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More than 3.2 million people will see increased Social Security benefits, under a new law.

However, individuals who are affected may have to wait more than a year before they see the extra money that’s due to them from the Social Security Fairness Act, the Social Security Administration said in an update on its website.

“Though SSA is helping some affected beneficiaries now, under SSA’s current budget, SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefits,” the agency states.

The Social Security Fairness Act eliminates two provisions — known as the Windfall Elimination Provision and Government Pension Offset — that previously reduced Social Security benefits for certain beneficiaries who also had pension income provided from employment where they did not contribute Social Security payroll taxes.

Those provisions reduced benefits for certain workers including state teachers, firefighters and police officers; federal employees who are covered by the Civil Service Retirement System; and individuals who worked under a foreign social security system.

The law affects benefits paid after December 2023. Consequently, affected beneficiaries will receive increases to their monthly benefit checks, as well as retroactive lump sum payments for benefits payable for January 2024 and after.

The benefit increases “may vary greatly,” depending on an individual’s type of Social Security benefits and the amount of pension income they receive, according to the Social Security Administration.

“Some people’s benefits will increase very little while others may be eligible for over $1,000 more each month,” the agency states.

The Social Security Administration said it cannot yet provide an estimated timeline for when the benefit adjustments will happen.

In the meantime, the agency is advising beneficiaries to update their mailing address and bank direct deposit information, if necessary. In addition, non-covered pension recipients may now want to apply for benefits, if they are newly eligible following the enacted changes.

This post appeared first on NBC NEWS

Starbucks is expected to report its quarterly earnings on Tuesday, kicking off several weeks of reports from restaurant companies as investors anticipate improving demand for dining out.

A handful of restaurants released preliminary results earlier in January ahead of presentations at the annual ICR Conference in Orlando. For many, like Red Robin and Noodles & Company, their early report showed sales trends improved during the fourth quarter, giving investors more confidence and pushing their shares higher. Only Shake Shack saw its stock fall; its outlook disappointed shareholders, who were hoping for higher targets.

But the largest restaurant companies have yet to announce any results. Starbucks paves the way with its announcement on Tuesday after the bell. Yum Brands and Chipotle won’t share their earnings until next week. McDonald’s, often considered a consumer bellwether, isn’t on deck until Feb. 10.

However, a rollercoaster 2024 for restaurants might have ended on a high note — and that could bode well for the industry in the year ahead.

Industry data suggests that the fourth quarter was better for restaurants overall than the rest of the year. Same-store sales grew in both October and November, according to data from market research firm Black Box Intelligence. December was the only month same-store sales fell during the quarter, but Black Box attributed the swing to the calendar shift caused by a late Thanksgiving.

“We came out of [the fourth quarter] with a lot of momentum and started off really strong … That gives me a feeling that the consumer is still very resilient,” Shake Shack CEO Rob Lynch said. “Consumers are still out there spending money. There’s still a lot of jobs for people who want to go out and get great jobs. We’re kind of bullish on ’25.”

Most casual-dining chains have been in turnaround mode, hoping that revamped menus and new marketing plans will reinvigorate sales. For most of last year, only Chili’s, owned by Brinker International, won over customers with its strategy, helping the chain report double-digit same-store sales growth.

But some of Chili’s rivals saw an improvement in the fourth quarter.

For example, Red Robin said it expects to report a 3.4% increase in its fourth-quarter comparable restaurant revenue, excluding a change in deferred loyalty revenue.

“We’ve been doing a ton of work behind the scenes, and I believe that these stories take time, and you can’t skip the process,” Red Robin CEO G.J. Hart told CNBC earlier in January.

For two and a half years, the chain has implemented a broad comeback strategy, which included bringing back bussers and bartenders and overhauling its signature burgers. More recently, Red Robin has launched a loyalty program and unveiled promotions for certain days of the week, reintroducing customers to its revamped restaurant experience and helping it compete with Chili’s.

California Pizza Kitchen also had a strong fourth quarter, and the momentum hasn’t slowed, according to the chain’s President Michael Beacham.

“We had a great [fourth quarter], and we’re already starting out in 2025 with some really strong numbers, and that’s just with our in-dining guests,” Beacham said. CPK is privately owned and doesn’t publicly report its quarterly results, but its sales trends can offer clues about how other casual restaurants are performing.

It helps, too, that diners aren’t feeling as strapped for cash as they were earlier in 2024.

“It looks like the consumer is starting to feel a little bit better than they were in prior quarters,” Darden Restaurants CEO Rick Cardenas said on the company’s earnings conference call in December.

Before the holidays, Darden, which operates on a different fiscal calendar than most of its peers, reported stronger-than-expected demand for its food during the quarter ended Nov. 24. In particular, same-store sales at LongHorn Steakhouse and Olive Garden beat Wall Street’s estimates. Executives credited more frequent visits from diners with annual incomes of $50,000 to $100,000.

Some of the biggest restaurant names might have the most disappointing quarters.

Starbucks is still in turnaround mode. Now under the leadership of former Chipotle CEO Brian Niccol, the coffee giant is in the early innings of a turnaround.

″[Fiscal quarter one] is expected to be another challenging quarter as SBUX implements a host of operational changes. Margin pressure is expected to be similar to Q4, but we believe investors likely look through [near-term] headwinds while focusing on evidence of [long-term] turnaround potential,” Wells Fargo analyst Zachary Fadem wrote in a research note on Thursday.

