Archive
Hot Tips
-
February 14, 2025
-
Trump to Cut Defense Spending in Half,
or by some $425 billion, sending defense stocks into free fall. The comments came in the context of Trump discussing a potential conference on defense spending with China and Russia. A trojan horse comes to mind. Avoid (RTX), (LMT), (GD), (NOC) and (HON).
-
US Q4 Profits Hit Three-Year High.
With reports in from nearly 70% of the S&P 500 companies as of Wednesday, fourth-quarter earnings are estimated to have risen 15.1% from a year earlier, up from an estimate of 9.6% growth at the start of January. The S&P 500 communication services sector, which includes companies such as Meta Platforms (META) is leading estimated fourth-quarter earnings gains among sectors, with year-over-year growth of 32.2%.
-
U.S. Manufacturing Production Unexpectedly Fell
in January, weighed down by a sharp decline in motor vehicle output. Factory output dipped 0.1% last month after a downwardly revised 0.5% rebound in December, the Federal Reserve said on Friday. Production at factories increased 1.0% on a year-on-year basis in January. Manufacturing, which accounts for 10.3% of the economy, has been recovering as the U.S. central bank started cutting interest rates in September.
-
Texas and California are the Biggest Trade War Losers.
U.S. companies are expected to pay roughly $400 billion in trade duties related to President Trump’s trade war, between existing tariffs, threatened tariffs, and a new reciprocal tariffs threat President Trump included in a new memorandum on Thursday. While costs will spread across all U.S. states and ultimately be passed along to consumers in the form of higher prices, Texas and California companies will absorb the highest bills for payment of new customs duties.
-
U.S. Retail Sales Dropped Sharply
in January, in part because cold weather kept more Americans indoors, denting sales at car dealers and most other stores. Retail sales fell 0.9 from the previous month, the Commerce Department said, after two months of healthy gains. It was a much bigger drop than economists expected and the biggest decline in a year. The average temperature in January was the lowest since 1988.
-
-
February 13, 2025
-
PPI Comes in Hot,
reversing the gains on inflation of the past two years. The Producer Price Index, a measurement of average price changes seen by producers and manufacturers, rose 0.4% on a monthly basis and 3.5% for the 12 months ended in January. That held steady with December, which was upwardly revised to 3.5% according to Bureau of Labor Statistics data released Thursday.
-
BYD Shares Soar at Tesla’s Expense.
Shares of Chinese electric vehicle leader soared on Wednesday. Essentially free self-driving technology is the reason. The company’s decision to put advanced driver-assistance technology on most of its vehicles, regardless of the cost to BYD, says a lot. Tesla has a lot to worry about. Is Elon Musk paying attention?
-
Defense Secretary Slams Defense Stocks,
telling NATO that a return to Ukraine’s pre-2014 borders is an unrealistic objective. It’s a suggestion that the US will withdraw all support. (RTX), (LMT), (GD), (NOC), and (HON) all have taken major hints. Avoid defense.
-
Cisco Beats with Strong Guidance.
The networking company reported earnings of 94 cents a share on revenue of $14 billion. Analysts surveyed by FactSet were expecting earnings of 91 cents a share from revenue of $13.9 billion. Cisco’s earnings rose from last year’s 87 cents a share, while revenue increased from $12.8 billion. Buy (CSCO) on dips as another legacy tech stock that has come back from the dead. Defense spending is not controlled by hard core isolationists.
-
Weekly Jobless Claims Fall.
Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 213,000 for the week ended February 8, the Labor Department said on Thursday. Economists polled by Reuters had forecast 215,000 claims for the latest week.
-
-
February 12, 2025
-
Core Inflation Rate Comes in Red Hot at 0.50%.
Overall advance was broad, led by shelter, food, and medicine. Shelter accounted for nearly 30% of the advance, according to the report from the Bureau of Labor Statistics out Wednesday. The so-called core CPI also climbed by more than forecast. That reflected higher prices for car insurance, airfares, and a record monthly increase in the cost of prescription drugs. It looks like no interest rate cuts for 2025.
