Good Morning! ‘Tis tariff szn: Trump plans to impose 25% tariffs on Mexico and Canada, and 10% on China starting February 1. Meanwhile, Netflix crushed earnings (again), with stock up 14% after-hours, and is hiking prices (again)—standard plans are jumping from $15.49 to $17.99.

Meta is wooing TikTok creators with $5k bonuses, and the DOJ sued Walgreens for "unlawful" opioid prescriptions. Goldman Sachs is sounding (and acting) a lot more like private equity and is also rolling out an AI assistant for its employees. Meanwhile, David Einhorn says we’ve reached the 'Fartcoin' phase of the market cycle.

Plus, booze brands are leaning on their heaviest drinkers, and Wall Street’s changing of the guard is here.

Invest in Elf Labs and claim 15% bonus shares—be part of the $2T entertainment revolution.

_{SQUEEZ OF THE DAY}

Largest AI Project in History

Yesterday, three of the biggest names in tech - OpenAI, SoftBank, and Oracle announced an up to $500 billion joint venture called Stargate. 

The project was unveiled by President Trump, who called it the "largest AI infrastructure project in history,” and it could be what the U.S. needs to dominate the AI arms race.

The joint venture between Sam Altman (OpenAI), Masayoshi Son (SoftBank), and Larry Ellison (Oracle) promises an initial $100 billion investment in AI infrastructure, plans to scale that investment up to $500 billion, and 100,000 new jobs.

Ellison said the group's first, 1 million-square foot data project is already under construction in Texas.

With demand for AI resources seemingly mooning (chips, electricity, water, and data centers), Altman calls Stargate the “most important project of this era.”

And Altman’s been pitching the investment as not just a tech play but a national security issue. Stargate’s hoping that Oracle, OpenAI, and SoftBank is the dream team that can go on offense and keep China’s expansion at bay.

SoftBank will bring the deep pockets to Stargate while OpenAI will handle operations. And Oracle is one of the largest data center operators in the U.S. OpenAI needs Oracle because Microsoft, its largest investor, cannot keep up with demand.

Takeaway: If Stargate delivers, it could reshape U.S. tech infrastructure and make “Made in America” the gold standard for AI, ushering in the golden age of America that Trump envisions. But with lofty expectations, faltering could put SoftBank, OpenAI, and Oracle’s reputations on the line. We’ll see how Stargate pans out - but Ellison, Son, and Altman are definitely aiming for the stars on this one.

_{PRESENTED BY ELF LABS}

Well Sh#%, Why Didn’t We Think Of That?

While the rest of us were idling by, tech-entertainment company Elf Labs was quietly scooping up rights to billion-dollar character IP like Cinderella, Little Mermaid, and Snow White. 

Now, it’s gearing up for the $2T entertainment and merchandising market with global partnerships for merchandise, TV and movies, AI and VR powered experiences, and more. 

• 100+ trademarks powered by 12 groundbreaking tech patents

• 20 new product lines in 30 markets over the next 18 months

• Revolutionary distribution model with massive consumer facing partnership (announcing soon) 

Hurry: Invest today to claim 15% bonus shares and take part in the future of entertainment.

_HEADLINES

Top Reads

• Trump plans to impose 25% tariffs on Mexico, Canada by Feb 1 (CNN)

• Trump considers 10% tariff on China from February (BBC)

• Netflix is raising prices after reporting its biggest-ever subscriber jump (CNN)

• Meta lures TikTok creators with $5K bonuses, content deals, free verification (TC)

• DOJ sues Walgreens for prescriptions that lacked legitimate medical purposes (CNBC)

• Goldman is sounding and acting a lot more like private equity (YF)

• Goldman rolls out an AI assistant for its employees (CNBC)

• Barron Trump is launching his own luxury real estate company (NYP)

• BofA CEO says financial industry will jump into crypto if regulators allow it (CNBC)

• JPMorgan’s Trump War Room pulls an all-nighter as companies digest first moves (YF)

• David Einhorn says we have reached the 'Fartcoin' stage of the market cycle (CNBC)

• Citi sees a deal boom emerging as U.S. firms go shopping in Europe (YF)

• Stripe lays off 300 employees (CNBC)

• Booze brands lean on heavy drinkers (WSJ)

• Wall Street’s changing of the guard is underway (Fortune)

_{CAPITAL PULSE}

Markets Rundown

Stocks Close Higher

U.S. equity markets rose on Tuesday, with the S&P 500 gaining 0.9% for its fifth daily advance in the last six sessions. Leadership was broad-based, led by industrials and real estate. 