While Niccol has already tweaked the company’s advertising and promotional strategy, it will take more time for Starbucks to implement larger changes, like a menu overhaul and faster service. The company also recently said it will lay off some of its corporate workforce, although it hasn’t shared how many jobs will be affected.

Wall Street is expecting the Starbucks to report quarterly same-store sales declines of 5.5%, according to StreetAccount estimates.

And then there’s McDonald’s, which spent much of its fourth quarter handling a foodborne illness crisis.

In October, the Centers for Disease Control and Prevention connected a fatal E. coli outbreak to McDonald’s Quarter Pounder burgers. The chain reacted by temporarily pulling the menu item in affected areas and eventually switched suppliers for the slivered onions targeted as the likely culprit.

Traffic to McDonald’s restaurants across the U.S. fell as consumers reacted to the headlines, although analysts expect the company to report that trend reversed later in the quarter.

“We expect headwinds related to the E. coli outbreak likely weighed on 4Q US [same-store sales], with data indicating pressured trends in November, but our franchisee discussions and traffic trends highlighting recovering guest counts in December,” UBS analyst Dennis Geiger wrote in a note to clients on Wednesday.

Though some chains are lagging behind, restaurant executives generally seem more positive about 2025, citing improving consumer sentiment and wage growth.

“I’m cautiously optimistic about where we’re headed, and it feels good — it really does,” Red Robin’s Hart said.

Restaurants will also be facing easier comparisons to last year’s sales slump, making their growth this year look more impressive.

But industry optimism doesn’t ensure smooth sailing for the year ahead. Investors will be listening carefully for executive commentary about how traffic and sales are faring so far in the first quarter.

For example, restaurants have had to contend with the wildfires that ravaged Los Angeles, displacing residents and temporarily shuttering some eateries, in addition to the usual seasonal snowstorms and frigid temperatures that keep diners at home.

“I think overall, if you take out weather, this tragic thing that’s happening in California, we see green shoots already for restaurants that aren’t impacted,” Fogo de Chao CEO Barry McGowan said. “We’re hopeful this year.”

This post appeared first on NBC NEWS

Frontier Airlines said Wednesday it has again proposed merging with struggling rival Spirit Airlines, which is in bankruptcy.

Frontier and Spirit first announced a deal to merge in 2022, but a JetBlue Airways offer derailed that plan. JetBlue’s proposed acquisition of Spirit was blocked by a federal judge last year, and Spirit filed for bankruptcy protection in November.

Frontier said in a release that it has met with Spirit’s board and executives since it made its proposal this month. Frontier executives said in a email to counterparts at Spirit this week that their plan is better than Spirit’s own plan to emerge from bankruptcy.

“We continue to believe that under the current standalone plan, Spirit will emerge highly levered, losing money at the operating level, and this would not be a transaction we would pursue,” wrote Frontier Chairman Bill Franke and CEO Barry Biffle in a Tuesday email to Spirit Chairman Mac Gardner and CEO Ted Christie. “As a result, time is of the essence.”

Christie and Gardner told their Frontier counterparts that they were rejecting the deal, calling the terms “inadequate and unactionable,” according to a letter shared in a securities filing on Wednesday.

Spirit said it expects to exit Chapter 11 bankruptcy this quarter. It has cut costs recently, including by slashing some 200 jobs and selling some of its Airbus planes. The airline had also been particularly challenged by a Pratt & Whitney engine recall that grounded dozens of its jets.

Budget carriers like Frontier and Spirit have struggled post-pandemic, as costs like salaries have risen and consumers have opted for trips abroad on carriers with options for roomier and more expensive seats.

Both Frontier and Spirit have been working to upend their business models that were marked by low fares and fees for add-ons from seat assignments to cabin baggage.

The airlines last year did away with cancellation and change fees for some of their tickets and started bundling perks along with tickets. Frontier last year said it would start offering a premium section at the front of the plane.

This post appeared first on NBC NEWS

In this video, Mary Ellen reviews the new uptrend in the S&P 500, and highlights what’s driving it higher. She then shares new pockets of strength that are poised to take off, and what to be on the lookout for ahead of next week’s M7 earnings reports.

This video originally premiered January 24, 2025. You can watch it on our dedicated page for Mary Ellen’s videos.

New videos from Mary Ellen premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

Trade tariffs have been hogging the headlines since last year, and have been a sticky debate point heading into the 2024 US elections. With newly-elected US President Donald Trump in office, the fear of tariffs is front and center in investors’ minds.

On his first day in office, President Trump shied away from slapping tariffs, which provided some relief to investors and was reflected in the stock market’s price action. However, later in the day, Trump said he would impose tariffs on Canada and Mexico on February 1.

If history is any indication, tariffs have been a drag on the US economy and have had a negative impact on the stock market’s performance. As an investor, your primary goal is to protect your portfolio from large drawdowns. To achieve this goal, you’ll need to regularly monitor the stock market’s price action.

Tariff Talk

Tariffs can be both beneficial and detrimental to the overall economy. The general consensus is that they will increase the prices of imported goods, which will hurt consumers. On the other hand, they can increase domestic production and make the US economy more profitable, resulting in higher wages and increased domestic consumption.

