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- [00:01]
A
Hey, this is Jessica Mendoza, host of the Journal Podcast, our show about money, business and power. If you're looking for more deeply reported stories like we share every day, consider becoming a subscriber to the Wall Street Journal. Visit subscribe.WSJ.com TheJournal all lowercase to subscribe now.
- [00:23]
B
FBI agents search a Georgia election office, part of a push to re examine Trump's 2020 laws plus the backstory metals rally that just won't quit and investors reward Meta for growing its digital ad revenue as big tech's AI costs.
- [00:41]
C
Pile up, the market is getting increasingly worried that this massive spending is needing to deliver results now, and advertising is one of the easiest and quickest ways to monetize that, with the promise of more to come.
- [00:53]
B
It's Thursday, January 29th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of what's news, the top headlines and business stories moving your world. Today, Gold has hit another record high, topping the $5,500 mark for the first time as the rush to precious metals continues after recording its strongest annual performance since 1979. Last year the World Gold Council said that global demand for the safe haven asset is expected to remain strong this year, driven by lower interest rates and persistent geopolitical risks. Deputy Finance editor Quentin Webb says the run up in prices means a lot of different investors are trying to get in on the trade.
- [01:37]
D
We've had this long spate of elevated buying by global central banks because in many cases they would like to reduce their dollar dependence and put more of their reserves into another alternative asset. So these things are all together combining to help support gold and to create this upward push in gold prices. In the last few years we've seen the emergence of gold ETFs which now manage many billions of dollars, and you can effectively buy those at the click of a button in your brokerage app. So certainly people just buying gold bars and stashing them in vaults. People are increasingly buying gold ETFs or alternatives such as buying shares in gold miners, of course, but that's a less pure exposure to the gold price.
- [02:18]
B
And Quinton says that an unlikely crossover with crypto is adding to gold's luster too.
- [02:23]
D
Tether has emerged as a significant buyer of gold, partly for a recently launched gold backed stablecoin that it has. But also, don't forget that Tether commands a huge sum of assets because of its major stablecoin, which is tied to the dollar. So that extra buying in the past month is probably another Reason that's helping sustain the gold price.
- [02:47]
B
And gold isn't the only metal hitting new records this morning with silver, copper and palladium all rallying too. Tech giants Meta and Microsoft reported earnings yesterday. Both results topped analyst expectations, with meta posting record Q4 sales growth and Microsoft blowing past net income forecast. What ensued was a tale of two very different investor responses as Meta shares popped in off hours trading while Microsoft's fell. Joining us to dissect the themes cropping up across this earnings season so far is State Street Investment Management's Altaf Qassem. Altaf, Meta and Microsoft are both spending big on data centers, building out their respective AI capabilities and both also signaled yesterday that trend is not going to end. It's really going to play out through 2026. Why then the mixed reaction on Wall Street?
- [03:42]
C
The big difference was that one company was able to show that it was monetizing the huge spend in CapEx on data centers and other sorts of AI infrastructure and the other one was actually showing slowing growth in cloud computing, which is one of its core capabilities. So it's a story of the spending was always expected to be increasing, but the monetization was what the market was looking for and it happened in one company and not the other.
- [04:08]
B
I mean, is the difference here digital ad spending targeting consumers versus AI spending for the purposes of enterprise products?
- [04:17]
C
Yeah, I mean there's a very clear differentiation between consumer and enterprise here. The market is getting increasingly worried that this massive spending, which has all been front loaded, is needing to deliver results now and they've rewarded the companies that have shown that the money is coming through right now and advertising is one of the easiest and quickest ways to monetize that. Whereas with enterprise applications it feels like it's still tomorrow, tomorrow, tomorrow and the market is becoming impatient and I think that's why the stock was punished.
- [04:47]
B
Altaf I'm just thinking about Meta and its digital ad business, a real cornerstone for the company. How relevant is it that consumers seemingly have been as receptive as they've been to AI images and marketing materials? Obviously we know creators have chafed at this, but it's a tailwind for, for businesses that have gone big on AI image creation if they can normalize this within the ad space.
- [05:08]
C
Yeah, I think that's the marketing dream. Right? It's that everyone gets their own targeted personal ad and it's becoming a reality through AI. I don't think consumers are pushing back. The results certainly don't show this. And in the US which is the biggest market the consumer spending is still strong, so I think you're right, there's a couple of tailwinds there.
- [05:27]
B
Tesla reported results last night. CEO Elon Musk announced on an earnings call that the company would be canceling its Model S and Model X EVs and converting some factory space in California to making optimus robots.
- [05:41]
E
Slightly sad, but it is time to bring the ESSEX programs to an end and shift, really. It's part of our overall shift to an autonomous future.
- [05:58]
B
Altaf, we are not here to discuss how sad this pivot might be, but it raises the question if investor patience is already being tested by the lack of revenue from some AI spending around the LLM build out. Is spending big now on a slightly more distant autonomous future? Going to be a harder pill to.
