Five Point Holdings Up 56% in January (And What to Expect from Powell)

Our Model Portfolio delivers its first 50% winner of the year. It can't hurt to take some profits, as there is a lot of uncertainty on the horizon.

Action to take: Another day, another AI challenger—this time from Alibaba, which unveiled Qwen 2.5 during China’s Lunar New Year, claiming it outperforms DeepSeek.

The arms race is intensifying by the hour, but markets are missing the bigger picture - the U.S. remains the cleanest shirt in the laundry regarding global investment flows.

Before you toss that last clean shirt aside, consider these six key steps for navigating this AI battleground.

Hold off on any moves until today’s catalysts play out. Powell’s 2:30 press conference would typically set the tone, but after-hours earnings from Microsoft and Meta—where management will likely address the DeepSeek challenge—could shift sentiment further. We’ll have a clearer picture by tomorrow morning, so it's best to wait until then before putting capital back to work.

Meanwhile, Five Point Holdings (FPH) is now up 56% this month. This is part of a two-year holding portfolio, but some people may want to take profits because it’s about to get rocky…

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Market outlook:

• Futures Mixed: S&P +1bps, Nasdaq +38bps, Russell +7bps

• WTI Crude is down to $73.30 on API inventory, showing a 2.9M barrel rise

• GE Vernova (GEV) surges on $600M energy build-out plans, AI data center venture with Chevron (CVX)

• Frontier (ULCC) proposes new Spirit merger after bankruptcy filing; questions viability of standalone plan

• ASML orders soar as AI-driven chip demand fuels lithography sales, nearly doubling forecasts and reversing Monday’s selloff

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Dear Reader,

The next 48 hours will set the tone for the markets through the balance of February.

I’m leaning bearish in these conditions, mainly because of uncertainty.

Why?