TNC Daily Open: Tech Stocks Struggle to Rebound

This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
What To Note Today
Nasdaq still lags behind other significant indexes.
Tuesday was the second day the Nasdaq Composite underperformed, as the S&P 500 and Dow Jones Industrial Average increased while the Nasdaq Composite fell. The majority of Asia-Pacific markets declined on Wednesday. Japan’s Nikkei 225 fell by 0.1% as the country’s business confidence improved, according to the January Reuters Tankan survey.
South Korea’s President Yoon arrested
The Corruption Investigation Office for High Ranking Officials in South Korea arrested President Yoon Suk Yeol on Wednesday. The arrest was the CIO’s second attempt, the first being blocked by the president’s security team and the first for a sitting South Korean leader. The announcement was met with a subdued response from South Korean equities.
Consequences of the worldwide bond sell-off
The possibility of fewer interest rate reductions in the United States and growing government debt are driving a sell-off in global bond markets, economists said CNBC. Higher rates make borrowing more expensive for both governments and corporations, which could lead to tax rises and a decline in corporate profits. In addition to exerting pressure on foreign currencies, the increase in U.S. yields makes it more difficult for central banks worldwide to lower interest rates.
Microsoft pauses hiring while Meta reduces jobs.
About 5% of Meta’s lowest-performing staff would be let go, CNBC confirmed on Tuesday. CEO Mark Zuckerberg told staff members about the decision in a memo published on the company’s internal forum on Tuesday. According to an internal memo, Microsoft also intends to stop hiring in some of its consulting business in the United States.
Musk is sued by the SEC for his Twitter shares.
Elon Musk was sued by the SEC on Tuesday.
The billionaire allegedly committed securities fraud in 2022 by keeping his active Twitter investment a secret, which enabled him to purchase shares at “artificially low prices.”
Bottom Line
The tech crash in the market is still going strong.
The Nasdaq Composite fell 0.23% for the second consecutive day, trailing the S&P 500 and Dow Jones Industrial Average, which increased 0.11% and 0.52%, respectively. The Magnificent Seven equities all experienced a decline, although Meta, Tesla, and Nvidia recorded the largest losses.
News of layoffs and hiring freezes coincided with the decline in tech shares, further compounding the sector’s suffering.
According to an internal memo, Microsoft plans to reduce marketing spending, travel expenses, and hiring in a portion of its consulting operation to save money.
Meanwhile, Meta declared in an internal message on Tuesday that it would be “letting go of about 5% of our worst performers.” (I guess it’s similar to how one “enters” free speech or “exits” fact-checking.) Additionally, Zuckerberg forewarned staff that 2025 would “be an intense year.”
Naturally, Zuckerberg’s warning was aimed at Meta. Still, it may also apply to tech firms struggling with significant investments in AI without the income to support such large expenditures.
However, as we move into the fourth quarter earnings season, there are indications of confidence in the business climate for this year.
Infrastructure Capital Advisors founder Jay Hatfield stated, “We do think earnings will be stronger.”
“In the fourth quarter, the economy is doing well. By then, businesses usually find out whether they have an issue, and since the Trump administration is pro-business, they are likely to be fairly hopeful about the future. Thus, we believe that the majority of CEOs have a rather positive outlook for 2025.”
On Tuesday, investors shifted from tech to utilities, financials, and materials, and the positive CEOs may guide other industries.
The consumer price index, expected to decline later today, will determine whether this sectoral rotation continues.

