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Home Depot, the leading U.S. home improvement retailer, has forecasted a lower-than-expected annual same-store sales growth for the upcoming fiscal year, citing a slowdown in spending on major home improvement projects. This forecast comes amidst a backdrop of a weak housing market and elevated borrowing costs, which have deterred customers from undertaking expensive renovations like kitchen and flooring upgrades. Instead, there has been a noticeable shift towards smaller, necessary repairs and maintenance activities. Despite these challenges, Home Depot reported a slight uptick in fourth-quarter same-store sales, driven by discounts that spurred discretionary purchases. However, this positive note was overshadowed by a 3% decline in customer visits during the same period. The company's shares experienced a dip in premarket trading, reflecting investor concerns over the cautious outlook, even though the stock had seen a 12% rise earlier in 2024. Home Depot anticipates a modest 1% growth in comparable sales for fiscal year 2025, falling short of the more optimistic projections by analysts.
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DeepSeek, a 20-month-old Chinese AI startup, has reopened access to its core programming interface after a nearly three-week suspension due to capacity issues. The company, which has gained significant attention for its AI platform that rivals OpenAI's offerings, announced the resumption of top-ups for its application programming interface. Despite the resumption, server resources remain strained during peak hours. This development coincides with Alibaba Group Holding Ltd. unveiling its new AI model, QwQ-Max, and committing to a $53 billion investment over three years to enhance its AI and cloud computing capabilities. Alibaba's move to open-source QwQ-Max further escalates competition within China's burgeoning AI industry. DeepSeek's platform has seen widespread adoption across various Chinese industries, although it faces restrictions from foreign governments due to security concerns. The company also plans to release key code and data to the public, a move that could intensify the AI development race between the US and China.
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Apple Inc. has announced plans to invest $500 billion in the U.S. over the next four years, including the establishment of a new 250,000-square-foot server manufacturing facility in Houston, Texas. This facility will produce servers for Apple Intelligence, the company's AI personal assistant for its devices. The factory is expected to start operations in 2026. Alongside this, Apple intends to create 20,000 new jobs, primarily in research and development, silicon engineering, software development, and AI and machine learning. CEO Tim Cook emphasized the company's commitment to American innovation. This investment comes amidst pressures from the Trump administration regarding Apple's manufacturing locations, with new tariffs on Chinese goods potentially affecting Apple's supply chain. Apple also plans to expand its U.S. operations through increased R&D spending, doubling its Advanced Manufacturing Fund, and creating a new manufacturing academy in Michigan.
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China's property market continues to face challenges, with new home prices remaining unchanged from December to January, according to official data released on Wednesday. Despite government interventions aimed at stabilizing the sector, the property market has yet to recover from the slump that began in 2021. The crisis was initially sparked by a government crackdown on property developers' high debt levels, leading to widespread financial difficulties among developers, including their inability to complete pre-sold housing projects. This has resulted in a significant drop in home sales and a general erosion of consumer confidence. Although there was a slight improvement in the year-on-year price decline, moving from a 5.3% drop in December to 5.0% in January, the market's recovery remains uncertain.
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Japan's exports in January saw a significant increase of 7.2% year-over-year, primarily fueled by a surge in car and ship exports, according to the Ministry of Finance. However, this growth was overshadowed by a 16.7% rise in imports, particularly in communication machinery and computers, leading to a trade deficit of ¥2.76 trillion ($18.2 billion), marking the largest deficit in two years. The increase in exports was largely influenced by a rush of demand before the implementation of new US tariffs announced by President Trump, which could affect automobiles, semiconductors, and pharmaceuticals. Exports to the US rose by 8.1%, but shipments to China and Europe declined. The looming trade war between the US and China, along with Trump's protectionist policies, adds uncertainty to Japan's trade environment. Japan, heavily reliant on trade with the US and China, is actively seeking exemptions from these tariffs to mitigate potential economic fallout. The weaker yen, while beneficial for exporters, poses challenges for domestic consumers due to higher import costs.
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U.S. President Donald Trump has announced his intention to impose significant tariffs on automobiles, semiconductors, and pharmaceuticals, aiming for rates around 25%. This move is part of his broader strategy to reshape global trade dynamics, following his earlier impositions of tariffs on steel, aluminum, and various imports from China, Mexico, and Canada. Trump's comments were made at his Mar-a-Lago estate, where he also mentioned that he expects major companies to soon announce new investments in the U.S. to circumvent these tariffs. The European Union, facing potential reciprocal tariffs, has been in discussions with U.S. officials, with EU trade chief Maros Sefcovic set to meet with key U.S. trade representatives. Despite Trump's claims, EU lawmakers have denied any agreement to lower tariffs on U.S. cars. This series of tariff threats and actions continues to create uncertainty in global trade, particularly affecting the automotive industry which has already experienced similar threats in the past without final action being taken.
