U.S. stock futures declined on Monday after a positive close on Friday. Futures of major benchmark indices were trading lower.Tensions flared up at the Federal Reserve after the Chair Jerome Powell said on Sunday that the Department of Justice had threatened the central bank with "criminal indictment" over his testimony before Congress, relating to its building renovation costs. This marks a major escalation in tensions between President Donald Trump and the central bank. On Friday, nonfarm payrolls increas ...

Market Overview - U.S. stock futures declined on Monday following a positive close on Friday, with major benchmark indices trading lower [1] - The Dow Jones fell by 0.78%, S&P 500 by 0.76%, Nasdaq 100 by 1.04%, and Russell 2000 by 0.57% [4] - The SPDR S&P 500 ETF Trust (SPY) was down 0.69% at $689.25, while Invesco QQQ Trust ETF (QQQ) declined 0.95% to $620.77 [4] Employment Data - Nonfarm payrolls increased by 50,000 in December, slightly below expectations of 60,000 and mostly unchanged from November's revised gain of 56,000 [2] Treasury Yields - The 10-year Treasury bond yielded 4.19%, while the two-year bond was at 3.53% [3] - Markets are pricing a 95% likelihood that the Federal Reserve will keep interest rates unchanged in January [3] Company Performance - Vistra Corp. (NYSE:VST) rose 0.69% after signing a 20-year nuclear power deal with Meta Platforms Inc. (NASDAQ:META) [7] - Alibaba Group Holding Ltd. (NYSE:BABA) increased by 4.44% as its Cloud's Qwen series became the most widely used open-source AI system, surpassing 700 million downloads [7] - Tempus AI Inc. (NASDAQ:TEM) jumped 8.12% after reporting a record $1.1 billion in total contract value and approximately 126% net revenue retention for 2025 [7] - Xpeng Inc. (NYSE:XPEV) gained 2.75% after unveiling its global 2026 P7+ flagship and reporting 126% delivery growth in 2025 [14] - Boot Barn Holdings Inc. (NYSE:BOOT) shares were down 0.37% despite reporting preliminary third-quarter net sales of $705.6 million, representing a growth of 16.0% over the prior year [14] Economic Insights - Mohamed El-Erian noted a "frantic start to the year" with a contrast between geopolitical instability and resilient capital markets [10] - He highlighted a troubling "decoupling of employment from growth," with robust GDP growth potentially exceeding a 5.4% pace [12] - El-Erian anticipates a "flood of fresh data" that will test market optimism, particularly regarding inflation trends and economic momentum [12]

Core Viewpoint - Both Alibaba and Amazon are leveraging artificial intelligence (AI) to enhance growth in their cloud computing and e-commerce sectors, with Alibaba focusing on a turnaround strategy and Amazon emphasizing operational efficiency [1]. Alibaba - Alibaba is investing heavily in its core e-commerce platforms, Tmall and Taobao, to boost gross merchandise volume (GMV) growth, resulting in a 9% year-over-year increase in e-commerce revenue and a 12% rise in third-party revenue [3]. - The Cloud Intelligence segment of Alibaba saw an 18% year-over-year revenue increase, with AI-related revenue more than doubling for the seventh consecutive quarter, and adjusted EBITA surged by 69% [4]. - Alibaba's AI initiatives are driven by its Qwen series of models, including the latest Qwen3, which combines traditional large language model capabilities with advanced reasoning [5]. - The international commerce segment (AIDC), which includes AliExpress and Trendyol, grew revenue by 22% last quarter, with expectations of profitability within the next year [6]. - Alibaba's stock trades at approximately 12 times forward earnings, with nearly $20 billion in net cash and $57 billion in equity investments, indicating significant upside potential if sentiment around Chinese equities improves [7]. Amazon - Amazon is characterized by relentless operational execution, with its market cap at $2 trillion, continuously finding ways to increase revenue and margins [8]. - Amazon Web Services (AWS) remains a key growth driver, with revenue increasing by 17% year-over-year to $29.3 billion, and operating income growing by 23%, largely due to AI demand [9]. - AI is being integrated across Amazon's ecosystem, enhancing efficiencies in warehouses, logistics, and e-commerce, leading to improved operating leverage [10][11]. - Amazon's North American revenue rose 8% in Q1, with operating income increasing by 16%, indicating strong performance as AI initiatives are still in early stages [11]. - Amazon trades at a forward P/E of 34.5 times, which is significantly higher than Alibaba's valuation [11]. Investment Perspective - Alibaba presents more potential upside due to its successful turnaround in e-commerce, leadership in AI within China, and growth prospects in the AIDC business, all while trading at a discount to Amazon [12]. - Amazon is viewed as the safer investment option, with a proven track record of operational success and willingness to invest for long-term gains, despite facing typical retail risks [13]. - For investors seeking higher potential returns, Alibaba is recommended, while Amazon offers a more stable risk-reward profile [14].