Related

Desert oasis city with world’s most unique landscape and far less tourists than Dubai

There’s a desert oasis that’s beckoning all to explore with far less tourists than its more popular neighbours, including Dubai.Nestled in the northwest region of Saudi Arabia, in the Medina Province you will find AlUla.AlUla is a UNESCO World Heritage Site, famed for its ancient history, natural beauty, and cultural landmarks.The oasis city, once named Dedan, offers one of the most diversified landscapes in the world.The region is home to truly unique rarities including its yellow sand panoramas, black lunar volcanic plateaus, sandstone canyons and red-shaded landscapes.The region is also home to many civilisations, including the Dedanites, Nabateaens, Lihyanites and Romans, offering a melting pot of cultures.AlUla’s landscape is like nothing seen before with its sandstone formations, oases and the AlUla Valley. Elephant Rock is the region’s true gem and is a notable rock formation standing at an impressive 52 meters tall.This city is also described as being a treasure trove for travellers looking to explore the unexplored or walk the less-walked path in the Middle East.In fact, the region is a haven for archaeologists and explorers thanks to its impressive rock-cut tombs and is one of the marvels of Nabateans.Notable spots to visit here include Saudi’s first UNESCO World Heritage Sites, home to roughly 111 uniquely designed tombs known as Hegra, or the state-of-art structure known as Maraya.Other spots well worth an explore include the Old Town of AlUla, Al Jadidah Arts District, Dadan, Jabal Ikmah and Ashar Valley.Outdoor activities are plentiful here such as a helicopter rides, the Giant Swing, a Land Rover tour, hot air balloon riding and star gazing.The nearest airport to AlUla is AlUla’s Prince Abdul Majeed Bin Abdulaziz Airport, found 9.3 miles from the city centre or a 20-minute drive. Flying to the airport of AlUla is only possible from Dammam, Jeddah, and Riyadh.One review on TripAdvisor wrote: “The perfect spot to relax and unwind with friends.”Another added: “This is not what you would expect to find in Saudi Arabia at all. We loved this place as the atmosphere and setting was great and it was so chilled and relaxing.”

Meghan urged to ‘take leaf out of Princess Kate’s book’ after ‘disaster tourist’ attack

Meghan Markle was urged to take a “leaf out of Princess Kate’s book” when it comes to “handling grief with dignity” following the latest backlash that sparked after her and Prince Harry’s visit to a food bank in Los Angeles.The Duke and Duchess of Sussex were spotted in LA last week as they paid a visit to Pasadena in California to support victims of the devastating wildfires that have erupted in the area.Harry and Meghan also met with met the city’s mayor, Victor Gordo, and emergency workers. Their appearance was filmed by local news outlet Fox 11 and snapped by several photo agencies.But their visit sparked backlash, with Hollywood actress Justine Bateman publicly attacking them by naming them “disaster tourists” and accusing them of a “repulsive LA fires photo-op”.Now, the Daily Mail’s Amanda Platell, who often comments on the Royal Family, suggested that the couple should take a more private approach when it comes to dealing with people’s grief.She wrote: “It could all have been so different. If only the smug, bit-part actress Meghan – who thought she knew it all – had taken a leaf out of Kate’s book in handling grief with dignity.”The columnist recalled Princess Kate’s appearance in Southport last year to meet the bereaved parents of victims of the stabbing rampage in Southport.Last October, the Princess of Wales joined her husband, Prince William, on a trip to Southport to privately meet families of Bebe King, six, Elsie Dot Stancombe, seven, and Alice da Silva Aguiar, nine, who were all killed in the knife rampage that took place on July 29, as the children attended a Taylor Swift-themed dance workshop.They also met with their dance teacher Leanne Lucas, 35, who was critically wounded and emergency responders involved in the attack. It was Princess Kate’s first official engagement since announcing the completion of cancer treatment. Ms Platell noted how the royal visit was marked with “no fanfare and without a film crew in tow”.She wrote: “No media was tipped off about the visits. No cameras were allowed to witness their harrowing meetings. [They] were completely covert and not announced publicly until Kate and William had left.”A small media contingency was allowed to briefly film their visit to the first responders and others affected by the tragedy – and that was it. The future King and Queen left quietly, without fanfare, and without a Netflix film crew in tow.”She added that dignity and privacy are “two concepts Meghan will never understand” and accused the duchess that “no good deed is worth doing” for her unless there is a “camera crew around”.She concluded by asking: “Did Meghan ever consider, as she tearfully hugged the victims of the LA fires, that the last thing they needed was a publicity-seeking, celebrity duchess sobbing on their shoulder?”

