Macro Theme of the Week
Labor Market Data Warm-Up & Fed Policy Expectations
This week’s macro focus centers on early signals from labor market data and shifting expectations for Federal Reserve policy, alongside heightened geopolitical uncertainty driving volatility in technology stocks. ADP showed December job gains of 41,000, below expectations of 47,000, while JOLTS openings fell to 7.146 million, suggesting emerging tightness in labor market conditions. Friday’s Nonfarm Payrolls report will be the key data point for confirmation.
Geopolitical Events Drive Market Sentiment
Geopolitical developments dominated sentiment this week. Reports of Venezuelan leader Maduro being arrested triggered volatility in oil prices, while restrictions on silver exports pushed silver prices up 18%, pressuring the solar and semiconductor manufacturing supply chains. CES 2026 (Jan 5–9) emerged as a major technology catalyst, with Nvidia and AMD keynotes highlighting AI robotics and energy-efficient computing. Memory stocks such as Micron surged as much as 10%. Meanwhile, the VIX climbed to 15, underscoring rising risk aversion amid concerns over escalating U.S.–China trade frictions.
Markets Enter the “January Effect”
Markets broadly entered the “January Effect,” with the S&P 500 gaining 0.6–1% and tech stocks leading. Semiconductor shortages and the AI boom lifted memory prices by roughly 40%, benefiting companies such as Western Digital. Comments from Barkin suggested continued policy caution, reinforcing U.S. dollar strength and adding pressure on tech valuations. Looking ahead to 2026, the market’s focus is shifting toward AI infrastructure, favoring allocations to storage and semiconductor ETFs, while closely monitoring BYD’s market share expansion in Europe.
Big Tech Performance Diverges
Big Tech stocks showed mixed performance this week. As of the Jan 8 close, over the past week:
$Apple(AAPL)$ −4.71%, $Microsoft(MSFT)$ −1.14%, $NVIDIA(NVDA)$ −0.78%, $Amazon.com(AMZN)$ +6.7%, $Alphabet(GOOG)$ +3.97%, $Meta Platforms, Inc.(META)$ −2.13%, $Tesla Motors(TSLA)$ −3.1%.
Core Weekly Strategy for Big Tech Portfolios
CES 2026: AI and Robotics Innovation Reinforce Long-Term Tech Growth
CES 2026 took place in Las Vegas from January 6–9, with media days starting January 4, quickly becoming a catalyst for tech stocks. Nvidia CEO Jensen Huang’s keynote focused on “Physical AI” and the robotics revolution, unveiling the Project GR00T robotics platform and the RTX 50-series GPUs. He emphasized the next phase of AI infrastructure, including a tenfold improvement in data-center efficiency. AMD CEO Lisa Su highlighted AI PCs and the Ryzen 9000X3D processors, aiming to extend AI computing to consumer devices. Intel announced initial shipments of its 18A-process products such as Panther Lake, optimized for AI edge computing. These announcements reinforced semiconductor supply-chain resilience and helped lift Nvidia, AMD, and Intel shares by 2–5% during the event.
From a longer-term industry perspective, these innovations signal AI’s transition from the cloud to the edge and the physical world. AI computing demand is expected to grow by over 30% in 2026, particularly in autonomous driving and robotics. Nvidia’s leadership position is further solidified; while its valuation remains elevated (forward P/E around 45x), its data-center revenue mix above 80% supports renewed upside after near-term volatility. AMD and Intel’s diversified AI chip strategies broaden ecosystem coverage and ease supply bottlenecks, though energy consumption and regulatory risks warrant attention. Overall, CES reinforced the growth narrative for semiconductor leaders within the Mag 7. Investors are advised to track downstream applications such as AWS and Azure capex plans to capture spillover effects. That said, AI bubble concerns persist—eye-catching announcements still require execution and time to materialize. Historically, CES boosts short-term trading activity, but long-term returns hinge on delivery.
