Markets see more selling as recession fears grow

Dow plunged 890 (but above the very deep session lows), decliners over advancers better than 3-1 & NAZ tumbled 727.  The MLP index was off 1 & the REIT index fell 4+ to the 408s.  Junk bond funds remained weak & Treasuries were very heavily bought which sharply reduced yields.  Oil was lower, dropping 1+ to the 65s, & gold gave back 24, taking it to 2890 (more on both below).

Dow Jones Industrials

Pres Trump declined to explicitly rule out a full-blown recession for the US economy this year, saying that the country will see a "period of transition" as his policies take effect.  "I hate to predict things like that," he said of a recession. "There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing… it takes a little time, but I think it should be great for us."  His comments come amid some business leaders' instability concerns over tariffs imposed on China, Canada & Mexico, as well as growing concerns of a potential economic slowdown.  The Atlanta Federal Reserve has predicted a contraction of -2.8% in the first qtr.  Goldman Sachs raised the expectations of a recession within the next 12 months to 20%, while  JP Morgan says the probability of a recession stands at 35%.  Commerce Secretary Howard Lutnick offered a more definitive answer yesterday when asked about the possibility of a recession.  He said he would "never bet on" one.

Trump says US will experience 'period of transition' when asked if economy could see a recession this year

Nvidia (NVDA) has lost nearly a 3rd of its value just 2 months after notching a fresh high. The leading chipmaker slumped again today, building after last week's losses as heavy selling continued across the tech sector.  The popular artificial intelligence stock has shed about a 4th of its market cap since Pres Trump’s inauguration.  Tariff fears & growth concerns have rocked technology stocks,  including NVDA, over the past week, with the tech-heavy NAZ dropping more than 4% & is at a 6-month low.   Many technology companies rely on parts & manufacturing overseas & new levies could push up prices.  That has also sparked worries of a US recession, which Trump did not rule out over the weekend.  Tesla (TSLA) led the declines among the “Magnificent Seven” names, plummeting more than 13%.  The Elon Musk-backed electric vehicle company has plunged more than 20% over the past week & shed nearly ½ its value since Trump took office in Jan.  The stock is also coming off its longest weekly losing streak in history as a public company.  Today NVDA stock fell another 5.71 & TSLA stock plunged an eye popping 40.52.

Nvidia down 30% from high as tech-led sell-off hits ‘Magnificent Seven’

The Federal Reserve won't lower interest rates at its policy meeting next week, but could deliver the first of a set of rapid-fire reductions in borrowing costs in Jun if rising fears of an economic downturn triggered by a trade war materialize.  At least that's where the betting is in futures markets, where contracts that settle to the Fed's policy rate were increasingly priced for qtr-percentage-point reductions in Jun, Jul & Oct following Pres Trump's remarks last weekend about a "period of transition" as he ratchets up tariffs on China, Canada & Mexico.  US stocks & Treasury yields also dropped today on concern that his comments signaled a coming recession.  Fed Chair Jerome Powell on Fri said the central bank is in no rush to cut rates, with the labor market still strong, inflation on a bumpy path toward the central bank's 2% goal, & uncertainty high over the effect of Trump's trade, fiscal, immigration & regulatory policies.  Economists say those policies could drive prices higher & slow the economy at least in the near term.  Goldman Sachs economists just cut their US growth forecast to 1.7% & raised their inflation forecast.  Such a scenario could force the Fed to make a tough choice between keeping pressure on inflation by leaving its policy rate in the current 4.25%-4.50% range or cutting rates to cushion the labor market against deterioration.  While markets are betting on the latter approach, some economists see the Fed slow-walking rate cuts to keep tariff-inflated prices from stoking household & business inflation expectations, which could deepen the chance of persistently high actual inflation.