The effects of tariffs on the US economy will take years to unravel, but the stock market reacts instantly. The lack of tariff slaps on day one of Trump 2.0 sent the broader stock market indexes higher. The S&P 500 ($SPX) closed at a new high on January 23. The Nasdaq Composite ($COMPQ) and Dow Jones Industrial Average ($INDU) are approaching their all-time highs.


The Market Overview panel on the StockCharts Dashboard gives you a bird’s eye view of equities, bonds, commodities, and cryptocurrency markets.

Learn more.


But what if President Trump indeed slaps tariffs on Mexico and Canada on February 1? Will this benefit or hurt the US economy? It could go either way, which is why investors should monitor the US’s performance relative to other countries.

Domestic or International Stocks?

The US economy is strong, corporate earnings are solid, and investors are complacent. However, the implementation of tariffs could change the narrative, which is why investors should monitor the US market’s performance relative to the rest of the world.

The chart below provides a comprehensive overview of the US market’s performance compared to the rest of the world over three years. The top panel displays the performance of the Vanguard Total World Stock ETF (VT), Vanguard Total Stock Market ETF (VTI), and Vanguard Total International Stock ETF (VXUS). The middle panel compares the US market’s performance to the world’s, and the bottom panel compares the US market to international stocks.

FIGURE 1. WEEKLY CHART OF THE US STOCK MARKET VS. THE REST OF THE WORLD. The US stock market, represented by VTI, is the outperformer, over three years.Chart source: StockCharts.com. For educational purposes.

A glance at the above chart shows US stocks are outperforming international stocks. If this reverses, then it’s time to reevaluate your portfolio and decide whether you want to allocate your assets across global stocks.


There are several international indexes and exchange-traded funds (ETFs) available in StockCharts.

A good starting point is to download the StockCharts Essentials ChartPack.


In addition to monitoring relative performance, investors should keep an eye on the US dollar. A strong dollar indicates the US economy is performing well relative to other countries. The daily chart of the US Dollar Index ($USD) shows the US dollar continues to be resilient, despite its pullback after peaking on January 13, 2025.

FIGURE 2. DAILY CHART OF US DOLLAR VS. CANADIAN DOLLAR AND MEXICAN PESO. Keep an eye on the strength of the US dollar relative to the Canadian dollar and Mexican peso.Chart source: StockCharts.com. For educational purposes.

The lower panels display the US dollar relative to the Canadian dollar and Mexican peso. As of this writing, the US dollar retains its strength, although it’s moving sideways relative to the two currencies.

Canada and Mexico could be the first countries to face tariffs. When Trump didn’t mention tariffs when he was signing executive orders, the Canadian dollar rose, but later in the day, as it was announced that Canada would be slapped with tariffs on February 1, the Canadian dollar lost ground. Monitoring the performance of the respective currencies relative to the US dollar can reveal strengths or weaknesses in the US economy.

The US is the world’s largest importer of manufactured goods. If tariffs are imposed, many sectors and industries will get caught in the trenches of the trade war, some experiencing a greater impact than others. Which sectors could get hit the hardest?

Sector Watch

Assuming Trump enforces his proposed tariffs on imports from China, Canada, and Mexico, the sectors that will bear the brunt are Technology, Materials, Industrials, and Consumer Discretionary.

Technology

Tariffs are only going to be applied to components manufactured in other countries. Semiconductor and hardware companies could be affected, but those that rely mostly on cloud services or ad revenues may not see significant changes.

Materials

The US depends on Canada and Mexico for many resources, such as aluminum, zinc, copper, and nickel. These are used to produce aircraft, home appliances, medical equipment, and home construction. Manufacturers will face higher costs if 25% tariffs are implemented.

Industrials

The US imports automobiles and light-duty motor vehicles, motor vehicle parts, heavy-duty trucks and chassis, and motor vehicle electrical and electronic equipment from Mexico and Canada. The US consumer will be faced with higher automobile prices if tariffs are implemented.

Consumer Discretionary

If tariffs don’t increase domestic production, then the US consumer will face higher prices. As a result, consumption will decline for discretionary items such as new cars, home appliances, and consumer electronics.

The PerfCharts tool in StockCharts helps you monitor which sectors are outperforming and which are underperforming. The chart below shows the performance of Technology, Materials, Industrials, and Consumer Discretionary sectors over one year.

FIGURE 3. PERFORMANCE OF TECHNOLOGY, INDUSTRIALS, MATERIALS, AND CONSUMER DISCRETIONARY SECTORS. Over the past year, Consumer Discretionary is in the lead, up 34.34%. Will it maintain its lead if tariffs are imposed?Chart source: StockCharts.com. For educational purposes.

Consumer Discretionary is leading the pack, but, if tariffs are imposed, it could lose its lead. If your portfolio is overweighted in stocks in this sector, it may be time to reallocate your assets among different sectors.

The Bottom Line

During President Trump’s first term, the stock market declined after tariffs were announced. That doesn’t mean a similar scenario will take place this time. With the uncertainty surrounding tariffs, investors need to prepare for any scenario to surface.

Be sure to follow the stock market by monitoring the broader indexes, the performance of the US market relative to the rest of the world, the US dollar’s strength, and sector performance. Staying abreast of stock market action will help you identify investor sentiment changes, which, in turn, will help position your portfolio for success.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

While StockCharts offers numerous tools you can use to find top stocks or top-gaining stocks, I decided to focus on an Outperforming SPY: 3-Month Relative Highs scan to see if I can find a few resilient stocks in early-stage trends, especially after Monday’s huge market rout.