The United States Can’t Afford to Not Harden its Air Bases

For decades, the United States has relied on airpower and the qualitative superiority of its aircraft to gain an advantage over its adversaries. But that advantage is rapidly eroding. The Chinese military is fielding sophisticated air defense networks that include robust passive defenses, challenging sensors, and highly capable missiles and aircraft. In fact, by our calculations, the amount of concrete used by China to improve the resilience of its air base network could pave a four-lane highway from Washington, D.C. to Chicago.
China’s strike forces of aircraft, ground-based missile launchers, and special forces can attack U.S. airfields globally. The U.S. Department of Defense has consistently expressed concern regarding threats to airfields, and military analyses of potential conflicts involving China and the United States demonstrate that most U.S. aircraft losses would likely occur on the ground at airfields. Despite these concerns, the U.S. military has devoted relatively little attention to countering these threats compared to its focus on developing modern aircraft.
U.S. airpower concepts have largely assumed that U.S. forces would deploy to forward airfields uncontested and that small-scale forward threats to airfields could be nullified. However, China is capable of mounting large-scale, sustained attacks against U.S. and allied airfields in the Indo-Pacific elsewhere. To generate airpower amid this onslaught, U.S. and allied forces need to devote a radical level of effort to learn how to “fight in the shade.”
This is the subject of our new report for the Hudson Institute. In the report, we make two observations. First, China seems to expect its airfields to come under heavy attack in a potential conflict and has made major investments to defend, expand, and fortify them. Second, American investments have been much smaller in scale and scope. Given the Chinese military’s threat to air bases, the United States needs to both be ready to disperse and undertake an urgent campaign to rapidly harden the bases that it and its allies and partners need to operate from in the event of a conflict with China. America has done so before in the face of other threats. To not do so today invites aggression — and could result in losing a major war.

Dealing with Past Threats
The U.S. Air Force has contended with varying levels and types of threats to its air bases. First, during the 1950s, concerns about the vulnerability of NATO air bases to nuclear attack led to the development of a dispersed operating concept to mitigate damage from nuclear and conventional attacks. Later, during the Vietnam War, aircraft losses due to mortar and rocket attacks prompted the Air Force to initiate the Concrete Sky program — a crash effort to build hardened aircraft shelters at the Air Force’s main operating bases in Vietnam. From 1968 to 1970, the Air Force built 373 such shelters, which it found to be effective in defeating attacks. It also conducted a study of air base vulnerability that prompted the construction of hardened aircraft shelters at air bases in Europe and the Pacific. The United States and its allies built roughly 1,000 by the end of the Cold War, including more than 100 in Japan.
In the first decades after the Cold War, the U.S. Air Force operated in support of U.S. combat operations from locations of relative sanctuary. About a decade into this period, analysts began to recognize that new weapons combining satellite-guided precision, long ranges, and submunitions could provide an otherwise inferior adversary with the means to disrupt or defeat U.S. Air Force combat and airlift operations in a conflict. For example, a 1999 RAND study estimated that — if sufficiently accurate and equipped with submunitions — a single Chinese ballistic missile could damage scores of American fighters parked at standard spacing intervals on an open ramp.
Hardening in the Indo-Pacific
To support of an invasion of Taiwan, open source Chinese publications call for seizing air dominance by using surprise attacks to destroy and paralyze an opponent’s air force on the ground. In recent decades, the Chinese military has been building what appear to be the capabilities to carry this out. China’s air force has developed a large force of cruise-missile-equipped strike aircraft. China’s Rocket Force has acquired over 1,000 medium-range ballistic missiles capable of hitting air bases across Japan and the Philippines, and 500 intermediate-range ballistic missiles capable of reaching Guam and the other Mariana Islands. That strike force — combining long range, precision guidance, and in some cases submunitions — appears to have made real the threat to U.S. air bases that analysts began to talk about years ago.
Analysts have explicitly called out robust passive defenses, such as hardened shelters for aircraft, as “the most cost-effective ways to improve air base resilience.” Unfortunately, Air Force leaders have a mixed record when it comes to base hardening. In 2022, Air Force Secretary Frank Kendall voiced support for hardening Air Force bases in the Pacific, but the next year the then-Pacific Air Forces commander said he did not see base hardening as a cost-effective way to respond.
Since the early 2010s, the U.S. military has added only two hardened shelters and 41 non-hardened ones at airfields within 1,000 nautical miles of the Taiwan Strait and outside of South Korea. It also does not appear likely to add any new hardened shelters anytime soon. Including allied airfields outside Taiwan, combined military airfield capacity within 1,000 nautical miles of the Taiwan Strait is roughly one-third of China’s. As can be seen in Figure 1, without airfields in South Korea this ratio drops to one-quarter, and without airfields in the Philippines it falls to 15 percent.
To figure out what China has done to make its air bases resilient, we used commercial satellite imagery to generate estimates of the aggregate improvements to its air bases. In summary, China’s efforts dwarf those of the United States. Entering the 2010s with about 370 hardened shelters, the Chinese military has more than doubled that number, to over 800. The number of non-hardened shelters also more than doubled, giving China a total of more than 3,100 aircraft shelters — enough to shelter the vast majority of its combat aircraft. Over roughly the last decade, China has also added numerous runways and runway-length taxiways, and increased its ramp area nationwide by almost 75 percent. It now has 134 air bases within 1,000 nautical miles of the Taiwan Strait. These bases boast more than 650 hardened shelters and almost 2,000 non-hardened shelters.

