Review — Barron's

By Andrew Bary

A retired Iowa accountant won the 2024 Barron's forecasting challenge, topping more than 1,400 entrants in the annual quiz.

Tim Breitbach, who lives in a Des Moines suburb, got a score of 10 out of a possible 18. The contest, which ran in late 2023, consisted of 16 questions about the coming year's economy and markets.

Breitbach, 66, is a seasoned investor who goes for "singles and doubles and not home runs." Among his favored strategies is the use of covered-call writing strategies involving individual stocks to generate income.

He was the only entrant to get a score of 10. Nobody has come close to a perfect score in the more than 20 years of the annual contest. I got a score of three, below the average of four.

Several questions proved tough. Only 8% of respondents predicted that the S&P 500 index would return over 20% during 2024. Less than 1% forecast that Walmart would be the top stock in the Dow Jones Industrial Average in 2024. And just 30% of respondents to a multiple-choice question predicted that Donald Trump would win the presidency.

Breitbach wins a two-year Barron's subscription and lunch in New York with a Barron's staff member of his choice.

The 2025 forecasting challenge proved popular. We received more than 4,000 entries. We'll announce a winner in early 2026.

Write to Andrew Bary at andrew.bary@barrons.com

Last Week

Markets

The week opened with Colombia and the U.S. avoiding a tariff war by agreeing to a deal on deportations. Tech took a beating over a new, cheaper Chinese artificial-intelligence player, DeepSeek; Nvidia shed $600 billion. Stocks stabilized, then fell, as the Federal Reserve paused rate cuts on policy uncertainties. The White House said tariffs on Canada, Mexico, and China would be levied on Saturday. On the week, the Dow industrials ticked up 0.27%, the S&P 500 fell 1%, and the Nasdaq Composite lost 1.6%.

Companies

The administration backed off a budget-office freeze on federal payments passed by Congress that triggered an uproar. Tesla joined BMW and Chinese car makers in suing the European Union over tariffs on Chinese imports. OpenAI suggested DeepSeek might have used its model to train its rival, and Alibaba released a new AI model, saying it surpassed DeepSeek's. OpenAI began talks with investors, including SoftBank, to raise as much as $40 billion. ASML and Meta Platforms beat on earnings; Microsoft and Tesla didn't. Apple barely beat despite falling China iPhone sales. IBM beat.

Deals

Activist investor Ancora launched a proxy fight with U.S. Steel, attempting to win nine board seats, oust the CEO, and drop efforts to merge with Nippon Steel...President Trump said Microsoft was a contender to buy TikTok; other would-be buyers circled... KKR built a 12% stake in medical and dental distributor Henry Schein, getting two board seats.

Next Week

Monday 2/3

The Institute for Supply Management releases both its Manufacturing and Services Purchasing Managers' Indexes for January. Consensus estimates are for a 49.9 reading for the Manufacturing PMI, released on Monday, and a 54.8 reading for the Services PMI, released on Wednesday. Both estimates would be slightly higher than the December figures.

Tuesday 2/4

Roughly 120 S&P 500 index companies report in the busiest week for the fourth-quarter earnings season. Advanced Micro Devices, Alphabet, Amgen, Merck, PepsiCo, and Pfizer announce earnings on Tuesday, followed by Qualcomm, Uber Technologies, and Walt Disney on Wednesday. Amazon.com, and Eli Lilly release quarterly results on Thursday.

The Bureau of Labor Statistics releases the Job Openings and Labor Turnover Survey. The consensus call is for 8.02 million job openings on the last business day of December, nearly 100,00 less than in November.

Friday 2/7

The BLS releases the jobs report for January. Economists forecast a 170,000 increase in nonfarm payrolls, after a 256,000 gain in December. The unemployment rate is expected to remain unchanged at 4.1%.

The Numbers

$162 B

Volume of private-equity stakes sold off in 2024 on secondary markets, up 45% from 2023 and a record.

450

Consecutive number of days average sea surface temperatures were at record highs in 2023 and 2024.

215

The average 2024 fourth-grade reading score, down from 217 in 2022 and 220 in 2019. Math fared better.

10.8 M

Number of vehicles sold by Toyota in 2024, tops globally for the fifth straight year, despite a 3.7% drop in sales.

Write to Robert Teitelman at bob.teitelman@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

By Teresa Rivas

There's only so much a market can take.

This past week, stocks careened from panic over China's DeepSeek chatbot to Big Tech earnings to the latest Federal Reserve meeting, only to look like they would emerge unscathed. Then came the tariff threats.

The S&P 500 index finally finished the week down 1%. That's still noteworthy, considering how hard the artificial-intelligence theme and Nvidia's stock — one of the key drivers of the market's strength — were hit.

Monday's rout reflected the market's anxiety that if a scrappy open-source Chinese model really can match ChatGPT, AI could be significantly cheaper than previously anticipated. That's a potential boon to users but a blow to the megacap tech stocks pouring billions into their own projects — and the idea that American AI was leaps and bounds ahead of the rest of the world.

It's a big shift, though it remains to be seen just how much changes because of it. "[We] are still shocked that tech investors believe the Temu of AI DeepSeek is going to dramatically alter the $2 trillion of AI [expenditures] expected over the next three years," writes Wedbush analyst Dan Ives.

Almost immediately, attention turned to earnings from Meta Platforms, Tesla, Apple, and Microsoft. They did their best to reassure the market, with the first three succeeding and the last falling short. Overall, though, investors took some comfort from management commentary. Many even looked on the bright side.

Yet for all the fears about Silicon Valley's AI supremacy, the S&P 500 index was nearly unchanged for the week through Thursday's close: It hadn't revisited Monday's low point, and there were 333 gainers in the index, compared with 169 stocks that lost ground. "The fact that short-term breadth remains solid is a sign of market strength," noted Ned Davis Research strategist Ed Clissold.

The economic data, too, seemed to line up OK, writes Sevens Report President Tom Essaye. From a weak, but not too weak, fourth-quarter gross-domestic-product reading to strength in consumer spending, it was "mostly Goldilocks," he writes. And even the Federal Reserve, seemingly in wait-and-see mode, didn't shake things up and ended up having little impact on stocks.

Nonetheless, it's rarely a quiet day now in Washington, D.C., and a sustained rally is never a sure thing. On Friday, President Donald Trump reiterated that 25% tariffs on Mexico and Canada were probably coming, and that fact turned a nice rally into a drop on Friday as his rhetoric heated up.

"[It] is U.S. trade policy that has again stolen the headlines," writes James Reilly, senior markets economist at Capital Economics. "It is unclear what tariffs, if any, will be announced this weekend; but what seems clearer is that it will not stop here."

Maybe it's time to take a vacation.

Write to Teresa Rivas at teresa.rivas@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.