Fed to deliver rapid-fire rate cuts if economic downturn happens, traders bet

Gold eased as a slight rise in the $ dented safe-haven demand amid trade war concerns, while investors awaited inflation data this week for clues on the Federal Reserve's next interest rate decision.  Spot gold fell 0.2% to $2905 an ounce, while US gold futures were steady at $2911.  The dollar index pared losses slightly after hitting a more than 4-month low on Fri. The $'s ​​strength was weighing on bullion & could bring a further correction below $2900.  Meanwhile, the focus remains on trade tensions.  In his latest warning to Canada, Pres Trump said that tit-for-tat tariffs on dairy products & lumber could be imminent.  Data showed China's consumer price index, the top consumer of the metal, missed expectations in Feb & fell at the sharpest pace in 13 months, while producer price deflation persisted.

Gold Eases As Stronger Dollar Dampens Safe-Haven Demand

Oil prices held steady as concerns over the impact of US tariff uncertainty & rising output from OPEC+ producers weighed on prices while potential sanctions on Iranian oil exports provided some support.  Brent crude was up 9¢ at $70.45 a barrel while US West Texas Intermediate crude was at $67.19, up 15¢.  Last week marked WTI's 7th straight weekly loss, its longest losing streak since Nov 2023, while Brent fell for a 3rd straight week.  Pres Trump's protectionist policies have rattled markets around the world, imposing & then delaying tariffs on its biggest oil suppliers, Canada & Mexico, while also raising duties on Chinese goods.  China & Canada have responded with their own tariffs.  Investors see the uncertainty over US tariffs as a negative, but potential sanctions on Iran & Russia could provide support in the short term.  Looking at the bigger picture, the lingering uncertainty is likely to keep the oil rally short-lived.  Oil rebounded from a 6-month low on Fri after Trump said the US would increase sanctions on Russia if it fails to reach a ceasefire deal with Ukraine.  The US is also studying ways to ease sanctions on Russia's energy sector if Russia agrees to end its war with Ukraine.  Russian Deputy Prime Minister Alexander Novak said Fri that OPEC+ could reverse the decision if there was a market imbalance.  On the supply side, Trump is also seeking to halt Iran's oil exports as part of efforts to pressure the country to rein in its nuclear program.  Iran's Supreme Leader Ayatollah Ali Khamenei said on Sat that his country would not be bullied into negotiating.

Oil Prices Steady As Tariff Uncertainty Keeps Investors On Edge

Stocks plunged as investors processed growing concerns about the health of the US economy after Pres & his top economic officials acknowledged the possibility of a potential rough patch.  Political uncertainty is expected to persist into this week, with key economic data adding to the mix of potential market-moving factors.  Updates on the inflationary picture will be in focus, with the Feb Consumer Price Index scheduled for release on Wed & the Producer Price Index set to follow on Thurs.

Markets sell-off on recession fears

Dow sank 401, decliners over advancers better than 3-2 & NAZ plummeted 656.  The MLP index rose 3+ to 316 & the REIT index added 2 to the 414s as yields dropped.  Junk bond funds drifted lower & Treasuries saw heavy buying which sharply lowered yields.  Oil slid lower in the 66s & gold was off 1 to 2913.

Dow Jones Industrials

Energy Secretary Chris Wright slammed the Biden administration's climate policies today, vowing to support natural gas production.  “The Trump administration will end the Biden administration’s irrational, quasi-religious policies on climate change that imposed endless sacrifices on our citizens,” Wright said at an energy conference.  The energy secretary dismissed the previous administration's focus on climate as “myopic.”  Natural gas is responsible for 43% of US electricity production.  There “is simply no physical way that wind, solar & batteries could replace the myriad uses of natural gas,” Wright said.  The energy secretary rejected accusations that he is climate change denier.  Wright has previously said there is no climate crisis & carbon dioxide emissions are not a pollutant.  “The Trump administration will treat climate change for what it is — a global physical phenomenon that is a side effect of building the modern world,” Wright added.  The energy secretary called Biden’s policies “economically destructive to our businesses and politically polarizing.”  “The cure was far more destructive than the disease,” he said.

