MARKET RECAP

• 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.
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