Figure 1: Comparison of features at Chinese, U.S., and allied airfields within 1,000 nautical miles of the Taiwan Strait, by location
This has created an imbalance (see Figure 2) in which Chinese forces would need to fire far fewer “shots” to suppress or destroy U.S., allied, and partner airfields than the converse. This imbalance ranges from approximately 25 percent to as great as 88 percent if the United States employed only military airfields in Japan. Strategically, this asymmetry risks incentivizing Beijing to exercise a first-mover advantage — China could strike first if it sees an opportunity to nullify adversary airpower on the ramp.

Figure 2: Estimated munitions required to neutralize airfields, by location
Recommendations
The United States can continue to largely ignore this menace and watch as risk levels increase, or it can face the reality and shape its forces and infrastructure to prevail.
One element of a competitive strategy to gain an advantage is to paradoxically motivate China to double-down on its defensive investment. To do so, the United States should continue improving its ability to strike Chinese forces and key critical infrastructure. By influencing Beijing to spend funds on additional defense measures, Washington can reduce the relative proportion of funds for alternative investments, including strike capabilities.
A strong offense alone, however, will not solve the Defense Department’s problems. Without a baseline level of resilience, it is reasonable to expect U.S. air offensive capabilities will be suppressed in a conflict. Thankfully, the suite of specific improvements is straightforward.
Defend Airfields
First, active defenses are essential to sustained air operations. In the 1980s, amid the threat of Soviet conventional air and ground attacks, the U.S. Army committed itself to “fund, equip, and man ground-based air defenses” as well as air base perimeter defense, for Air Force bases. Those Cold War agreements lapsed in the 1990s and early 2000s, and Army investments in air defense artillery forces have been relatively modest since.
Air base defense is arguably the most important mission the Army could perform in the Indo-Pacific, and Congress should robustly fund the air defense branch. Given competing priorities in the Army budget, this will require accelerating and deepening the Army’s shift of personnel and resources away from ground maneuver forces and toward air defense artillery.
Harden Airfields
Passive defenses are “the most-cost-effective ways to improve air base resilience.” But the military services have spent relatively little on them, which can include not only hardening but also redundancy measures, prepositioning of supplies, reconstitution capabilities, and camouflage, concealment, and deception measures.
To comprehensively harden airfields, the Defense Department will need to shift from treating each construction project individually to conducting a campaign of construction. A major, multi-year campaign of bundled construction at airfields inside and outside the United States — especially in the Indo-Pacific — would create a sustained push for military construction activities at bases, allow the creation of consortia of commercial contractors, and reduce construction costs. 
Over the past couple of decades, there has been growing recognition that the U.S. military needs to invest much more in passive airfield defenses. Fiscal limits and a preference for funding other military systems, such as aircraft, have driven a lack of action. Congress could direct the department to rapidly compose a report that assesses the worldwide U.S. demand for airfield resilience measures, including hardened shelters, hardened fuel stores, reconstitution systems, and the like, and to prioritize funding a percentage of the demand each year in its budget submission.
Similarly, Congress could adopt an approach to directly identify and fund these systems. For example, for every new combat aircraft, it will acquire a new personnel bunker, hardened shelter, munitions bunker, or hardened fuel store for an airfield in the United States and another one in the Indo-Pacific. It should also explicitly authorize and appropriate the construction of shelters for high-value aircraft in the United States, such as the B-21, and ensure military construction proposals in the Indo-Pacific account for threats and are hardened. Of note, Congress recently authorized $289 million for hardened aircraft shelters at Andersen Air Force Base in Guam, though the Air Force requested no such funds and it is unclear whether Congress will appropriate those funds.