Energy Secretary Wright vows to reverse Biden climate policies, says renewables can’t replace gas

Inflation could prove sticky while prices might pick up again, Federal Reserve Governor Adriana Kugler warned, signaling that the central bank should keep interest rates steady for the time.  “I’m actually quite concerned about some of the persistence in inflation that we have been seeing,” she said during a fireside chat.  She pointed to a recent acceleration of inflation expectations, which she said she watches closely for their effect on how businesses set prices & how workers negotiate wages.  This in turn means they could feed back into inflation.  Several recent data points have indicated concerns from consumers about prices increasing, with the latest Consumer Confidence Index from the Conference Board showing 12-month inflation expectations jumped to 6% in Feb, up from 5.2% the prior month.  “I have been one of those who has supported strongly any policy that really keeps inflation expectations well anchored. And I think that’s critical, and it has served us well,” Kugler continued.  Looking ahead, the Kugler indicated that prices could also rise again.  “I think you know there is reason to believe, potentially, that there could be price increases and more persistent inflation,” she noted, adding that higher prices could come from “some of the policies that maybe are being considered and some that have already been put into place.”  Such policies could also impact economic activity, Kugler said.  “We need to probably take account of some of this persistence that I mentioned, because of different categories of prices, because of inflation expectations, and potentially because some of the new policies that are ahead of us,” Kugler continued.  Touching on the frequently changing developments surrounding the administration's decision to impose tariffs on goods imported from key trading partners, including negotiations and potential retaliatory moves, Kugler said there was still “considerable uncertainty.”

Kugler says Fed should hold interest rates amid inflation risks

Treasury yields were lower as investors await a busy week of key economic data & take in the state of the US economy after comments from Pres Trump over the weekend.  The benchmark 10-year Treasury yield fell 10 basis points to 4.215% & the  2-year Treasury yield dropped by nearly 9 basis points to 3.916%.  One basis point is equal to 0.01% & yields & prices move in opposite directions.  Investor concerns picked up over the weekend, as Trump commented that his tariffs may affect US growth & didn't rule out the possibility of a recession by saying the economy was going thru “a period of transition.”  Treasury Secretary Scott Bessent made similar remarks on Fri, saying the economy may be slowing.  “Could we be seeing that this economy that we inherited starting to roll a bit? Sure.  And look, there’s going to be a natural adjustment as we move away from public spending to private spending,” Bessent said.  “The market and the economy have just become hooked. We’ve become addicted to this government spending, and there’s going to be a detox period,” he added. 

10-year Treasury slides on rising recession concerns

Stocks fell solidly as investors processed growing concerns about the health of the US economy & readied for a busy week of economic data, headlined by a report on inflation amid concerns over its resurgence under Pres Trump's unpredictable trade policy.  Mar's market struggles continue to be fueled by worries over the health of the US economy.  Those concerns have become wrapped up in Trump's ongoing trade salvo, as tariff negotiations between the US, Mexico & Canada dominate the headlines.  Yesterday Trump addressed concerns about a potential recession, describing the economy as undergoing a period of transition.

Markets rise after jobs report and Powell's speech

Dow finished up 222 in choppy trading, advancers over decliners about 4-3 & NAZ went up 126.  The MLP index rebounded 6+ to the 316s & the REIT index added 3+ to the 413s.  Junk bond funds fluctuated & Treasuries were sold which raised yields.  Oil gained about 1 to the  67s & gold gave back 13 to 2913 (more on both).

Dow Jones Industrials

Federal Reserve Bank of New York Pres John Williams said that so far there's no evidence that inflation expectations are starting to run into any form of trouble.  Based on recent data, “there is no sign of inflation expectations becoming unmoored at any forecast horizon relative to the pre-pandemic period,” Williams said in the text of remarks.  Williams, who spoke earlier this week in comments that highlighted no near-term need to change the current setting of monetary policy in an environment where trade tariffs may add to future inflation, did not comment on the monetary policy & economic outlook.  His comments came in reference to a paper presented at the conference.  Looking at the data, “a striking feature of these expectations is that they have fully returned to levels that prevailed between mid-2013 and mid-2016, before inflation expectations drifted downward during the extended low inflation experience prior to the pandemic.”  Fed officials believe the projected path of inflation exerts a strong influence on where current levels of price pressures stand.  Some recent data has been pointing to a rise in expected inflation amid the Trump administration's efforts to impose huge tariffs, import taxes that will largely be paid by Americans, that most economists expect will push inflation higher.  That said, expected inflation tracked by the New York Fed has thus far been muted.

