MARKET RECAP

• 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.

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