Absent a major topline budget increase, the Defense Department will need to fund these investments by decreasing spending in other areas, such as reducing funding for the Department of the Army or aircraft procurement. Although reducing aircraft procurement is problematic, modest trades could have outsized positive effects. For example, procuring one fewer B-21 per year over five years could provide enough funding to build 100 hardened shelters in the continental United States, ensuring that in a conflict, Chinese forces will not be able to easily destroy the B-21 fleet in the United States. By buying one fewer F-15EX or F-35A per year, the Defense Department could resource 20 new hardened shelters in the Western Pacific each year.
Evolve the Force
The Defense Department should also accelerate the development and fielding of forces that enable operations that are less susceptible to China’s airfield attacks. This includes long-range aircraft and aircraft and weapons that can operate from short or damaged runways or operate independently of them. However, the U.S. military will not field these types of forces in large numbers until the 2030s, and it will still require active and passive defenses at airfields regardless of these changes in force design.

Counterarguments and Conclusion
Passive defenses may seem at odds with a predominantly expeditionary U.S. approach to warfare. Why spend limited resources on defenses at home and abroad when the U.S. plans on projecting power overseas? However, unless U.S. forces can defend airfields at home and abroad, they will be unable to support U.S. and allied interests in a conflict. As we consider investments in this area, we should be cautious of three seemingly sensible counterarguments.
“Hardening is not cost-effective — instead, rely on dispersal.”
In general, investments in other passive defenses are less costly and have a higher tactical benefit return than hardening. This has led some observers to think hardening is not cost-effective and is unwise. Even though hardening is relatively expensive and, in some cases, may be lower on the priority list of passive defenses, it is highly valuable, and a range of passive defense measures is necessary.
 “U.S. forces need only do X.”
Some analyses overestimate the positive impact of single or limited facets of passive defenses, such as runway reconstitution or expeditionary fuel storage. Sustained air combat operations require an interdependent system of systems of personnel, fuel, munitions, maintenance, and other support assets. As it considers investments, the U.S. military will need to holistically enhance the passive defenses of airfields. This may require it to prioritize funding a comprehensive set of improvements to a limited number of locations, rather than attempting to field disjointed improvements to many sites.
“Forget hardening — rather, operate from range.”
Facing major threats to airfields in the Western Pacific, the Department of Defense could forgo fortifying airfields that could come under attack and instead adopt a force design that attempts to operate solely from range. Although the force design of U.S. air forces has become heavily reliant on short-range forces, the strategy of completely retiring from forward airfields has three flaws. First, operative forward airfields can provide three to five times as much capacity on station as distant airfields. Consequently, unless the size of U.S. air forces dramatically increases, they will be necessary to provide appropriate levels of capacity. Second, there is no sanctuary. China will likely be capable in the future of attacking U.S. forces at great distances — even within the continental United States. Third, it takes time to adjust force design. Given current airfield manufacturing timelines, it would likely take more than a decade for the Department of Defense to adopt enough long-range combat aircraft, tankers, and weapons to enable a solely stand-off approach or to adopt sufficient runway-independent capabilities. Such future forces will not solve current airfield challenges, and the ability to operate a major proportion of U.S. aircraft from forward airfields would still be highly valuable.
Executing an effective campaign to enhance the resilience of U.S. airfield operations will require informed decisions to prioritize projects and sustained funding. What is clear, however, is that U.S. airfields do face the threat of attack, and the current approach of largely ignoring this menace invites Chinese aggression and risks losing a war. Passive defenses, including hardening, are essential, and other countries have invested heavily in them to sustain airfield operations amidst attack. It is past time for the United States to do so again.

