HigherIQ — Tuesday, January 20, 2026

Good morning, it's Tuesday, January 21st, 2026. Markets reopen today after the long weekend, and American investors will finally get to react to a flood of headlines from the last 48 hours. Let's get into it. We're going to start with something that should matter to anyone thinking about their career, their portfolio, or both: software stocks are getting crushed, and it's not random. The iShares Expanded Tech Software ETF dropped nearly 6 percent last week, with Salesforce, Adobe, and Intuit all falling more than 10 percent. What makes this unusual isn't the decline itself — it's that the broader market is doing fine. The S&P 500 is up more than 1 percent year-to-date while software stocks crater. Based on data going back to 2001, that kind of divergence happens less than 3 percent of the time. The catalyst: a wave of AI agent products, most notably Anthropic's Claude Code and Claude Cowork, have investors repricing what software companies are actually worth. Doug O'Laughlin, president of SemiAnalysis, wrote a piece last week arguing that Claude Code represents "the ChatGPT moment repeated" — that the same way ChatGPT redefined what consumers expected from AI, Claude Code is redefining what developers and businesses expect from software tools. The fear is straightforward: if an AI agent can plan, execute, and ship real work across files and workflows, then the SaaS layer that used to sit in the middle becomes optional. Why pay for a workflow tool if an agent can build you one on the fly? Companies like Salesforce, Adobe, and Atlassian — which once traded at 40 times sales in 2021 — have compressed to below 5 times sales. The market is treating them like utilities, not growth stories. Here's what this means for you: if you work in software, the next few years will reward people who can work with AI, not just alongside it. If you're investing, the marginal corporate dollar is going directly to AI infrastructure rather than software licenses — and investor dollars appear to be following. The winners are the companies building the foundation. The losers are the ones whose value proposition can be replicated by an agent. Now let's talk about Greenland, which somehow keeps escalating. Over the weekend, PBS News obtained a text message President Trump sent to Norway's Prime Minister Jonas Gahr Støre. In it, Trump said that because Norway "decided not to give me the Nobel Peace Prize for having stopped 8 Wars PLUS, I no longer feel an obligation to think purely of Peace." He added that "the World is not secure unless we have Complete and Total Control of Greenland." A couple of important clarifications: the Norwegian government doesn't award the Nobel Peace Prize. That's handled by an independent five-member committee appointed by Parliament. And the most recent prize was awarded for 2024, before Trump's second term began. Støre responded publicly, noting he had "clearly explained, including to President Trump, what is well known: the prize is awarded by an independent Nobel Committee and not the Norwegian Government." With US markets closed for MLK Day on Monday, European markets bore the brunt of the reaction. The STOXX 600 fell 1.2 percent as investors moved into safe-haven assets. Gold hit a fresh record high above $4,689 per ounce. Silver climbed 3.6 percent to $94. Both metals are up more than 6 percent in 2026 already, extending rallies that saw gold gain 64 percent last year and silver surge 146 percent. The EU is preparing retaliatory tariffs up to $108 billion if Trump's 10 percent duties on eight European countries take effect February 1st as scheduled. An emergency EU summit is set for Thursday. NATO Secretary General Mark Rutte says he'll meet with Trump at Davos this week to discuss the situation. Treasury Secretary Scott Bessent, speaking in Davos, called the Nobel Prize explanation "a complete canard." But when asked whether military force remained on the table for Greenland, Trump's response was: "No comment." Speaking of AI companies navigating business model challenges: OpenAI announced Friday that it's rolling out ads in ChatGPT. The ads will appear at the bottom of responses for free users and ChatGPT Go subscribers — the $8-per-month tier that's now available globally. Plus, Pro, Business, and Enterprise subscribers will remain ad-free. OpenAI says ads won't influence ChatGPT's responses and that it won't sell user conversation data to advertisers. Users under 18 and queries about sensitive topics like health or politics will be excluded from ads. This has been a long time coming. OpenAI CEO Sam Altman said in a 2024 interview that he "hates" ads and called the idea of combining them with AI "uniquely unsettling." But the company is burning cash: it's on track for a $20 billion revenue run rate while