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M Notes: Mon, 2-3 Thumbnail

M Notes: Mon, 2-3



Weekly Close:
1-31-25
+ (-)%Jan
%
Dow30
44,545
+121
+0.3%
+4.7%
S&P500
6,041
-60
-1.0%
+2.7%
Nasdaq
19,627
-327
-1.6%
+1.6%
10-year
4.57
-0.05
-1.1%
+0.0%
Oil
72.53
-2.07
-2.8%
+1.1%


LAST WEEK:  

Markets:  The new year begins with a solid January performance.

S&P roller coaster last week:  Down significantly, Up a lot, Down, Up, and Down.

Durable goods orders:  December Orders were down -2.2% (consensus was for +0.6%), falling for the fourth time in five months.  Orders are down -3.9% Y/Y.

Fed Balance Sheet:  $6.818 Trillion.  

Fed Meeting:   The Fed decided to Pause.  After three consecutive meetings where they cut their interest rate, the FOMC moved to a “wait & see” posture.  If the Trump Administration is able to make the Tax Cut from 2017 permanent (it was a 10-year deal), that could potentially put more money in the economy.  If the Trump Administration is able to cut regulations (as they did the first time), that could potentially allow the economy to heat up further.  Rate hikes don’t appear to be on the table.  But if the Fed does eventually cut rates further, that could also heat up the economy.  As the Money Supply grows, Inflation would likely increase, not decrease.  The Fed’s 2.0% Inflation target remains elusive and not likely anytime soon.  Which means prices will remain high, and likely go higher this year.  

GDP:  The  read on Q4 GDP came in at 2.3% (consensus was 2.6%).

Housing:  New home sales were up +3.6% in December, and were up +6.7% Y/Y.  In prior weeks, Existing home sales were up +2.2% in December, and were up +9.3% Y/Y.  Even though the ending numbers were positive, it’s the Lowest existing homes sales rate in 30 years.  Starts were up +15.8% in December, but were down -4.4% Y/Y.  

Inflation:  The December Personal Consumption & Expenditures index went up 0.3% (as expected).   The Y/Y number rose from 2.4% up to 2.6%.  

Jobless claims:  The weekly number came in at 207,000.  The four-week average came in at 213,000.

National Debt:  $36.432 Trillion.  

Tariffs:  Over the weekend President Trump placed 10% Tariff on energy resources from Canada, and a 25% Tariff on other Canadian goods.  Mexican goods received a 25% Tariff.  Chinese goods received a 10% Tariff.  Trump said the measures were in response to unfair trade practices on US goods, and a response to those countries being complicit in helping illegals and drugs enter the US.   

--------------------

THIS WEEK:

First Focus of the week:  Tariffs.   What will the Tariff effects be?   Trump has acknowledged there might be some “pain” in the short term as the measures are implemented.  Market Futures showed that Monday might be a bit bumpy.

Second Focus of the week:  Jobs and Unemployment.  The January jobs number is expecting 160,000 jobs, and the U3 unemployment number is expected to remain at 4.1%.  Both numbers come out Friday morning.

Calendar:   ISM manufacturing index (Mon); factory orders (Tue); trade deficit (Wed);  jobless claims (Thu); and the new jobs and unemployment numbers (Fri).

Earnings:  Some of the companies reporting this week:  Advanced Micro Devices, Alphabet, Amazon, Amgen, Arm Holdings, BP, Chipotle, ConocoPhillips, Disney, Eli Lilly, Ferrari, Merck, PepsiCo, Pfizer, Phillip Morris, Qualcomm, Spotify, Toyota, Uber, and UBS.