Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of over 21,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

The Dow is the sole bright spot in the market this week as we have seen a bit of rotation into value stocks following the DeepSeek news.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Fed holds rates steady, takes less confident view on inflation

The Federal Reserve held interest rates steady at 4.25%-4.50% on Wednesday, pausing after three consecutive cuts since September 2024.

This decision, the first since Donald Trump’s return to the presidency, comes amid his calls for further rate reductions.

The Fed’s statement hinted at a more optimistic labor market outlook while removing prior language suggesting progress toward its 2% inflation goal. With inflation still "somewhat elevated" and the economy expanding at a solid pace, policymakers appear cautious about further easing.

Fed Chair Jerome Powell said that the central bank will need to see “real progress on inflation or some weakness in the labor market before we consider making adjustments.”

DeepSeek sets stage for frenetic tech earnings season

China's DeepSeek AI lab shook tech markets Monday with its reasoning model, R1, which outperformed OpenAI's latest model in many tests.

The startup, founded in 2023, previously launched a free, open-source LLM built in just two months for under $6 million, raising concerns about significantly cheaper AI models emerging faster than expected.

Skepticism remains, but DeepSeek's advancements sparked a market panic, causing Nvidia’s stock to plunge 17%, its steepest drop since March 2020, wiping out nearly $600 billion in market cap—the largest one-day loss for a U.S. company. Broadcom also fell 17%, while other AI-exposed companies like Oracle, Dell, Super Micro, and HPE saw sharp declines.

Megacap tech firms including Meta, Microsoft, and Tesla, which report earnings Wednesday, have invested heavily in Nvidia’s GPUs for AI development. Apple follows on Thursday, with Alphabet and Amazon next week. The focus for these companies is now shifting from AI-driven revenue growth to cost efficiency, particularly in light of DeepSeek's potential impact on AI infrastructure spending.

Earnings: Starbucks, General Motors, Lockheed Martin and more report results

Earnings season is off to a strong start. Here’s how some of the major companies that reported this week have performed:

Starbucks shares rose despite showing same-store sales slid for the fourth consecutive quarter, but the company’s quarterly earnings and revenue did beat estimates. Here are the key numbers from the report:

• Earnings per share: $0.69 vs. $0.67 expected

• Revenue: $9.40 billion vs. $9.32 billion expected

General Motors shares plunged despite beating earnings and revenue expectations and providing stronger than expected outlook. Here are the key numbers from the report:

• Earnings per share: $1.92 vs. $1.89 expected

• Revenue: $47.70 billion vs. $44.98 billion expected

SOFI Technologies shares fell despite beating earnings and revenue estimates as the company provided weaker than expected guidance. Here are the key numbers from the report:

• Earnings per share: $0.05 vs. $0.04 expected

• Revenue: $739.1 million vs. $674.1 million expected

Lockheed Martin shares dropped after missing estimates and providing guidance that was weaker than expected. Here are the key numbers from the report:

• Earnings per share: $2.22 vs. $6.62 expected

• Revenue: $18.62 billion vs. $18.87 billion expected

*Note - our full breakdown of these reports, as well as several others, will be sent out in Friday’s Earnings Recap.

In Other News

In this section we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

• Alibaba Rolls Out AI Model It Says Can Outperform DeepSeek's and OpenAI's

• Apple Gets Another Downgrade on iPhone Risk Ahead of Results

• ASML CEO makes case that DeepSeek is positive for chip demand

• Starbucks CEO says a turnaround is underway, with no timeline on the table

• Boeing stock rallies on plane progress despite $11.8-billion annual loss

• Frontier Airlines proposes merging with bankrupt Spirit — again. Spirit says no

• Mortgage demand drops further, even as interest rates settle

• AT&T Stock Jumps After Earnings Beat. What Impressed Wall Street.

• T-Mobile Shares Jump 9% on Subscriber Gains, Upbeat Outlook

• Oil Dips as Traders Look to Trump Tariff Fallout, OPEC Plans

The Second Half

Earnings season carries on as several major names are scheduled to report, while we get a few notable economic reports to end the week.

Earnings Reports

We have a busy next few days and there are 17 companies we cover that will be reporting earnings.

• Wednesday 1/29: Microsoft, Meta, Tesla, IBM, Lam Research, and Waste Management

• Thursday 1/30: Apple, Visa, Mastercard, Intel, Caterpillar, UPS, L3Harris, and Tractor Supply

• Friday 1/31: Exxon Mobil, Chevron, and AbbVie

Here is the calendar of earnings releases scheduled for the rest of the week:

Economic Reports

Earnings may get the headlines but Friday’s PCE inflation report will be closely watched by the market. We also get initial jobless claims, GDP data, and pending home sales to end the week.

Here is the full calendar of events scheduled for the remainder of the week:

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.