Thomas Shugart is a retired U.S. Navy submarine warfare officer. He is an adjunct senior fellow at the Center for a New American Security, and the founder of Archer Strategic Consulting.
Timothy A. Walton is a senior fellow at the Hudson Institute.
Image: Tech. Sgt. Eric Summers (U.S. Air Force)

Commentary

Beijing ‘firmly opposes’ US ban on smart cars with Chinese tech

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Beijing on Wednesday said it “firmly opposes” a US move to effectively bar Chinese technology from smart cars in the American market, saying alleged risks to national security were “without any factual basis”.”Such actions disrupt economic and commercial cooperation between enterprises… and represent typical protectionism and economic coercion,” foreign ministry spokesman Guo Jiakun said, adding: “China firmly opposes this.”Tuesday’s announcement in the United States, which also pertains to Russian technology, came as outgoing President Joe Biden wrapped up efforts to step up curbs on China, and after a months-long regulatory process.The rule follows an announcement this month that Washington is mulling new restrictions to address risks posed by drones with tech from adversaries such as China and Russia.US Commerce Secretary Gina Raimondo said that modern vehicles contain cameras, microphones, GPS tracking and other technologies connected to the internet.”Cars today aren’t just steel on wheels — they’re computers,” she said.”This is a targeted approach to ensure we keep PRC and Russian-manufactured technologies off American roads,” she added, referring to the People’s Republic of China.But Guo slammed the move, telling journalists in Beijing that China would “take necessary measures” to safeguard its legitimate rights and interests.”What I want to say is that the US, citing so-called national security, has restricted the use of Chinese connected vehicle software, hardware, and entire vehicles in the United States without any factual basis,” he told a regular press conference.”China urges the US to stop the erroneous practice of overgeneralising national security and to stop its unreasonable suppression of Chinese companies.”- ‘Trying to dominate’ -The final US rule currently applies just to passenger vehicles under 10,001 pounds (about 4.5 tonnes), the Commerce Department said.It plans, however, to issue separate rulemaking aimed at tech in commercial vehicles like trucks and buses “in the near future”.For now, Chinese electric vehicle manufacturer BYD, for example, has a facility in California producing buses and other vehicles.National Economic Advisor Lael Brainard added that “China is trying to dominate the future of the auto industry”.But she said connected vehicles containing software and hardware systems linked to foreign rivals could result in misuse of sensitive data or interference.Under the latest rule, even if a passenger car were US-made, manufacturers with “a sufficient nexus” to China or Russia would not be allowed to sell such new vehicles incorporating hardware and software for external connectivity and autonomous driving.This prohibition on sales takes effect for model year 2027, and also bans the import of the hardware and software if they are linked to Beijing or Moscow.isk-je/mtp

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