828 million in revenue with adjusted earnings of $0.14 per share.
Trump’s Budget Cuts and Musk’s Role in Government Downsizing
The Trump administration’s spending cuts are part of a broader initiative led by Elon Musk’s "Department of Government Efficiency" (DOGE).
Musk and Trump’s cost-cutting measures have faced legal challenges, adding uncertainty to the federal contracting landscape.
Karp Defends Musk Amid Controversy
Karp publicly supported Musk, arguing that progressives should engage in dialogue rather than criticizing his government restructuring efforts.
TL;DR
Palantir’s stock tumbled 12% following CEO Alex Karp’s share sale announcement and news of Pentagon budget cuts, which could significantly impact its defense contracts. The company’s high valuation and reliance on government spending make it vulnerable to Trump’s fiscal policies and Elon Musk’s government efficiency drive.
Japan Seeks Tesla Investment in Nissan Amid Fears of Foreign Takeover
Key Developments Impacting Nissan
Tesla’s potential interest lies in Nissan’s U.S. factories, which could help offset Trump’s new tariffs by boosting domestic production.
Foxconn remains a contender, having previously approached Nissan’s partner Renault about acquiring a stake.
Nissan shares surged 9.5% after reports of Tesla’s possible involvement, reaching an 11.5% intraday gain.
Market Reaction and Financials
Nissan’s U.S. factories in Tennessee and Mississippi operate below capacity, producing only 525,000 of their 1M vehicle capacity in 2024.
Moody’s downgraded Nissan to junk status, citing restructuring risks, an aging product lineup, and global trade tensions.
Nissan’s ongoing turnaround plan includes 9,000 job cuts and a 20% global production reduction to improve profitability.
Elon Musk’s Response and Tesla’s Stance
Musk downplayed Tesla’s interest, stating that its factory model is highly unique, making Nissan’s plants less attractive.
Former Tesla board member Hiro Mizuno, linked to the proposal, also denied involvement, casting doubt on the plan’s feasibility.
Foxconn’s Role and Japan’s National Security Concerns
Foxconn’s continued interest in Nissan has alarmed Japanese regulators, who worry about Chinese influence over Japan’s auto industry.
Japan’s Ministry of Economy, Trade, and Industry is concerned about blocking the deal, as Foxconn has been allowed to invest in other industries, such as semiconductors.
TL;DR
Japan is pushing Tesla to invest in struggling Nissan to prevent a foreign takeover, but Musk appears uninterested in acquiring Nissan’s U.S. plants. Foxconn’s interest raises national security concerns, while Nissan’s stock surged on speculation. Moody’s downgrade and restructuring plans signal ongoing financial challenges.
Nio’s Onvo to Launch Flagship L90 SUV in Q2 2025
Key Developments in Onvo’s Expansion
The L90 is a large three-row SUV designed for large families, marking Onvo’s flagship product.
The announcement was made by Onvo president Alan Ai in a live video stream with Sohu founder Charles Zhang.
Onvo’s SUV Lineup Strategy
The L90 follows the L60, Onvo’s first model, a mid-size five-seater SUV that launched in September 2024 with deliveries beginning later that month.
Nio’s CEO William Li previously confirmed that Onvo would introduce two SUVs in 2025:
A mid-to-large-size 6/7-seat SUV (now confirmed as the L90).
A large 5-seat SUV, expected later in the year.
The L90 is expected to compete with Li Auto’s L8 and L9 SUVs, key players in China’s premium electric SUV market.
Production and Market Impact
Reports indicate the model was previously rumored to be named the Onvo L80, with trial production already underway.
Onvo’s cumulative deliveries have reached 26,673 since September 2024, with 5,912 vehicles delivered in January 2025.
The launch of the L90 will further strengthen Nio’s presence in the high-end electric SUV segment, potentially challenging Li Auto’s dominance.
TL;DR
Nio’s Onvo sub-brand will unveil its flagship L90 SUV in Q2 2025, with a full market launch in Q3. The three-row electric SUV is designed for large families and will compete with Li Auto’s L8 and L9 models. Onvo has been expanding aggressively, with strong deliveries since launching its first model, the L60, in late 2024.
Comments
Som
Totally enjoyed the newsletter !!especially with so many topics that are super relevant to the charts that Cap has been sharing and commenting throughout the week.
Martechnic
Thanks. Nice summary!
MuaSer
thanks you CAP, your summery is not just for investing good also for my job
Cody
I really enjoy this newsletter. Concise and keeps us up to date on actual noteworthy US and world events tied in with finance news.
Sam
Great job overall! Thank you for doing this.
Chris H
Excellent summary as always vol!
Chris H
NIO: Have ONVOs deliveries been strong? It looked really soft in 2025 from insurance data. I’ll go take a look..
