5 Things You Need to Know to Start Your Day: Americas

Good morning. Tech leads a rally, the AI frenzy in chipmaking continues and Cisco is slashing jobs. Here’s what’s moving markets. — Sam Unst [View in browser]( [Bloomberg]( Good morning. Tech leads a rally, the AI frenzy in chipmaking continues and Cisco is slashing jobs. Here’s what’s moving markets. — [Sam Unsted]( Tech rally US stock futures [are edging higher]( following a bounce for the S&P 500 and the Nasdaq 100 on Wednesday, with the former finishing above the 5,000-point milestone again. That meant the bulk of the losses seen the day prior following the US inflation report were retraced, with the buoyancy driven by the familiar big-tech suspects. One of them, Nvidia, [overtook Google-owner Alphabet’s market value](, a day after it had topped Amazon. AI chip frenzy The unfettered positivity around AI-driven growth that has powered Nvidia’s rise also spread to one of its suppliers in Asia. Taiwan’s TSMC [added around $42 billion of market value]( on bets it’ll be one of the big winners from the AI frenzy. The surge pushed the local Taiwan benchmark to a record high and meant TSMC leapfrogged the capitalization of payments giant Visa. Nvidia itself is even tapping further into the AI story, [disclosing investments]( in chip designer ARM and in Soundhound, a maker of AI software for audio recognition. Burry’s bets Michael Burry has [added to bets on Chinese tech giants]( Alibaba and JD.com in recent months, even amid the deepening rout in Chinese stocks. Alibaba is now the top holding at Scion Asset Management, with JD.com second. Burry, the money manager made famous by The Big Short, [also bailed on a wager against chip firms]( like Nvidia and built positions across a variety of stocks in the health, software and banking sectors. In China’s battered market, meanwhile, some traders are taking a [“lottery ticket” bet]( that a recovery will eventually materialize. More job cuts Networking equipment giant Cisco said it [plans to cut thousands of jobs]( after its sales growth was wiped out by a slide in corporate tech spending. Its overall numbers fell far short of expectations, with customers delaying or reducing orders, and its move adds to the swathe of tech industry jobs which have been cut this year. And tech’s not alone, with Morgan Stanley said to be planning to trim [several hundred jobs from its wealth management arm](, following from the 3,000 it cut last year as a dealmaking drought and lower fees sharpened its focus on costs. Coming Up… There’s a slew of economic reports in the US today, though, to quote Joe Weisenthal, none are “top shelf.” Empire manufacturing, retail sales and jobless claims are all on the slate. That comes in the wake of worse-than-anticipated GDP readings [in the UK]( and in Japan, with the latter [unexpectedly slipping into recession](. The earnings calendar in the US is a little quieter, topped by agricultural machinery group Deere and with semiconductor equipment group Applied Materials due after the close. In Europe, Jeep and Ram maker Stellantis said it is prepping for a [difficult year ahead]( in the auto industry, with higher vehicle output to hit prices. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Deadly Super Bowl Parade shooting and Trump eyes NATO makeover on [the Daybreak podcast](. - [Luxury apartment rents]( start to dip in New York. - SpaceX’s [Nova-C lifts off](, headed for the moon. - The [wild 45-minute ride]( for a short seller on Lyft’s margin typo. - The [Hollywood formula]( for dating reality shows. - New York [sues social media platforms]( over teen mental health. - [Unpredictable power surges]( threaten the US electricity grid. And finally, here's what Joe’s interested in this morning Stocks got hit pretty hard on Tuesday after that hot CPI report. But the big indexes managed to erase a large chunk of their losses on Wednesday. It's impressive, given the fact that we're in a place right now where there's a huge question mark over when (or if?) rate cuts are going to come this year. The yield on the 2-year had gotten as low as 4.1441% in early January and as of the time I'm typing this, it’s back up above 4.56%. So on the one hand, Tuesday's hot inflation print may mean the Fed can't begin cutting just yet. But on the other hand it still looks like the economy has a surprising amount of momentum. Citi's Economic Surprise Index -- which measures the degree to which economic data is coming in relative to economic expectations -- has been almost a straight line up since mid-January. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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