Alibaba unveiled its latest AI reasoning model with fewer parameters. (0:15) Trade deficit soars as tariffs worries juice imports. (1:09) No Jack Daniel's worse than a tariff. (4:45)Show NotesLayoffs soar as DOGE bitesMarvell shares tumbleEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Full Episode
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Thursday, March 6th, and I'm your host, Kim Kahn. Our top story so far.
Chinese companies are continuing to make big strides in artificial intelligence, as Alibaba unveiled its latest reasoning model with fewer parameters, which rivals DeepSeek's R1 and OpenAI's O1 Mini. The new model, called QWQ32B, was developed with 32 billion parameters, referring to the training data that enables the model to generate desired outputs.
Alibaba claims QWQ32B can achieve performance comparable to DCEC's R1 model, which uses 671 billion parameters. Alibaba's Quen team evaluated the new model across a range of benchmarks to assess its mathematical reasoning, coding, and general problem solving. It more or less matched the performance of R1 and OpenAI's cost-efficient O1 mini model.
The release comes as Alibaba committed to invest over $52 billion in its cloud computing and AI infrastructure over the next three years. On the economic front, the U.S. trade deficit surged 34% to a record $131.4 billion in January, higher than the $123 billion shortfall expected and up from $98.1 billion in December as fear of tariffs caused a spike in imports.
January imports rose 10% to $401.2 billion. Wells Fargo economists say, We ultimately expect tariffs to impart a modest stagflationary impulse of slower growth and higher inflation on the U.S. economy. The degree of the shock depends on many factors, such as exclusions and how long tariffs are in place. Today's release highlights that the sheer threat of tariffs has already influenced behavior.
To the extent the surge in imports was a pull forward in demand in preparation for tariffs, we may see some payback in the coming months. Looking to the labor market ahead of Friday's jobs report, Challenger Gray and Christmas said employers announced 173,017 job cuts in February, the highest monthly total since July 2020 and the highest total for February since 2019.
The jump reflects the beginning of federal workforce and spending cuts that the Trump administration is pursuing. The February tally is more than triple the 49,795 cuts announced in January and more than double the 84,638 job eliminations announced the same month last year. But weekly initial jobless claims fell more than expected to 221,000.
Pantheon macroeconomist Samuel Toombs says, Data for claims made by former federal workers are reported separately and with a one-week lag. Unadjusted claims by former federal workers increased to 1,600 in the week ended February 22, up from 600 in the previous week. They likely rose further last week, given the faster pace of Doge job-cutting in recent weeks.
Among active stocks, Marvell Technologies plunging as traders deemed its results, which looked okay at first blush, not good enough. KeyBank Capital Markets analyst John Vinn said the results and guidance were solid, but the company's data center revenue was only in line with estimates.
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