having committed to $1.4 trillion in AI infrastructure spending over the next eight years. Only about 5 percent of ChatGPT's 800 million monthly users pay for subscriptions. Advertising is how you monetize the other 95 percent. The strategic question is whether this erodes trust. ChatGPT's value has always been that the answer isn't trying to sell you something. OpenAI insists that won't change. But as one analyst put it: "Ads aren't a distraction from the AI race — they're how OpenAI stays in it." Here's a demographic story with long-term economic implications: China's birthrate just hit its lowest level since the founding of the People's Republic in 1949. The numbers released Monday are striking: only 7.92 million babies were born in 2025, down 17 percent from the prior year. The birth rate dropped to 5.63 per 1,000 people. The total population fell by 3.4 million to 1.404 billion — the fourth consecutive annual decline. China's fertility rate is now estimated at around 1.0, half the 2.1 replacement rate needed to maintain a stable population. This is happening despite aggressive government efforts to reverse the trend. Beijing has tried cash subsidies, extended maternity leave to 158 days, eliminated taxes on matchmakers and daycare centers, and even started taxing condoms. None of it is working. The structural issues — a slowing economy, reduced job prospects, difficulty buying homes, and the high cost of raising children — aren't being addressed by policy tweaks. The economic implications are severe. China now has 323 million people over age 60, representing 23 percent of the population. That number keeps rising while the working-age population shrinks. The phrase you hear is that China is "getting old before it gets rich." For a country trying to compete with the US on technology and manufacturing, a shrinking workforce is a fundamental constraint. On the topic of AI infrastructure: data centers are now driving commercial construction. FMI Corporation forecasts that spending on data center construction will increase 23 percent in 2026, pushing the sector to more than 6 percent of all nonresidential building activity — up from just 2 percent in 2023. Meanwhile, spending on offices, hotels, apartments, and warehouses is expected to decline. The cash flowing from Amazon, Google, Oracle, and other hyperscalers is so substantial that construction consulting firm FMI's Jay Bowman told the Wall Street Journal: "The cash is not an issue for these people." This connects to the memory shortage story we covered yesterday. Every major memory manufacturer is allocating capacity to high-bandwidth memory for AI data centers, which is why your laptop might cost more this year. The AI buildout is reshaping physical infrastructure at a scale that's starting to affect adjacent industries. One construction company president noted that while most major commercial projects need hundreds of workers, data centers can require thousands — and cost north of a billion dollars. One more infrastructure story: the New York Stock Exchange announced Monday it's building a platform for 24/7 trading of tokenized stocks and ETFs using blockchain technology. The platform will enable instant settlement, fractional share trading, and stablecoin-based funding. NYSE is working with BNY and Citi to support tokenized deposits that would allow clearing members to transfer money and meet margin obligations outside traditional banking hours. This is NYSE's response to Nasdaq, which announced in December it was planning near-round-the-clock trading to match the increasingly global nature of financial markets. The launch is pending regulatory approval, with NYSE targeting later this year. It's a significant legitimization of blockchain technology from one of the oldest financial institutions in the world. Quick hit: In case you missed it last night, Indiana beat Miami 27-21 to win its first national championship in school history. Fernando Mendoza, who won the Heisman Trophy this season, sealed it with a diving fourth-down touchdown run in the fourth quarter. Mark Cuban, an IU alum who made his first donation to the athletic program just last year, was in attendance. Two seasons ago, Indiana was 3-9. Last night they completed a perfect 16-0 season. The parity thesis we discussed yesterday? It just got validated. Looking ahead: Davos continues through Friday. Trump speaks tomorrow and is expected to address housing affordability, tariffs, and Fed independence. The Supreme Court hears oral arguments tomorrow on whether Trump followed the law when he tried to fire Fed Governor Lisa Cook — Jerome Powell plans to attend. Thursday brings PCE inflation data and the EU emergency summit on tariffs. Netflix reports earnings today after the bell. Stay curious, stay informed, and we'll see you tomorrow.