- [06:16]
C
Swallow when you think about the layers of AI. We've had receptive AI, generative AI, which is basically LLMs and everyone's talking about agentic AI and then you've got physical AI which is things like robots and you're right, that's further out in the future, but it has a lot of promise. Again, I think the same story is going to have to apply. It's going to have to be about monetization and showing that it can justify the spending that's been put into it. So it is another long horizon story. And again, the market tends to be a bit more short sighted these days when it sees the numbers that are going into capex Altoff.
- [06:51]
B
One undisputable bright light so far this earnings season has been chip demand. We saw this in SK Hynix's results, in ASML's and Samsung's. How long can companies across the semiconductor supply chain keep having these blockbuster quarters if the thus far deep pocketed hyperscalers are still sorting out how to make a profit off of AI?
- [07:10]
C
Yeah, I think it's definitely, you know, when we talk about deep pockets, what the market has been comfortable with so far is that a lot of this investment has been self financing. It's been coming from the huge cash flow piles that these companies have had and they've been chucking off cash and using it to invest. Where the market gets less comfortable is when we have leverage, when we have this circular financing. So showing that AI can pay for itself, you get a big tick. If you are saying well we have to raise debt or we have to get an investment from another company that's effectively in the same business or in the same vertical, that makes the market a lot more nervous.
- [07:45]
B
Altaf Kassam is the European head of investment strategy and research for State Street Investment Management, Altaf. Thank you so much for being with us on what's news.
- [07:53]
C
Thank you, Luke.
- [07:54]
B
Coming up, the rest of the day's news, including a pair of health updates as US Life expectancy ticks higher after the break.
- [08:06]
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Hi, this is Gunjan Banerjee and this is Telus Demos.
- [08:09]
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We're reporters at the Wall Street Journal and The hosts of WSJ's take on the Week.
- [08:13]
A
Take on the Week is a weekly show that gives listeners a leg up in the world of markets and investing.
- [08:18]
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From the Fed's moves to market bubbles, we dive into the biggest deals, key players and business news ahead.
- [08:24]
A
If you're looking for more news and tools that can help you navigate the markets, consider becoming a subscriber to the Wall street journal.
- [08:30]
F
Visit subscribe.WSJ.com takeontheweek to subscribe now.
- [08:39]
B
FBI agents have searched the main election office in Fulton County, Georgia, seeking records related to the 2020 presidential election. The Trump administration is stepping up efforts to re examine the president's loss to Joe Biden, with Trump promising last week that, quote, people will soon be prosecuted. Trump has repeatedly alleged that Fulton county produced fraudulent results and urged various officials, including Georgia's secretary of state, to help find enough votes to overturn his narrow defeat in the state. Rob Pitts is the chairman of the Fulton County Board of Commissioners, heard here. Courtesy of Atlanta News 1st for the.
- [09:16]
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Life of me, I still cannot understand the fascination about the the 2020 elections, which occurred six years ago. That election is over with. That election has been reviewed, it's been audited. And in every case, every instance, we get a clean bill of health.
- [09:35]
B
Georgia election officials conducted two recounts that confirmed Biden's victory in the state, and no court or election authority found evidence of widespread fraud in the presidential election. Life expectancy in the US reached a record high in 2024, with Americans now living 70. That follows the largest year to year drop in deaths stemming from drug overdoses, with the national center for Health Statistics saying they decreased by more than 26% between 2023 and 2024. The increase in life expectancy signals a rebound from declines during the coronavirus pandemic and progress in tackling the opioid crisis and finally, enthusiasm for GLP.1 weight loss drugs like Wegovy and Ozempic isn't letting up. Nearly one in five Americans have now tried them amid a marketing push, pitching them as lifestyle fixes. But Journal health columnist Sumathi Reddy says that obesity, doctors and researchers find that messaging problematic, as new research confirms that the drugs were designed to be lifelong treatments.
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So a recent study found that when people stop taking a GLP1 drug, they're regaining all the weight they lost back within about 1.5 years. Now, that's four times faster than people who are losing weight through exercise and diet changes. Another thing to know is that any sort of improvements in things like cholesterol and blood pressure, those are completely reversed when you stop taking a GLP1 drug, basically at the same time as you're regaining that weight. Almost every doctor says a GLP drug is a successful intervention for most people. Most obesity doctors will say that these are designed for people with a disease and they should be basically taken forever. And on average, most people are going to regain their weight when they stop them. But one doctor I talked to said, you know, any sort of time spent at a lower weight they think, you know, is ultimately beneficial to your health.
- [11:30]
B
And to read more about what happens when you stop taking GLP1s, check out the link we've left in our show notes. And that's it for what's news for this Thursday morning. Today's show was produced by Daniel Bach and Hattie Moyer. Our supervising producer was Sandra Kilhoff. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show, and until then, thanks for listening.