FIGURE 1. THE OUTPERFORMING SPY SECTION OF THE PREDEFINED SCAN GROUP.  I went with the first scan to find stocks that outperformed SPY over three months.Image source: StockCharts.com. For educational purposes.

What I found were two cloud-based tech stocks at different trend stages: Snowflake (SNOW) and Twilio, Inc. (TWLO). It turns out that both were garnering attention on Wall Street due to their recent earnings performances:

  • SNOW surged late last year on strong financial performance and strategic AI advancements.
  • TWLO’s jump to an all-time high can be attributed to several analysts recent “buy” ratings and upward price target revisions, following the company’s strong earnings results and guidance.

Also, note that both stocks have a StockChartsTechnicalRank (SCTR) above the 90 line, indicating extreme bullishness across multiple technical indicators and timeframes.

FIGURE 2. RESULTS OF THE SCAN. When you run a scan, consider categorizing stocks by volume to list the most liquidly traded stocks from the top down.Image source: StockCharts.com. For educational purposes.

While outperforming SPY, an S&P 500 proxy, points to recent developments in the stock, it’s always good to get a bigger-picture view of relative performance. In light of this notion, take a look at a one-year chart illustrating relative performance between $SPX, SNOW, and TWLO.

FIGURE 3. PERFCHARTS RELATIVE PERFORMANCE OF SPY, SNOW, AND TWLO. This gives you a one-year perspective on the relative outperformance and underperformance of the two stocks.Chart source: StockCharts.com. For educational purposes.

This adds more depth to the comparison. It also makes you wonder if TWLO and SNOW are overvalued and undervalued, respectively, relative to the S&P 500 on a purely technical basis.

With that in mind, let’s start with a daily chart of SNOW.

FIGURE 4. DAILY CHART OF SNOW. Note the conflicting volume-based indicators. You’ll need to analyze this divergence to get a clearer set of possible interpretations.Chart source: StockCharts.com. For educational purposes.

SNOW is breaking above resistance (and its most recent swing high) at roughly $187. The nearest level of support can be found at its most recent swing low at the $153 range. Note the significant earnings-driven gap late November; a range it might retest should SNOW’s breakout fail. SNOW’s price momentum has pushed it toward the early stages of an overbought condition, as indicated by the Relative Strength Index (RSI).

If that’s relatively straightforward, the picture presented by the volume indicators is much more confusing. The On Balance Volume (OBV) indicates strong buying pressure, but the Accumulation/Distribution Line (ADL) behind the price suggests a drastic weakening in money flows. What might this mean? Here are a few possibilities:

  • Institutional distribution and false strength, or institutional sellers absorbing retail demand.
  • Rally or trend exhaustion.
  • If price holds above support, it can also indicate hidden accumulation.

Your actionable step: Add SNOW to your ChartLists and track its price movement relative to support and resistance levels. This will help you better understand its potential direction, assuming that it’s supported by momentum and volume.

Now let’s shift over to a daily chart of TWLO.

FIGURE 5. DAILY CHART OF TWLO. Strong breakaway gap, but possibly well-overbought.Chart source: StockCharts.com. For educational purposes.

TWLO experienced a parabolic jump following a breakaway gap just last week. While the OBV underscores the bullish optimism, showing strong buying pressure, the Chaikin Money Flow (CMF) signals that selling pressure is now greater than buying pressure.

Is this another case, similar to SNOW, of retail strength buying into institutional selling? Or will accumulation continue once TWLO has pulled back? After all, the RSI is signaling overbought conditions, and TWLO is well above the upper Bollinger Band.

For now, add TWLO to your ChartLists and wait for it to pull back to the middle Bollinger Band. If you’re bullish on TWLO, such a pullback would present a strong buying opportunity as long as price doesn’t fall below $105, the bottom level of the month-long congestion range.

At the Close

SNOW and TWLO have shown strong relative performance and bullish momentum, but conflicting volume indicators suggest caution. Monitoring key support and resistance levels, along with volume and momentum, will provide better clarity on their next moves. Keep them on your ChartLists and monitor them for confirmation before taking action.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The week started with a wild ride when DeepSeek created a bizarre “deep sink” day in the stock market. NVIDIA Corp. (NVDA) was one of the most actively traded stocks, closing lower by 16.97%. The stock lost $593 billion in market cap, which, according to Barron’s, is the most market value a stock has lost in a single day. There was a lot of talk suggesting the semi-bubble may have burst.

The release of DeepSeek R1, an AI tool that appears to be much more efficient than other large language models caused NVDA’s stock price plunge. This raises questions about the need for expensive hardware that NVDA and its competitors provide. Reduced hardware needs would mean less spending on AI infrastructure, impacting employment and, ultimately, the economy.

Despite the massive selloff in semiconductor stocks, other areas didn’t feel as much pain. The Dow Jones Industrial Average ($INDU) closed higher, the S&P Equal Weighted Index ($SPXEW) closed up 0.02%, and seven of the 11 S&P sectors closed in the green. The top-performing sectors were Consumer Staples, Health Care, and Financials (see image below). Out of the Mag 7 stocks, Meta Platforms (META), Apple (AAPL), and Amazon (AMZN) closed higher. These companies would benefit greatly from the implementation of AI tools.

However, Monday’s selloff may have been overhyped because, on Tuesday, the narrative shifted. The chart below shows how the S&P 500 ($SPX) bounced off its 21-day exponential moving average (EMA).

