The SPX was down by 1.7%, and the Nasdaq by 2.5% on the week. The 10-year treasury yield declined to 4.419%.
The stock market could not hold records set earlier in the week.
Gold is a few cents off its all-time high set on Thursday.
Walmart had great results but its outlook disappointed investors.
The LEI dropped by 0.3% in January.
On Friday, the Dow and SPX had their worst day of 2025.
Existing home sales dropped by 4.9% last month.
Retail sales fell in January.
The University of Michigan sentiment survey shows that 5-year inflation expectations are now at 3.5%, the highest level since the mid-1990s. Much of that is due to Trump’s tariff threats.
Niall Ferguson reminded readers of the WSJ that powers spending more on debt than the military have led to their fall.
Trump is moving way too fast. He has some good ideas but lots of bad ones, and the way he implements his ideas, in my opinion, is increasing the chances of making a mistake that will hurt the economy and the markets. With valuations at extremely high levels, there is short and intermediate-term risk in the market, and something is bound to go wrong. The way he talks about allies (like Canada and Ukraine), and the way he cozies up to Putin, are sending really bad signals that hurt America around the worrld. The DOGE effort (which could yield a lot of good) is being implemented too fast. For example, laying off 6,000 IRS employees. If one agency needs more help, it is the IRS.
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.
