M Notes: Mon, 3-10

	Week Close: 3-7-25	+ (-)	%
Dow	42,802	-1,039	-2.4%
S&P	5,770	-184	-3.1%
Nasdaq	18,196	-651	-3.5%
10-year	4.30	+0.07	+1.7%
Oil	67.05	-2.71	-3.9%

LAST WEEK:

Markets:   Tariff fears cause Markets to stumble.  

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

CFPB:  The Consumer Financial Protection Bureau has 1,700 employees, at a projected cost for 2025 of $820 Million.  Can we still have effective “financial cops” at say 200 employees and a cost of $100 Million ?  If so, that would save Taxpayers over $700 Million per year.  

Factory orders:   The December number was revised from -0.9%, up to -0.6%.  January expectations were for +1.4%, with the actual number coming in at +1.7%.

Fed Balance Sheet:  $6.757 Trillion.  

ISM:  The Institute for Supply Management’s Manufacturing index (30% of our economy) dropped from 50.9, down to 50.3.  ISM’s Services index (79% of our economy) rose from 52.8 up to 53.5.  A number below 50 indicates a contraction, while a number above 50 implies an expansion.   

Jobless claims:  The weekly number came in at 221,000.  The four-week average came in at 224,000.

Jobs:  Coming off of 143,000 jobs in January (adjusted to 125,000), consensus was for a February jobs number of 160,000.  The actual number came in at 151,000.

National Debt:  $36.578 Trillion.  

Tariffs:  It’s a moving Target.  But Trump ran on implementing Tariffs, so no one should be surprised.  Maybe what is surprising is a politician is actually implementing policies they ran on.  And he’s doing it as quickly as he can.  It’s clear that Tariffs create a negotiation tool for Trump.  And what makes it effective is Trump will actually implement them if people don’t come to the table.  And sometimes they appear arbitrary, which also brings people (and countries) to the table. 

So why is he doing this?  A number of reasons.   

First:   Fentanyl.  It’s a real threat and it doesn’t take much to kill people.   Over 100,000 people died in the US because of it in 2023 according to the DEA.  So, measures have been implemented against Canada and Mexico.   Is it just because of Fentanyl… probably not.  But it’s the card he’s playing to get them to the negotiating table.  

 Second:   Trump feels our Country has been take advantage of, regarding trade, by the International community.  He’s seeking to level the playing field:  Reciprocal Tariffs… applying the same Tariffs other countries apply to US goods.  Is that shaking up the apple cart ?  Apparently.   But any company that makes their products in the US doesn’t have to pay the Tariffs.  And that protects the American worker.  And companies, like Apple, are now shifting some of their manufacturing back to the US.  

 Trump has acknowledged that his Tariff policies have been disruptive, and will be in the short term.  Are the Tariffs always consistent?  No.  Which makes them disruptive.  But some would argue it makes them more effective.  Critics spoke harshly against Trump’s Tariffs in his first term.  But even the Biden administration, who seemingly tried to reverse every Trump action, kept many of the China Tariffs in place.  Whether Tariffs are effective or in-effective, seems to be in the Eye of the Beholder.  

 So, will the America First Tariffs bring the results Trump is seeking?  No one knows yet.  But I’ve got my fingers crossed.  

Trade deficit:  The second read on the January Trade Deficit came in larger than expected.  The prior read was -$98 billion.  Expectations were for that to climb to -$123, but the actual number was -$131 million.  

Unemployment:  The February U3 Unemployment number (there are six numbers), rose a tick from 4.0% up to 4.1%.  

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THIS WEEK:

Focus of the week:   Inflation.  The February Consumer Price Index (consumer inflation) is expected to drop a tick from 3.0%, down to 2.9% Y/Y.  The February Producer Price Index (wholesale inflation) is expected to also drop a tick, from 3.5% down to 3.4%.  

Calendar:   CPI (Wed); PPI, and jobless claims (Thu).

Earnings:  This latest Earnings Season is just about over.   Some of the companies reporting this week:  Adobe, Oracle, and Volkswagen.