FIGURE 1. S&P 500 BOUNCES BACK. A bounce off its 21-day EMA and improving breadth suggests the S&P still has legs.Chart source: StockCharts.com. For educational purposes.

Interestingly, the NYSE New 52-week highs outnumbered the New 52-week lows on Monday. This should have indicated that Monday’s selloff could be a short-lived overreaction.

Overall, the uptrend in the S&P 500 has not suffered much harm, but considering it’s close to its top, a little hesitancy to continue higher is healthy.

The Nasdaq Composite still has a little work to do before confirming its bull trend. An upside follow-through and improving breadth would confirm a bullish trend (see chart below).

FIGURE 2. NASDAQ COMPOSITE NEEDS A LITTLE MORE UPSIDE FOLLOW-THROUGH. Improving breadth indicators and a continuation to the upside would confirm the Nasdaq’s bullishness.Chart source: StockCharts.com. For educational purposes.While the index broke above its downward-sloping trendline connecting the lower highs, Monday’s price action broke that trajectory. Investors should look for the Nasdaq to resume an uptrend—a series of higher highs and higher lows. The Nasdaq Composite Bullish Percent Index (BPI) is shy of 50, about 45% of Nasdaq stocks are above their 200-day moving average, and the Nasdaq Advance-Decline Line is still not convincingly bullish. The Nasdaq is still at a crossroads, but it has a lot of damage to overcome.

The Dow Jones Industrial Average ($INDU), which was running behind, has caught up with the other indexes and is getting very close to its all-time high. Its breadth is also strengthening—a respectable BPI of 63.33, a rising Advance-Decline Line, and 25% of Dow stocks above their 200-day simple moving average.

FIGURE 3. DOW JONES LEADS THE INDEXES. The Dow is looking the most bullish of the three indexes.Chart source: StockCharts.com. For educational purposes.

The Bottom Line

Investors should always worry about protecting their portfolios, so it shouldn’t be surprising that negative news sent investors into a panic-selling mode. Profit-taking from a strong stock performer such as NVDA is a natural reaction. After getting slammed beyond belief on Monday, NVDA’s stock price recovered on Friday, closing higher by 8.82%. It hasn’t recovered all its losses, but Tuesday’s move is encouraging.

Wednesday will be an eventful day. There’s the Fed meeting and Tech earnings are in full swing. Microsoft Corp. (MSFT), Meta Platforms (META), and Tesla, Inc. (TSLA) report quarterly earnings after the close. META closed at an all-time high, MSFT closed higher and recovered from Monday’s loss, and TSLA closed slightly higher. Will the upward move continue?


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

People across China are hailing the success of homegrown tech startup DeepSeek and its founder, after the company’s newest artificial intelligence model sent shock waves through Silicon Valley and Wall Street.

“DeepSeek overturns the US stocks overnight” one trending hashtag with tens of millions of views proclaimed on Chinese social media platform Weibo. “DeepSeek makes Meta panic,” said another, in reference to the US tech giant that’s invested heavily in developing its own AI models.

More than a dozen hashtags related to the cutting-edge technology were trending on Weibo early this week as DeepSeek surged to the top of international app store charts, surpassing American company OpenAI’s ChatGPT on Monday.

DeepSeek founder Liang Wenfeng was also hailed as a tech visionary who could help China usher in a culture of innovation to rival that of Silicon Valley.

The engineer-turned-entrepreneur, who rarely gives interviews, is known for hiring only domestic talent and keeping his AI models open source, allowing other companies or users to test and build upon the model.

Liang, a co-founder of AI-oriented hedge fund High-Flyer Quant, founded DeepSeek in 2023. The startup’s newest model DeepSeek R1, unveiled on January 20, can nearly match the capabilities of its far more famous American rivals, including OpenAI’s GPT-4, Meta’s Llama and Google’s Gemini. However, it cost less than $6 million to build, the company claims – a fraction of the investment from those other firms.

Famed tech investor Marc Andreessen hailed the model as a “Sputnik moment” and US President Donald Trump on Monday called the breakthrough a “wake-up call” for America in its rivalry with China. Technological dominance, especially in AI, has become a key battleground between the two powers, with the US in recent years limiting Chinese firms’ access to chips that could power rapid AI development.

Analysts say that more information is needed to verify DeepSeek’s claims about its product’s pricetag and point out that the app operates within the stringent restrictions on speech and information imposed by the Chinese government. That means its AI assistant’s answers to questions on the Tiananmen Square massacre or Hong Kong’s pro-democracy protests will mirror Beijing’s line – or a response will be declined altogether.

But for many in China, the success of the technology – and Liang’s vision and ethos for DeepSeek – mark a significant step forward for the country in a competitive international arena.

“No matter how powerful the old guard is, they may be overturned overnight,” read one triumphant comment on Weibo with over a thousand likes.

“(Liang’s) achievements … can be called a national destiny,” another read.

‘Changing the rules of the game’

Born in the 1980s as the son of a primary school teacher, Liang grew up in a small city in China’s southern province of Guangdong. He went on to study information and electronic engineering at Zhejiang University, a prestigious school in China’s eastern tech hub Hangzhou, according to Chinese state media.

Early business associates interviewed by state-linked financial outlet Yicai in recent days remembered the future DeepSeek founder as a bit “nerdy” and recalled “a terrible haircut” he sported in the past.

