The SP500 was up by 1.47% and the NASDAQ by 2.58%.
The SP500 traded above its all time closing high of 6118 but did not close higher.
Trump’s up and down announcements on tariffs and DOGE’s bull in a China shop approach are putting some fear into investors, something is bound to break.
The CPI came in higher than expected, up 3% year over year. The last thing the economy needs to know is a resurgence of inflation but a carry through on the tariff threat might just lead to that.
Stocks were down by 0.20%, and bonds were up by 0.39%.
The tariffs on Canada and Mexico that Trump threatened last week were delayed by 30 days.
Job openings fell to 7.6 million in December, a 3-month low. New hires totaled 143,000, a little bit less than expectations. Unemployment declined to 4.0% from 4.1%. Wages were up year over year by 4.1%.
The University of Michigan survey shows that respondents expect inflation to be 4.3% on year from now, leading to a Friday sell-off.
US stocks were down by 0.90% for the week, and bonds were up by 0.40%.
NVDA had a record market cap loss on Monday when the market decided to pay attention to Deep Seek, a Chinese AI application that apparently is as good as American models like ChatGPT and Gemini, and produced at a fraction of the cost. The NASDAQ fell by 3.1% on the day.
Trump is carrying through on his tariff threat, a bad idea that will harm the economy. Putting a 25% tariff on Canada and Mexico and 10% on China, with the EU to follow. Stocks turned down on Friday after the comments. According to Census Bureau data, Canada and Mexico combined for 28% of US imports. In Trump’s make-believe world, there will be no inflationary impact. We agree with many Trump policies, but he is way off-base on this one. Trump’s bullying is going to hurt America long-term, making China seem like a stable partner.
The Fed did not change interest rates.
Inflation forecasts have been slowly rising. Economists estimate 2.6% compared to 2.2% before the election.
Trump was inaugurated, and markets rallied. The SPX was up 1.74% and hit its first record high of 2025 on Thursday.
Trump launched a crypto coin in his name and then one for the first lady, indicating that traditional ethics don’t matter. But who would expect otherwise?
Trump held off closing down TikTok for 75 days and issued pardons to all of the January 6th rioters, even the most violent ones.
Trump announced a $500 billion infrastructure investment by OpenAI, Oracle, Softbank, and a UAE-based company.
At a virtual address at the World Economic Forum, Trump said “I’ll demand that interest rates drop immediately.” Trump is also going to press OPEC to cut prices.
Bitcoin hit a record of 109,000 on Monday but has since fallen back to 101,000.
There were no immediate tariffs on day one, so that helped markets. But indicated that may change on February 1 in regards to Mexico and Canada.
The SPX earnings yield is 4.1% versus a 10-year yield of 4.63%,the biggest disparity since 2002.
US stocks were down by 2.22%, international stocks by 2.94%, and bonds by 0.66%.
The Dow ended a 10-day losing streak on Friday, the longest since the 1970s.
The Fed cut interest rates by 25 points, but Powell’s “hawkish” commentary, even though we thought it was telegraphed beforehand, sent markets into a tailspin, with the Nasdaq and SP500 falling by more than 3% at its low. It was the worst performance by the equity markets on a Fed Day since 2001.
The 10-year treasury is at 4.54% and is up 34 basis points this month.
Bitcoin broke 108,000 on Tuesday but is 95,600 as of this writing (Sunday afternoon).