Fed's Williams: Data points to stable inflation expectations

Federal Reserve Chairman Jerome Powell said that the central bank can wait to see how Pres Trump's aggressive policy actions play out before it moves again on interest rates.  With markets nervous over Trump's proposals for tariffs & other issues, Powell reiterated statements he & his colleagues have made recently counseling patience on monetary policy amid the high level of uncertainty.  The White House “is in the process of implementing significant policy changes in four distinct areas: trade, immigration, fiscal policy, and regulation,” he said.  “It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy.”  Noting that “uncertainty around the changes and their likely effects remains high” Powell said the Fed is “focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and are well positioned to wait for greater clarity.”  The comments seem at least somewhat at odds with growing market expectations for interest rate cuts this year.  As markets have been roiled by Trump's shifting positions on his agenda, specifically his tariff plans, traders have priced in the equivalent of 3 qtr percentage point reductions by the end of the year, starting in Jun.  However, his comments indicate that the Fed will be in a wait-&-see mode before mapping out further policy easing.  “Policy is not on a preset course,” he continued.  “Our current policy stance is well positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate.”  In his assessment, Powell also spoke in mostly positive terms about the macro environment, saying the US is in “a good place” with a “solid labor market” & inflation moving back to target.  However, he did note that recent sentiment surveys showed misgivings about the path of inflation, largely a product of the Trump tariff talk.  The Fed's preferred gauge showed 12-month inflation running at a 2.5% rate (2.6% when excluding food & energy).  “The path to sustainably returning inflation to our target has been bumpy, and we expect that to continue,” Powell said.  Fed Governor Adriana Kugler, who was not at the forum, said in a speech today that she sees “important upside risks for inflation” & added that “it could be appropriate to continue holding the policy rate at its current level for some time.”  “Wages are growing faster than inflation, and at a more sustainable pace than earlier in the pandemic recovery,” Powell said.

Powell says central bank awaiting ‘greater clarity’ on Trump policies before next move

Apple (AAPL), a Dow stock, confirmed that it's delaying the release of a new AI-infused Siri digital assistant, saying the company now expects to roll out the software sometime “in the coming year.”  The effort will give Siri “more awareness of your personal context, as well as the ability to take action for you within and across your apps,” the iPhone maker said.  “It’s going to take us longer than we thought to deliver on these features.”  A report on Feb 14 that AAPL was struggling to finish the new capabilities, which were first touted last Jun at the company's Worldwide Developers Conference ( WWDC).  At the time, the company was aiming for a May debut, a postponement from earlier plans.  The new capabilities include Personal Context, a feature that lets Siri tap into user data to help with queries, & App Intents, a mechanism for more precisely controlling applications & features across its operating systems.  When AAPL announced the features at WWDC, it didn't provide an arrival date for the Siri upgrade.  Within the company, though, the plan was to include the new technology in iOS 18.4, which comes out in Apr.  The company's artificial intelligence team has been dealing with broader challenges, including leadership concerns & engineering problems.  The stock rose 3.74.

Apple Confirms Delay of AI-Infused, Personalized Siri Assistant

Gold prices edged up, poised for a weekly gain on safe-haven inflows & a US jobs report that showed weaker-than-expected job growth in Feb, suggesting the Federal Reserve will cut interest rates this year.  Spot gold was up 0.3% at $2918 an ounce.  Bullion has gained more than 2% so far this week, as Pres Trump's ever-changing tariff policies fueled uncertainty.  US gold futures were steady at $2925.  The US dollar index was on track for its worst weekly performance since Nov 4, making $-priced bullion cheaper for foreign buyers.  The weaker-than-expected number gave gold a little lift & the weaker $ for the week helped.  A Labor Dept report showed the US economy added 151K jobs in Feb, compared with a gain of 160K expected, while the unemployment rate was at 4.1% compared with expectations of 4%.