-
Jay Powell Gives No Hint of Interest Rate Cuts Anytime Soon,
in his congressional testimony yesterday. Powell reiterated his main message from two weeks ago, when the Fed kept its benchmark rate unchanged after 1 percentage point of cumulative cuts late last year. He said that after those actions, policy is “significantly less restrictive,” and policymakers “do not need to be in a hurry” to adjust” rates further at this point. Avoid all falling rate plays like bonds, real estate, and REITs.
-
Tesla Tanks 7%,
and down 34% since December after Chinese competitor BYD announced a partnership with DeepSeek. The move is expected to accelerate BYD’s move into full self-driving. Tesla sales are falling in all major markets. Call it DeepSeek bite part 2.
-
Hedge Fund Titan Ken Griffin Warns Trump,
that his “bombastic” behavior risks damaging the US economy. He said it tears into the minds of CEOs, policymakers that we can’t depend upon America, as our trading partner.” Griffin, who voted for Trump and was a megadonor to Republican politicians, believes the hostile dynamics caused by punitive tariffs could make long-term investments challenging for multinational companies and investors.
-
Denmark Makes a Bid for California,
in response to Trump's efforts to buy Greenland. Some 200,000 Danes have signed a petition. No price was mentioned. Personally, I am completely in favor of more Danish women migrating to the Golden State.
-
-
February 11, 2025
-
Wall Street Souring on Magnificent Seven.
The market stronghold has diminished slightly, as the cohort struggles to meet ever-loftier expectations, and investors rotate into other parts of the market such as small caps. Tech titans also took a hit in late January after the emergence of Chinese startup DeepSeek raised concern over how much spending will be needed to implement AI capabilities.
-
Government May Revalue Gold Holdings,
from the 1932 price of $42 an ounce to $2,936 currently. As of January 2025, the United States government owned 8,133.46 tons of gold worth $39.9 billion at current market prices. This makes the US the country with the largest gold reserves in the world. The New York Fed uses the United States official book value of $42.2222 per troy ounce for gold holdings. Why is this happening, and what will the market effects be except to improve the paper value of the US balance sheet? Will the government sell gold to finance tax cuts for the wealthy?
-
Government to Stop Minting new Pennies.
With copper at current prices, it costs two cents to mint one penny. The U.S. Mint reported losing $85.3 million in the 2024 fiscal year that ended in September on the nearly 3.2 billion pennies it produced. Every penny cost nearly $0.037 — up from $0.031 the year before. When the government has done this in the past, prices rise as retailers will market prices up to the nearest five cent number, and not down.
-
Market is Giving Up on any Interest Rate Cuts this Year,
as the prospects of rising inflation from trade wars weigh on the market. Economists have warned that a wide-scale trade war could significantly raise prices, and consumers appear to be worried as well. Respondents to the University of Michigan’s consumer sentiment poll released Friday indicated they expect inflation to run at a 4.3% rate a year from now, up a full percentage point from the January reading.
-
McDonalds is Selling More Burgers Abroad than in the US.
Is it the Ozempic effect?
-
-
February 10, 2025
-
US to Announce European Tariffs this Week,
tanking stocks on Friday. Steel and metals shares are surging this morning. It’s pretty clear that markets hate all things tariff-related. Can we talk more about deregulation, which markets love? The reality is that markets don’t know how to price in Trump, swinging back and forth between euphoria one moment to Armageddon another. Best case, markets flatline. Worst case, they crash.
-
Gold Headed for $3,000,
my long-term target, on central bank and flight-to-safety buying. What’s the next target? $5,000 if the current turmoil in Washington continues. Notice that it’s the physical metal that’s moving, not the miners.
-
Mass Layoffs Threaten SEC,
as the agency focus shifts to promoting crypto. Expect securities fraud and theft to explode.
-
Foreign Investors Continue to Soak Up US Debt,
seeking higher interest rates in an appreciating currency. Americans own 55% of the outstanding $36 trillion in US debt, while foreign investors own 24%, and the Federal Reserve 13%.
-
Trade Wars are Pushing Up the US Dollar,
making American exports more expensive. High import duties will shrink US imports dramatically and impoverish our foreign customers.
-