Liang talked about his idea of training large AI models and “changing the rules of the game,” but no one took him seriously, the outlet reported, without naming the early associates. Such feats were typically only deemed possible for China’s tech giants like ByteDance or Alibaba, it said.

Liang co-founded his AI-oriented hedge fund High-Flyer Quant in 2015, less than decade after he finished his undergraduate studies, according to state media reports. The fund incorporates AI machine learning models into its operations, according to the company’s website.

At the same time, the firm was amassing computing power into a basketball court–sized AI supercomputer, becoming among the top companies in China in terms of processing capabilities – and the only one that was not a major tech giant, according to state-linked outlet The Paper.

In 2023, Liang founded DeepSeek, with a focus on advancing the field of general artificial intelligence – and, apparently, revamping China’s culture around innovation.

“We often say there’s a one or two-year gap between China and the US, but the real gap is between originality and imitation. If this doesn’t change, China will always be a follower,” Liang said in a rare media interview with the finance and tech-focused Chinese media outlet 36Kr last July.

The rise of DeepSeek roughly coincides with the wind-down of a heavy-handed state crackdown on the country’s tech giants by authorities seeking to re-assert control over a cohort of innovative private firms that had grown too powerful in the government’s eyes.

But Beijing has also placed tremendous emphasis on cultivating technological prowess, with Chinese leaders vowing over the past year to boost self-reliance and strength in technology – especially in the face of mounting tech competition with the United States.

Liang appeared to reference difficulties posed by US tech export controls – saying in the 36Kr interview last year that his company’s challenges have not been about money, but the embargo on “high-end chips.”

But he also expressed optimism about China’s ability to compete in the future.

“When society allows hardcore innovators to succeed, collective thinking will change. We just need more concrete examples and processes,” Liang told the outlet.

‘We don’t do mediocre’

The company, which has teams in Beijing and Hangzhou, has remained small, with just under 140 researchers and engineers, according to state media – a far cry from the large firms both in China and the US that have led the creation of AI models.

DeepSeek’s employees have been recruited domestically, Liang said in the same interview last year, describing his team as fresh graduates and doctorate students from top Chinese universities.

“The top 50 talents may not be in China, but maybe we can create such people ourselves,” he told 36Kr, noting that the work is divided “naturally” by who has what strengths. “Innovation first requires confidence. This confidence is usually more obvious in young people,” he added.

Zihan Wang, a former DeepSeek employee now studying in the US, told MIT Technology Review in an interview published this month that the company offered “a luxury that few fresh graduates would get at any company” – access to abundant computing resources and the freedom to experiment.

The whole team shared a “collaborative culture” around research, Wang said.

Active recruitment ads on the DeepSeek website and major job seeking sites show the company hiring deep learning researchers, engineers, and user interface designers.

Among them, the highest paid engineers’ positions are listed with a monthly salary range of up to 90,000 yuan ($12,400). By comparison, the higher end of the base pay for a Google software engineer is upwards of $29,000, according to tech industry salary insight platform levels.fyi.

A post on DeepSeek’s official Wechat social media account declares that the company’s devotion is to “exploring the essence of AGI” or artificial general intelligence. “We don’t do mediocre things and answer the biggest questions with curiosity and a far-reaching vision,” the post added.

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US President Donald Trump has doubled down on his proposal to “clean out” Gaza by removing Palestinians living there to Jordan and Egypt, a plan which has appalled some allies but has been quickly embraced by Israel’s far right.

Having first floated the idea Saturday, Trump warmed to his theme Monday, saying of Gaza’s population: “I’d like to get them living in an area where they can live without disruption and revolution and violence so much.”

He has not specified whether such emigration would be voluntary. The forcible displacement of civilians “can constitute a war crime and/or crime against humanity” depending on the context, according to the United Nations.

“I think you can get people living in areas that are a lot safer and maybe a lot better and maybe a lot more comfortable,” he said on Monday.

While there has been no response from the Israeli Prime Minister’s Office, the idea was applauded by far-right Israeli politicians.

Finance Minister Bezalel Smotrich, who leads the Religious Zionism party, said Trump had recognized that Gaza was “a breeding ground for terror,” and “there is no doubt that in the long run, encouraging migration is the only solution that will bring peace and security to the residents of Israel and alleviate the suffering of Gaza’s Arab residents.”

Smotrich, who also has a ministerial position in the defense ministry, said he was working on a plan to implement Trump’s vision. “When he wants something, it happens,” he said. Smotrich has been advocating for what he calls “the voluntary emigration of Gaza Arabs to countries around the world” since 2023.

But the idea of displacement, voluntary or otherwise, is horrifying to Jordan and Egypt and likely alarming to other Arab allies of the US, threatening decades of international consensus about the right of Palestinians to a homeland. Ayman Safadi, Jordan’s foreign minister, said Sunday: “Jordan is for Jordanians and Palestine is for Palestinians.”

“Our rejection for the deportation is steadfast and unchanging.”

Trump said the removal of Palestinians might be temporary or “long-term,” but Arab critics allege that Palestinians have never been allowed by Israel to return to land once removed.

Neither Egypt nor Jordan would contemplate being party to a repeat of the Palestinian ‘Nakba’ or ‘catastrophe’ in 1948. Roughly 700,000 Palestinians were forced from their homes when the state of Israel was born. A second iteration would be tantamount to condoning and supporting ethnic cleansing.