Gold Heads For Weekly Gain On Safe-Haven Demand, Slow US Jobs Growth

Oil prices were up but retreated from session highs after Pres Trump threatened sanctions on Russia if it fails to reach a cease-fire with Ukraine.  Trump said in a post that  he was "strongly considering" sanctions on Russian banks & tariffs on Russian products because its armed forces continue attacks in Ukraine.  Brent crude futures were up $1.10 (1.6%), to $70.56 a barrel & US West Texas Intermediate futures were up $1.06 (1.6%) at $67.42.  The  markets has been overwhelmed by Russia news.  For the week, Brent was down 3.8%, its biggest weekly decline since the week of Nov 11.  WTI is set to finish as much as 3.6% down for its biggest weekly drop since the week of Jan 21.  Brent prices fell to their lowest since Dec 2021 on Wed after US crude inventories rose and OPEC+ announced its decision to increase output quotas.

Oil up, but off highs as Trump warns new Russia sanctions possible

Stocks wavered after the crucial monthly jobs report amid market uncertainty driven by Pres Trump's volatile trade policy.  Downbeat economic data has boosted bets on interest rate cuts this year.  Dow gave back 1039 last week.

Markets hesitate after jobs report and with Powell on deck

Dow dropped 180, decliners slightly ahead of advancers & NAZ retreated 138.  The MLP index was steady in the 309s & the REIT index hardly budged in the 409s.  Junk bond funds were little changed & Treasuries had limited buying which allowed yields to slip.  Oil recovered 1 to the 67s on reports the US is planning to refill its oil reserve & gold slid back 7 to 2919.

Dow Jones Industrials

The US economy added jobs at a slower pace than expected in Feb, giving the Federal Reserve more labor market data to consider as it prepares to meet later this month.  The Labor Dept reported that employers added 151K jobs in Feb, below the estimate of 160K jobs.  The unemployment rate was 4.1%, slightly higher than expectations that it would remain at 4%.  The number of jobs added in the prior 2 months were both revised, with job creation in Dec revised up by 16K from a gain of 307K to 323K; while Jan was revised down by 18K from a gain of 143K to 125K.  Taken together, the revisions reduce previously reported employment by 2K jobs.  Private sector payrolls added 140K jobs in Feb, slightly below the 142K estimated.  Federal gov employment declined by 10K jobs in Feb as the Dep of Gov Efficiency (DOGE) began to make cuts.  Across all levels of gov, employment increased by 11K, with state govs adding 1K jobs & local govs 20K jobs to more than offset the federal job losses.  Manufacturing added 10K jobs, above the estimate for a 5K gain & the retail sector shed 6K jobs in Feb & employment in the sector has shown little net change over the past year.  The labor force participation was 62.4%, having changed little over the last year & falling slightly from the 62.6% reported in Jan.  The number of people considered to be long-term unemployed, defined as being jobless for 27 weeks or more, was 1.5M – slightly higher than the 1.4M reported last month.  The long-term unemployed accounted for 20.9% of all unemployed people.  The number of workers employed part-time for economic reasons rose by 460K to 4.9M.  These workers would've preferred full-time work but were working part-time because their hours were reduced, or they could not find full-time jobs. 

US economy added 151,000 jobs last month, below expectations as the federal workforce shrinks

Treasury Secretary Scott Bessent acknowledged some signs of weakness in the US economy.  “Could we be seeing that this economy that we inherited starting to roll a bit? Sure. And look, there’s going to be a natural adjustment as we move away from public spending to private spending,” Bessent added.  “The market and the economy have just become hooked. We’ve become addicted to this government spending, and there’s going to be a detox period,” he continued.  Describing the economy as inherited is a reference to the administration under then-Pres Biden.  Under Biden, the US saw generally strong economic growth.  However, there were signs of a slowdown in late 2024, & inflation remained above the Federal Reserve's 2% target.  In its first few months, the Trump administration has taken steps to reshape global trade policies & to reduce the federal workforce.  There has not been much hard economic data reflecting Trump’s term, though consumer surveys have shown a decline in confidence.  One area where Trump's policies could be felt quickly are tariffs.  The pres has hit Canada, Mexico & China with tariffs in his first 2 months in office, though the Canada & Mexico efforts now have a lengthy list of exemptions.  The administration plans to implement broader tariffs in Apr.  “Tariffs are a one-time price adjustment,” Bessent said, pushing back against the idea that tariffs would fuel continued inflation.  Bessent also said the administration was “not getting much credit” for areas where costs have fallen since Trump’s inauguration, such as oil prices & mortgage rates.

