Finance
DeepSeek sell-off reminds investors of the biggest earnings story holding up the stock market
Monday’s swift sell-off in the markets serves as a reminder for not only what’s been the driving force of the bull market thus far, but also what investors have been expecting to come in 2025. It’s all about big tech earnings.
New developments from Chinese artificial intelligence DeepSeek sparked the rout as investor concerns over brewing competition in the AI space for Nvidia (NVDA) and other big tech names prompted pause in the US AI trade.
Nvidia stock dropped more than than 11%. Meanwhile fellow “Magnificent Seven” members Microsoft (MSFT), Alphabet (GOOGL,GOOG), Meta (META), Amazon (AMZN) and Tesla (TSLA) were all off 2% or more in early trading. Broadcom (AVGO), another large player in the AI space, was down more than 12%.
“When expectations are high, one skeptical headline can knock the market off its axis,” Ritholtz Wealth Management chief investment strategist Callie Cox wrote in a note on Monday. “That’s exactly what we’re seeing today.”
A slowdown in Big tech’s rapid earnings growth has been a risk to the market that strategists have been talking about for more than a year. With with index valuations near multi-decade highs and the 10 largest stocks comprising nearly 40% of the S&P 500, strategists have argued the rapid rally in stocks is increasingly on thin ice.
But unlike other risks like higher interest rates or sticky inflation, there hasn’t been a clear story for why the exceptional Big Tech earnings growth story would collapse. For now, this weekend’s DeepSeek AI model launch appears to be a tangible reason for investors to question whether the high earnings expectations will truly follow through.
In 2024, Magnificent Seven earnings outperformed the rest of the S&P 500 index by 30 percentage points, per research from Goldman Sachs. And while that margin is expected to slow in the year ahead, causing some to call for a broadening out of stock market returns, big tech earnings growth remains a key pillar of the bull market thesis.
The “Magnificent Seven” stocks are expected to grow earnings by 21.7% in the fourth quarter compared to the 9.7% earnings growth projected for the other 493 tech stocks. The year-over-year growth rate for the “Magnificent Seven” is expected to slow in the first quarter, before accelerating once more to year-over-year earnings growth of more than 24% in the third quarter.
As Venu Krishna, head of US equity strategy at Barclays, pointed out in his 2025 outlook, given the large earnings growth expected for Big Tech throughout the year, the group is “likely to remain as critical of an EPS growth driver for the S&P 500 as the group was [in 2024].”
Finance
Building a scalable finance function at Coca-Cola Europacific Partners
Implementing the “Future of Finance Academy”
KPMG in the UK worked with CCEP to co-create a comprehensive learning program for senior managers and associate directors in its finance function. We began by developing a strong understanding of the unique business context in which the company and its finance team operate.
This also helped us determine the best mode of delivery for its globally distributed finance function and identify opportunities to stretch CCEP’s ambitions further.
For example, the KPMG team proposed turning the final module of the course into a showcase presentation. Trainees applied what they had learned to real business challenges and presented their solutions to the board in a business pitch-style competition. Although this added to finance leaders’ already demanding workload, it proved to be one of the course’s most successful elements, enabling participants to put their new skills into practice.
Before work on the Academy began, KPMG developed a detailed plan setting out how the two teams would work together, ensure consistency across the learning modules, maintain quality assurance, and manage changes to scope.
KPMG professionals then collaborated closely with CCEP to co-create bespoke learning content, with CCEP’s senior finance leaders acting as subject matter experts alongside our own finance specialists.
Finance
Bangladesh Says $300 Billion Climate Finance Goal Falls Short, Calls for More Support
Finance
EU and Hong Kong in talks on new financial services dialogue, envoy says
Senior officials from the European Union and Hong Kong are in talks to launch a financial services dialogue, with companies from the bloc keen to explore opportunities in the Northern Metropolis, its top representative in the city has said.
Ambassador Harvey Rouse, head of the EU Office in Hong Kong, made the remarks at the Greenway 2026 forum on Tuesday, where he highlighted opportunities for cooperation on sustainable innovation and the green transition.
In a keynote address, Rouse said Hong Kong had established itself as one of Asia’s leading centres for green and sustainable finance, and that, as “two of the world’s leaders” in this field, both sides had an opportunity to deepen cooperation.
“Indeed, this cooperation is already under way,” he said.
“Senior exchanges between Hong Kong and the European Commission have intensified over the past year with visits of EU officials to Hong Kong and vice versa. Both sides are looking at starting soon a financial services dialogue to enhance cooperation.”
Rouse said European firms could also provide investment and expertise to support Hong Kong’s green transition.
“This is particularly relevant as Hong Kong develops the Northern Metropolis,” he said, referring to the city’s 30,000-hectare (74,131-acre) megaproject near the border with mainland China.
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