Small-cap stocks outperformed, with the Russell 2000 gaining over 1.5%, signaling a risk-on tone. 

Global markets were mostly higher, with Asia up overnight and Europe closing higher. The U.S. Dollar Index fell over 1% after President Donald Trump opted against immediate across-the-board tariffs, though tariffs on Canada and Mexico  remain possible by February 1.

The 10-year Treasury yield fell to 4.56%, down from its recent peak of 4.8%.

Earnings in Focus

Corporate earnings are in the spotlight, with over 30 S&P 500 companies reporting this week.

Financial services companies continued to deliver strong results, with Charles Schwab beating fourth-quarter earnings estimates by 10%. So far, 10% of S&P 500 companies have reported, with earnings on pace to grow by 11% for the fourth quarter.

If achieved, 2024 earnings growth would be around 9%, the highest since 2021. Broad-based growth is expected to continue into 2025, with technology, health care, and industrials leading a projected 15% profit growth.

This positive outlook supports neutral positioning between growth- and value-style stocks.

Bond Yields Retreat

The 10-year U.S. Treasury yield has declined from its peak of 4.8% earlier this month, closing Tuesday at 4.56%. The drop follows encouraging inflation data, with December’s core CPI rising just 0.2%, the lowest monthly increase since July.

While inflation continues to trend lower, volatility is expected. This environment supports further Federal Reserve rate cuts, albeit at a slower pace than markets previously anticipated.

Movers & Shakers

• (+) Urban Outfitters ($URBN) +10% after Morgan Stanley upgraded the clothing retailer.

• (+) Roku ($ROKU) +5% after JPM initiated coverage on the streaming company with an outperform rating.

• (–) Apple ($AAPL) -3% after Jefferies downgraded the technology company.

Private Dealmaking

• Redwire acquired Edge Autonomy for $925 million

• Phantom, a crypto wallet business, raised $150 million

• Metropolis acquired Oosto for $125 million

• Instabase, an SF-based AI data startup, raised $100 million

• Fundment, a platform for financial advisers, raised $56 million

• Rhino.ai, a tech modernization company using AI, raised $50 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

The Purpose Code

Worried about purpose? Most people are. But no one has to be.

Brené Brown meets Malcolm Gladwell in this ground-breaking self-improvement book that reveals how to make a mark and how to set goals in life without falling into the anxiety traps of conventional success principles books.

The ultimate in purpose anxiety relief, and a map for anyone to find happiness.

Purpose can change your life.

Having a sense of purpose has been scientifically proven to help people find happiness, longevity, and health.

But lots of us are also worried about purpose―purpose anxiety has been estimated to affect as much as 91% of people.

What’s going on? And how do we do purpose the right way―to unlock all its many benefits, set goals in life, make a mark and journey from anxiety to legacy?

This question set hospice doctor and writer Jordan Grumet on a quest, and The Purpose Code shares his remarkable findings to help you change your future forever.

The result is a self-development book like no other.

“There’s nothing better than finding what you’re meant to do in life.”

_{DAILY VISUAL}

Euro Area Services Inflation Sticky at 4%

_{WHAT ELSE TO READ}

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Filled with market trends and insights that are relevant and impactful.

And it’s delivered straight to your inbox (will never ask you to tip), all in a short 5-minute read.

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_{DAILY ACUMEN}

Fitness vs Weight

Forget the scale—your fitness matters more than your weight when it comes to living a longer, healthier life.

A groundbreaking review in the British Journal of Sports Medicine reveals that aerobic fitness, measured by VO2 max (how efficiently your body uses oxygen), is a far more accurate predictor of longevity than body mass index (BMI).

The research, which analyzed nearly 400,000 people, found that unfit individuals faced a two- to three-fold higher risk of death—even if their BMI was "normal."

Meanwhile, fit individuals classified as obese had significantly lower mortality risks than their unfit, normal-weight peers. Experts emphasize that BMI is outdated, failing to account for muscle mass or where fat is stored.

On the other hand, VO2 max gets to the heart of the matter—literally—by reflecting how well your heart, lungs, and muscles work together.

The best part? Boosting your VO2 max isn’t reserved for elite athletes; regular aerobic exercise, like brisk walking or cycling, can make a huge difference.

So, stop obsessing over the scale and start focusing on fitness—it’s your ultimate ticket to a longer, healthier life.

_{ENLIGHTENMENT}

Short Squeez Picks

• Is HR really your friend?

• 4 productivity hacks that actually work

• How to regain momentum if you’re checked out at work

• 8 tips to build confidence

• How to craft an exit strategy at work

_{MEME-A-PALOOZA}

Memes of the Day