Treasury Secretary Bessent says economy could be ‘starting to roll a little bit’

Treasury yields fell as investors digested a Feb nonfarm payrolls report that showed weaker-than-expected jobs growth.  The benchmark 10-year Treasury yield dropped more than 2 basis points to 4.261% & the 2-year Treasury yield was down more than 3 basis points at 3.931%.  1 basis point is equal to 0.01% & yields & prices move in opposite directions.  “Friday’s jobs report may change the calculus for the Federal Reserve’s plans on interest rates this year, and it’s possible that we see the next rate cut come as soon as June,” said Glen Smith, chief investment officer at GDS Wealth Management.  Federal Reserve Chair Jerome Powell is expected to speak later in the day, which investors will monitor closely for hints about future monetary policy.  Traders are also mulling Pres Trump's latest tariff reprieve.  Goods imported from Canada & Mexico into the US, & which comply with the North American trade agreement known as the USMCA, will be temporarily excluded from 25% tariffs, a White House official said.  The reprieve will last until Apr 2.  “Markets are all over the place trying to price tariff impacts, which is really hard to do when the goal post moves, disappears, and morphs by the second,” said Jamie Cox, managing partner at Harris Financial Group.

10-year Treasury yield falls after weaker-than-expected jobs growth

Stocks stumbled as investors assessed the crucial monthly jobs report amid market uncertainty driven by Pres Trump's volatile trade policy.  The stakes were high for Feb's job report as stocks flounder amid fears of weakening economic growth.

Markets get clobbered on tariff whiplash and fatigue

Dow settled down 427 after limited buying into the close trimmed losses, decliners over advancers 5-2 & NAZ tumbled 483.  The MLP index fell 4+ to the 308s & the REIT index sank 9+ to 410.  Junk bond funds remained slightly higher & Treasuries had limited selling which allowed yields to rise.  Oil crawled higher in the 66s & gold was off 2 to 2923 (more on both below).

Dow Jones Industrials

The US trade deficit widened to a record in Jan as companies scrambled to secure goods from overseas before Pres Trump imposed tariffs on America’s largest trading partners.  The gap in goods & services trade widened 34% from the prior month to $131B, Commerce Dept data showed.  The deficit was larger than all but 1 estimate in a survey of economists.  The value of imports rose 10% to a record $401B, while exports increased 1.2%.  The figures aren't adjusted for inflation.  Trump promised sweeping tariffs during the 2024 presidential campaign, & on Tues he handed down sweeping 25% duties on Canada & Mexico while doubling tariffs on Chinese goods to 20%.  Canada & China immediately announced retaliatory measures & Mexico is responding on Sun.  Trump said yesterday he's exempting automakers from newly imposed tariffs on Mexico & Canada for 1 month as a temporary reprieve following pleas from industry leaders.  But Canadian Prime Minister Justin Trudeau is not open to lifting full package of retaliatory duties if Trump leaves any tariffs on Canada in place.  Canada's trade surplus with the US jumped to a record at the start of the year, driven by exports of cars, auto parts & oil, separate data from Statistics Canada showed today.