Tesla Q4 Deliveries Miss Expectations: Short-Term Pressure, Robotaxi Optionality Intact
Tesla released its 2025 Q4 delivery figures on January 2, reporting 418,227 vehicles delivered, down 15–16% year over year and below the consensus estimate of 422,850. Full-year deliveries totaled 1.63 million units, an 8.5% decline and the steepest annual drop since the Model 3 launch. Production reached 434,358 units, slightly up sequentially, but inventory buildup and demand weakness were evident, especially in China and Europe amid competition from BYD and local EV makers. Shares fell about 4.6% on the news, though some analysts argue much of the downside is already priced in.
From a longer-term lens, Tesla’s valuation is increasingly anchored to AI and autonomous driving rather than pure EV sales. Its energy storage business posted record growth, FSD subscription penetration rose to 15%, and the Robotaxi project—expected to launch around mid-2026—could unlock a trillion-dollar opportunity. Historically, delivery volatility has accompanied transition phases (e.g., 2019–2020). The current inventory adjustment may pave the way for Cybertruck and Semi production ramps. Market expectations point to a rebound to 1.8–2.0 million deliveries in 2026, supported by new models such as Model 2 and continued tax incentives.
Despite near-term sentiment weakness, the current pullback may offer phased entry opportunities. Ongoing monitoring of Elon Musk’s execution and management focus, as well as geopolitical risks affecting valuation and delivery expectations, remains essential. Strategically, diversification and options hedging can help smooth volatility, with Robotaxi progress as the key medium-term catalyst.
AI-Driven Strength in Data Storage Stocks: Infrastructure Demand Creates New Growth Engines
Entering 2026, optimism around AI continues to build, driving a strong start for data storage stocks. As of January 7: Micron (MU) surged 239% in 2025 and is up 18.97% early in 2026; Western Digital (WDC) gained 282% in 2025 and is up 16% in 2026; Seagate (STX) rose 219% in 2025 and is up 11.94% so far this year. CES announcements from Nvidia and AMD underscored data-center expansion, highlighting storage as a critical component of AI training and inference. At scale, AI models require massive storage capacity, providing durable long-term support for the sector. Given the sharp near-term gains, phased positioning is recommended, while remaining alert to valuation pressures from potential supply-chain tightening.
Options Watch — Big Tech Strategies
Focus This Week: How to Position After Tesla’s Earnings Miss
Tesla is currently at a classic crossroads where short-term negatives appear largely priced in, technicals remain weak, and medium-term positives are still unverified. On one hand, fundamentals are under pressure: Q4 and full-year deliveries declined meaningfully, intensifying concerns over EV demand softness and competition. Recent price-cut headlines triggered a sharp opening drop of over 7%, pushing shares to new near-term lows and reinforcing bearish technical signals. Tesla’s lofty valuation—near 300x P/E—has also amplified perceived vulnerability.
On the other hand, the market continues to price in future optionality. Expectations are building around potential April updates on Robotaxi and other frontier technologies, which could serve as powerful valuation catalysts for a stock highly driven by sentiment and long-term narratives.
Against this backdrop, pure directional option bets carry elevated risk. More pragmatic approaches focus on volatility or defined-risk strategies. A bearish call spread, for example, may be suitable: selling a call near a key resistance level (such as the January 6 high around $448.25) to collect premium, while buying a higher-strike call to cap upside risk. This expresses a view that the stock is unlikely to break resistance, aiming to benefit from time decay as post-event volatility compresses.
For long-term bullish shareholders concerned about short-term swings, a covered call strategy can also be considered—selling out-of-the-money calls against an existing equity position to enhance income or partially hedge downside risk. Regardless of the strategy, the key is recognizing that the market is currently balancing a post-news vacuum with brewing expectations; risk control should take precedence over aggressive one-way bets.
Why Hold Big Tech? Why the “TANMAMG” Portfolio Consistently Outperforms
The “Magnificent Seven” combined into an equal-weighted portfolio (“TANMAMG”), rebalanced quarterly, has dramatically outperformed. Backtests since 2015 show a total return of 3,123.1%, versus 559.38% for the Nasdaq-100 ETF (QQQ), generating excess returns of 2,563.72% and remaining near historical highs.
Year to date, Big Tech performance has been largely range-bound, with returns of −0.17%, compared with QQQ’s +1.58%.
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