Much like Denmark hopes Trump will abandon his ideas for US control of Greenland, the moderate Arab states will be praying that the US President forgets about transferring the Gazans.

The comparison was not lost on Iranian Foreign Minister Abbas Araghchi, who said in an interview with Sky News Tuesday that “Palestine cannot be deleted and Palestinians cannot be expelled. My suggestion: Instead of Palestinians, try to expel Israelis to Greenland. Take them to Greenland so you can kill two birds (with) one stone.”

Saudi-UAE silence

Jordan and Egypt seem likely to huddle with their allies in the Gulf, especially Saudi Arabia and the United Arab Emirates, in an effort to present a united front.

So far, the Saudis and Emiratis have remained publicly silent on the Trump plan. King Abdullah II of Jordan has also said nothing about his call with Trump on Saturday. But the Jordanian court pointedly released a read-out of his call Monday with new Secretary of State Marco Rubio, which may have been an effort at damage limitation.

The statement said they discussed ways to “enhance regional security and stability…and means to strengthen the strategic partnership between Jordan and the United States, as well as keenness to maintain coordination and consultation on various issues.”

The response from Cairo was more puzzling. A senior Egyptian official denied that President Abdel Fattah al-Sisi had spoken with Trump, despite the latter’s assertion Monday that they had spoken. Trump declined to say directly if the Egyptian president had an opinion on taking additional Palestinian refugees.

“He’s in a very rough part of the world, to be honest, as they say, it’s a rough neighborhood, but I think he can do it,” Trump said.

The Egyptian official added that readouts between the Egyptian president and heads of state are released when they take place. The Egyptian Presidency itself has made no comment about any call and the White House hasn’t released a readout.

Trump also appears to have nodded towards the belief among some Israelis that Gaza isn’t really Palestinian land anyway.

“You know, when you look at the Gaza Strip, it’s been hell for so many years, and it just seems to be this – various civilizations start here, started thousands of years before,” he said Monday.

That fits right in with the perspective of people like the former Israeli Minister of National Security Itamar Ben Gvir, who leads the Jewish Power party.

Foreign aid as potential leverage

After a year of transformative upheaval in the Middle East, even the idea that millions of Palestinians might be moved from their homes is potentially a source of still greater instability. Sisi has previously said that taking in Gazans would threaten Egypt’s peace agreement with Israel because of the risk that some of them would resume fighting the Jewish state from within his country’s borders.

The risk is existential to Jordan, which has more than a million refugees from neighboring countries as well as about 2.4 million registered Palestinian refugees. Indeed, more than half of its inhabitants are of Palestinian descent, and its demography would be transformed by another influx. But Jordan cannot afford to dismiss Trump’s idea out of hand. A country of few resources, its 2023 budget deficit stood at 5.1% of its economic output, and a fifth of its workforce is unemployed. It is heavily reliant on foreign aid and is the second biggest recipient of US aid in the Middle East after Israel, with more than $1.7 billion delivered in 2023.

Trump has already moved to put foreign aid and tariffs at the center of a foreign policy whose first tenets have been more stick than carrot. That will not be lost on the Jordanian and Egyptian governments now in the crosshairs. Egypt is the region’s third-biggest recipient of US aid, with $1.5 billion delivered in 2023.

“I wish he would take some,” Trump said of Sisi on Monday, referring to Gazans. “We help them a lot, and I’m sure he can help us, he’s a friend of mine.”

Were Trump to persist with the idea, the prospect of extending the Abraham Accords to include normalization between Israel and Saudi Arabia – a centerpiece of his Middle East policy – would also be jeopardized. While Crown Prince Mohammed bin Salman has close personal ties with Trump, he has repeatedly made clear that normalization is linked to a pathway to a Palestinian state. Emptying Gaza would not fit with that priority.

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A rebel alliance claimed the capture of the biggest city in the Democratic Republic of Congo’s mineral-rich eastern region this week, pushing back against resistance from government troops backed by regional and UN intervention forces.

The takeover of Goma is yet another territorial gain for the Alliance Fleuve Congo (AFC) rebel coalition, which includes the M23 armed group – sanctioned by the United States and the United Nations.

It is also a swift expansion of the alliance’s foothold across swathes of eastern DR Congo – where rare minerals crucial to the production of phones and computers are mined – and is likely to worsen a long-running humanitarian crisis in the region.

More than a dozen foreign peacekeepers, as well as the military governor of North Kivu province, have been killed in recent days trying to fend off the rebels, as thousands of locals flee their advance into Goma.

What are the latest developments?

South Africa’s military confirmed Tuesday that four more South African soldiers deployed in DR Congo as part of the UN peacekeeping mission there had died, only days after nine were killed in the fighting.

Meanwhile, aid agencies said that hospitals were overwhelmed as hundreds of people caught in the crossfire in Goma sought treatment for injuries, among them seriously wounded children.

There were “many dead bodies” in the city’s streets, said Jens Laerke, a spokesperson for the UN humanitarian office. Fighters had reportedly raped civilians, and property had also been looted, he said. Among those killed was a famed Congolese boxer, Balezi Bagunda, according to Matthew Leutwyler, the founder of the non-profit We Are Limitless, who had been working with him to evacuate local children the organization works with.

Reports emerged Monday of Congolese troops exchanging fire with Rwandan soldiers along their shared border as fear of a blown-out war grows.

