Archive
Hot Tips
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February 20, 2025
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Washington DC Economy is in Recession.
Unemployment claims are up 400% YOU, home prices are down 10%, and the commute is noticeably lighter. Condition will get much worse before it gets better. Will it spread to the rest of the country? A lot of rural states are far more dependent on Washington than they realize. Alaska, Montana, Louisiana, Wyoming, and Kentucky are the top six per capita recipients of federal government money. Four out of five voted for Trump in 2024. California and Vermont received the least.
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Goldman Sachs Gets Whacked,
down $25, or 3.9%, along with the rest of the financial sector. The new administration has decided to continue with Biden’s ultra-tough mergers & acquisitions policy, which is pro-consumer and anti-monopoly. (GS) is still a great company and the deregulation story still applies, but the bloom is off the rose.
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Cruise Line Shares Get Sunk,
which big losses in (CCL) and (RCL). The New Commerce Secretary indicated that their tax-free status may end. The ships are registered in Bermuda and employ all-foreign crews buy almost all of the passengers and revenues come from the US.
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Walmart Gets Crushed,
with the shares down 7%. Nobody wants to take the risk that tariffs get implemented where (WMT) would take the biggest hit.
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Weekly Jobless Claims Jump 5,000,
to 219,000. A big surge is coming from newly laid-off government workers.
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February 18, 2025
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Goldman Boosts Gold Forecast,
to $3,100 per ounce, up from $2,890 previously. Spot gold gained on Tuesday after hitting a record high at $2,942.70 per ounce on February 11. Bullion has hit eight record highs so far this year and is up 11% so far on an annual basis. Buy (GLD) on dips.
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Homebuilders are Panicking Over Tariff Prospects.
Sentiment among the nation’s single-family homebuilders dropped to the lowest level in five months in February. The drop was largely due to concern over tariffs, which would raise homebuilder costs significantly. Sales expectations in the next six months took a major hit in the National Association of Home Builders’ Housing Market Index.
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Silver is Catching Up with Gold,
which hit a new all-time high weeks ago. Usually, silver outperforms gold by 2:1. But Chinese savers are after the yellow metal, not the white one, as are central banks. Silver depends more on industrial uses and alternative energy, while is seeing all subsidies eliminated. Buy (GLD) over (SLV).
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Airbnb Shares Jump 13% on Earnings Beat.
Travel companies have been helped by healthy demand in Asia, especially from Chinese consumers visiting destinations in Southeast Asia. Airbnb said that nights booked by outbound Chinese tourists rose 25% in the fourth quarter. It also saw a 30% growth in nights booked for domestic travel in Latin America, led by Brazil, compared to last year. First-time bookers in the region grew by nearly 15% sequentially. Keep in mind that my home away from home only posts positive reviews of its properties and deletes the negative ones. It’s amazing how much you can dress up a slum property with good pictures.
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Intel Gained 11%
on speculation that the iconic chipmaker could be broken up in a deal involving Taiwan Semiconductor Manufacturing (TSMC) and Broadcom (AVGO). (TSMC) might operate Intel’s US factories and own a controlling stake in the venture. Broadcom may make a bid for Intel’s chip-design and marketing business. Avoid. Leave this one to the risk-ab boys.
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February 14, 2025
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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).
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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%.
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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.
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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.
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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.
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February 13, 2025
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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.
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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?
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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.
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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.
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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.
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February 12, 2025
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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.
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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.
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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.
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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.
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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.
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