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The Trump administration is set to reduce the workforce at the Federal Housing Administration (FHA) by at least 40%, impacting an agency crucial for providing mortgage insurance to those with lower credit scores or insufficient down payments. This move is part of a larger initiative to cut federal jobs, focusing on roles not explicitly required by law, including diversity and inclusion programs. Despite its financial health, with the FHA's Mutual Mortgage Insurance Fund growing significantly, the layoffs could disrupt its operations due to the interconnected nature of federal housing policy. The FHA, which has insured over 40 million home loans since its inception, plays a pivotal role in enabling homeownership for many Americans, particularly first-time and low-income buyers. The broader HUD, which includes the FHA, is also facing significant staff reductions, potentially affecting the FHA's ability to function effectively.
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President Donald Trump has issued an executive order aimed at increasing oversight of independent federal agencies such as the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and Federal Communications Commission (FCC). This order requires these agencies to submit draft regulations for White House review before publication and to align their strategic priorities with the Trump administration. While the Federal Reserve's monetary policy work remains exempt, its supervision and regulation of financial institutions will be subject to this new oversight. The move is part of Trump's broader effort to ensure these agencies are more accountable to presidential authority, arguing that previous administrations allowed these bodies to operate with too little supervision. Critics, including legal experts and former agency heads, suggest that this could lead to legal challenges, as these agencies were designed by Congress to maintain a degree of independence from political influence. The order reflects Trump's ongoing strategy to place loyalists in key positions and reduce the autonomy of regulatory bodies, potentially affecting their ability to act independently in the public interest.
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In a significant political upheaval in New York City, four of Mayor Eric Adams' deputies have resigned following the Justice Department's decision to dismiss corruption charges against him and his controversial cooperation with the Trump administration on immigration policies. The resignations come in the wake of Adams' meeting with White House border czar Tom Homan, where he agreed to provide Immigration and Customs Enforcement access to Rikers Island jail, a move that sparked allegations of a quid pro quo when the charges were dropped. Governor Kathy Hochul has responded by planning a meeting with key leaders to address the city's stability, emphasizing her concern for New York City's residents. Despite the allegations, Adams and his legal team have denied any wrongdoing, maintaining that the charges were politically motivated. The situation has not only led to a reshuffling within Adams' administration but also prompted resignations from the Justice Department, highlighting the contentious nature of the case and its implications for city governance.
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The White House has clarified that Elon Musk is not in charge of the Department of Government Efficiency (DOGE), despite earlier indications from President Trump and his administration that Musk was leading the initiative. According to an affidavit filed in federal court, Musk serves merely as a "senior adviser" without the formal authority to make government decisions. This statement comes in response to a lawsuit by several state attorneys general challenging the constitutionality of Musk's role, arguing that his appointment without Senate confirmation violates the Constitution's appointments clause. The lawsuit highlights contradictions in the administration's portrayal of Musk's involvement, especially given his active public updates and involvement in press conferences. The legal ambiguity surrounding DOGE's status as an agency further complicates the issue, with the Justice Department selectively applying agency status for certain legal benefits. Judge Tanya Chutkan, while not issuing a restraining order against DOGE, acknowledged the serious constitutional questions raised by the states regarding Musk's unchecked authority.
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In his opinion piece, Andrew Cote, founder of Hyperstition, argues for the adoption of energy-backed currencies as a means to drive economic growth and societal abundance. He critiques the current system where cryptocurrencies, despite their decentralized nature, essentially function as fiat currencies without intrinsic value. Cote highlights the historical precedent of the U.S. dollar being backed by gold, which was abandoned in 1971, leading to a disconnect between currency circulation and actual economic production. He proposes that backing currency with energy would align financial incentives with the production of energy, which is fundamental to all economic activities. This alignment would not only fuel economic growth but also guide capitalist markets towards maximizing returns in a way that benefits society by promoting energy production. Cote suggests that this approach would help humanity ascend the Kardashev scale, where civilizations are ranked based on their energy consumption, thereby ensuring wealth and material abundance. He concludes that energy-backed currencies could correct the flaws of fiat systems, which often lead to speculative bubbles and misallocation of resources, by directly linking currency value to the production of energy, the most critical commodity for economic expansion.