In a statement Monday, the Uruguayan army, whose troops are part of the UN peacekeeping mission in Goma, said “hundreds” of Congolese soldiers had laid down their weapons following a 48-hour ultimatum by M23.

Rwandan national broadcaster also shared footage of Congolese soldiers surrendering their arms to Rwandan forces at a Rwandan border post after fleeing Goma.

How did the conflict escalate?

DR Congo has experienced decades of militia violence, including armed rebellion by M23, which claims to defend the interest of the minority Rwandophone communities, including the Tutsi.

Since 2022, M23 has waged a renewed rebellion against the Congolese government, occupying a large expanse in North Kivu, which borders Rwanda and Uganda.

For several months, the rebels have also controlled Rubaya, a mining town in North Kivu that harbors one of the world’s largest coltan deposits. This valuable mineral is used in the production of mobile phones.

Bintou Keita, who heads the UN mission in DR Congo, told the Security Council in a September briefing that “competition over exploitation and trade of natural resources” had escalated conflict between armed groups in the country’s east.

According to Keita, coltan trade from the M23-controlled Rubaya mining site is estimated to “supply over 15 percent of global tantalum production”, and “generates an estimated $300,000 in revenue per month to the armed group.”

M23 denied these claims, insisting its presence in the Rubaya area was “solely humanitarian.”

A report by the UN Group of Experts on the Democratic Republic of Congo, released in December, revealed that “at least 150 tons of coltan were fraudulently exported to Rwanda and mixed with Rwandan production.”

Since April last year, the report said, M23, “with RDF (Rwanda Defence Force) support, has made significant territorial gains and strengthened control over occupied areas,” adding that such a pattern suggested “that the true objective of M23 remained territorial expansion and the long-term occupation and exploitation of conquered territories.”

The report added that the RDF’s military interventions “were critical to the impressive territorial expansion achieved” by M23.

Why is Goma important?

Goma is home to around two million people and is the largest city in North Kivu. M23’s incursion on Monday was the second time the group had moved to capture the provincial capital after it briefly took control in 2012.

“We do not want to capture Goma but to liberate it,” he said. “The population is in distress; we must save it as quickly as possible.”

“Goma is a strategic and highly symbolic city with an international airport, as well as proximity to Rwanda and Lake Kivu, opening the easy path with South Kivu,” he said.

But, most importantly, Saleh said, Goma’s fall to M23 “will be the symbol of its complete and total capture” of the eastern part of the DRC.”

M23’s self-proclaimed liberation agenda has been scarred by a long trail of alleged human rights violations and what rights group Human Rights Watch described in 2023 as “war crimes against civilians” in North Kivu. The group has consistently denied such claims.

Fighting between M23, Congolese forces and other rebel groups has also forced many from their homes in the country’s east, with at least 400,000 people displaced just since the beginning of this year in North and South Kivu, the UN’s refugee agency, UNHCR said in a statement.

UNHCR spokesperson Matt Saltmarsh added that “bombs have fallen” on camps housing those who’ve fled, resulting in civilian deaths, including of children.

“Humanitarian access is nearly impossible, resources are stretched to their limits, and displaced families are left in dire need of food, clean water, medicine, and shelter,” Tchwenko said.

What’s at stake for Rwanda?

UN experts believe that an estimated 3,000 Rwandan soldiers operate alongside M23 fighters in eastern DR Congo, outnumbering the rebel group’s number in the country.

According to Saleh, the Congolese analyst, Rwanda does not just support M23, “it (Rwanda) is the M23.”

Western nations, such as the US, Britain, and France, have censured Kigali’s support for the group.

She cited a UN report that found evidence DR Congo’s military had collaborated and carried out joint operations with a Hutu militia group against a mainly Tutsi rebel group, the CNDP, which M23 grew out of.

Hutu militias carried out the genocide of Tutsis and moderate Hutus in Rwanda in 1994.

“This is happening right next to our border,” Makolo said of the insecurity in eastern DR Congo, adding that “the President of the DRC has said publicly that his enemy is President (Paul) Kagame and the Rwandan Government, and that he will ‘liberate’ Rwandans.”

Rwanda’s foreign ministry also blamed DR Congo’s government for failing to engage in dialogue with M23, describing it as a “Congolese rebel group fighting to protect their community in eastern DRC.”

Congolese President Felix Tshisekedi has previously threatened to go to war with Rwanda. Rwandan leader Kagame has responded in kind.

“We are ready to fight,” Kagame told French network France 24 in June last year, adding: “We are not afraid of anything.”

When the UN Security Council convened on Sunday for an emergency meeting on the crisis, DR Congo’s foreign minister Thérèse Kayikwamba Wagner said Rwanda’s role in the conflict was “a declaration of war that no longer hides itself behind diplomatic maneuvers.”

Is there a route to peace?

Eastern African leaders plan to convene an emergency meeting within 48 hours to find solutions to the crisis, Kenya’s President William Ruto said Monday, urging Tshisekedi and Kagame “to heed the call for peace.”

Previous interventions led by Angola, including truce agreements, have failed to cease hostilities.

“But it is rather the quality of the solutions in sight that is the real question,” he said.

“The region needs a lasting solution to the security situation, and to achieve this, one of the conditions is that the DRC must be able to ensure its security and control its economy. Solutions in terms of power-sharing, tribal and ethnic integration are not a lasting solution.”

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