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Billionaire investor Bill Ackman's Pershing Square has made a revised offer to acquire 10 million newly issued shares of Howard Hughes Holdings (HHH) at $90 per share, which would give Pershing Square a 48% ownership in the real estate developer. Ackman plans to take on the roles of chairman and CEO, with the goal of transforming Howard Hughes into a diversified holding company akin to Warren Buffett's Berkshire Hathaway. This strategy involves acquiring controlling interests in both private and public companies that meet Pershing Square's stringent business quality criteria. This is Ackman's second attempt to buy into Howard Hughes, following an earlier proposal in January to purchase shares at a lower price. The announcement led to a volatile trading day for Howard Hughes' stock, with shares initially rising 6% but then dropping 4% in after-hours trading. Ackman has also likened his approach to Buffett's long-term, shareholder-focused investment strategy, and he plans to hold the stock indefinitely.
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Intel Corporation's stock experienced a significant boost, jumping 16% on Tuesday following reports that its competitors, Broadcom and TSMC, are exploring potential deals that could see Intel split into two separate entities. Broadcom is reportedly considering a bid for Intel's product business, which focuses on designing semiconductors for computers and servers, while TSMC has shown interest in controlling some or all of Intel's manufacturing facilities. Despite these preliminary talks, no formal deals have been presented to Intel. The news comes after Intel's stock had already seen a substantial weekly gain, marking its best performance since 2000, driven by U.S. government support for domestic chip manufacturing and turnaround efforts led by former CEO Pat Gelsinger. However, Intel's manufacturing division has faced challenges, with its foundry business struggling to attract external customers and continuing to incur losses. The potential split of Intel's business has been viewed by some analysts as a way to unlock value, though others express concerns about the complexity and regulatory hurdles involved.
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Deshawn "DJ" Chow, a 19-year-old with sickle cell disease, has been able to access a new gene therapy, Casgevy, thanks to his parents' employer-sponsored insurance covering most of the treatment costs. Sickle cell disease, which affects red blood cells, causes severe pain and frequent hospital visits, particularly among Black individuals. Despite the FDA approval of two gene therapies over a year ago, the rollout has been slow, with only a small number of patients treated due to the high costs and logistical challenges. The therapies, priced at over $2 million per patient, involve complex procedures including chemotherapy. Insurance coverage has been a learning curve for treatment centers, but processes are improving. However, the financial burden remains significant, prompting discussions on new payment models to distribute costs more evenly, especially for Medicaid programs where over half of sickle cell patients are covered. The Biden administration has introduced a payment model to help states manage these costs, but even with federal funding, the financial impact on state budgets could be substantial.
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Meta Platforms, Inc. experienced a significant drop in its stock price on Tuesday, ending a 20-session winning streak. Despite this, the company's stock has risen 17% over the last month and 22% year to date. Meta's CEO, Mark Zuckerberg, announced plans to invest heavily in AI data centers, with expenditures expected to reach $65 billion this year, a substantial increase from the previous year's $40 billion. This investment is part of Meta's strategy to enhance its advertising business and user engagement through AI technologies. The company's focus on AI has been paying off, with improvements in feed and video recommendations leading to increased time spent on its platforms. Additionally, Meta's open-source AI model, Llama, has been validated by AI startup DeepSeek, potentially opening new revenue streams through licensing. While other Big Tech companies like Google, Apple, and Microsoft struggle, Meta's targeted AI investments are seen as a key differentiator, driving investor confidence in the company's future growth.
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Elon Musk's Department of Government Efficiency (DOGE) has recently accessed highly sensitive data from the Social Security Administration (SSA), prompting a leadership change within the agency. This move has sparked concerns about privacy and the stability of the SSA, which manages benefits for over 72 million Americans. Critics, including Nancy Altman from Social Security Works, argue that Musk's team has unnecessary access to personal information like Social Security numbers and medical histories, which could be used to address fraud without such broad permissions. Musk's actions are part of his broader initiative to reform government agencies, focusing on what he claims are fraudulent Social Security payments, including allegations of payments to deceased individuals. However, these claims have been met with skepticism, with reports suggesting that the issues might stem from outdated computer systems rather than widespread fraud. The situation has led to legal challenges and public outcry, highlighting the tension between Musk's efficiency drive and the protection of personal data.