US trade deficit surged to record ahead of Trump tariffs

Pres Trump announced that he would exempt Mexico from tariffs on goods under the US–Mexico–Canada Agreement (USMCA) until Apr 2.  He announced the extension in a post to Truth Social following a conversation with Mexican Pres Claudia Sheinbaum Pardo.  "After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement," Trump wrote.  "This Agreement is until April 2nd. I did this as an accommodation, and out of respect for, President Sheinbaum.  Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the US &, likewise, stopping Fentanyl. Thank you to President Sheinbaum for your hard work and cooperation!"  Sheinbaum Pardo thanked Trump for the extension.  "Many thanks to President Donald Trump. We had an excellent and respectful call in which we agreed that our work and collaboration have yielded unprecedented results, within the framework of respect for our sovereignties," she wrote in Spanish.  "We will continue working together, particularly on issues of migration and security, which include reducing the illegal crossing of fentanyl into the United States, as well as weapons into Mexico. As President Trump mentions, Mexico will not be required to pay tariffs on all those products within the T-MEC. This agreement is until April 2, when the United States will announce reciprocal tariffs for all countries."  A White House official said that "President Sheinbaum presented President Trump with tangible evidence that there’s been [an] increase in fentanyl seizures in the last 30 days and demonstrated real commitment to focus on curtailing cartels and drug trafficking."

Trump halts tariffs on some Mexican products after talking to country's president

President Donald Trump’s sanctions against Iran are designed to shut down the country's oil industry & “collapse its already buckling economy,” Treasury Secretary Scott Bessent said.  The US is deploying sanctions against Iran aggressively for “immediate maximum impact,” Bessent said.  Trump’s goal is to slash Iran's oil exports of 1.5M barrels per to a trickle, the Treasury secretary said.  “We are going to shut down Iran’s oil sector and drone manufacturing capabilities,” Bessent added.  The administration also intends to cut off Tehran's access to the intl financial system, he said.  Prices for US crude oil & the global benchmark Brent turned positive after Bessent's comments.  West Texas Intermediate rose 6¢ to $66.37 per barre while Brent gained 16¢ to $69.46.  “Making Iran broke again will mark the beginning of our updated sanctions policy,” the Treasury secretary, a former global investment manager, said.  “If I were an Iranian, I would get all my money out of the rial now,” he said.  Trump re-imposed his pressure campaign on Iran thru a presidential memorandum on Feb 4.  2 days later, the Treasury Dept started imposing sanctions on an intl network shipping Iranian oil to China.  Oil prices fell to multiyear lows on yesterday as Trump's tariffs against Canada, Mexico & China raised fears among investors that economic growth will slow & crude demand will falter. OPEC+ also confirmed this week that it will gradually bring 2.2M barrels per day back to the market starting in Apr.

U.S. will collapse Iran’s economy by shutting down its oil industry, Treasury Secretary says

Gold prices fell about 1% as investors booked profits after a 3-day rally, with markets eyeing US jobs data for clues on the Federal Reserve's interest rate path amid rising global trade tensions.  Spot gold, which was down 0.5% at $2904 an ounce has gained more than 10% this year.  It hit a record high of $2956 on Feb 24.  US gold futures also fell 0.5% to $2912.  Market focus is on the escalating global trade war after the US imposed 25% tariffs on imports from Mexico & Canada on Tues along with new duties on Chinese goods.  Asian shares rose as investors hoped trade tensions could ease after Pres Trump exempted some automakers from tariffs for a month.  Investors are turning to gold as a safe haven asset as geopolitical & economic uncertainty looms.

Gold Prices Fall On Profit-Taking, US Data In Focus

Oil prices were steady after falling for the past 4 sessions as US tariffs on Canadian crude supplies are likely to be eased, but investors remain wary of remaining tariffs on Mexico & major producers' plans to increase output.  Brent crude futures were trading up 42¢ (0.6%) at $69.72 a barrel while US West Texas Intermediate (WTI) crude was up 40¢ (0.6%) at $66.71 a barrel.  Brent has plunged 6.5% in the previous 4 sessions, falling to its lowest since 2021 on Wed, while WTI has dropped 5.8% over the same period to its lowest since May 2023.  Prices fell after the US imposed tariffs on Canadian & Mexican trade, including energy imports, at the same time major producers decided to raise output quotas for the first time since 2022.  The decline eased as the US said it would exempt automakers from 25% tariffs, raising optimism the impact of the trade dispute could be mitigated.  In addition, sources familiar with the discussions said Pres Trump could remove a 10% tariff on Canadian energy imports, such as crude oil & gasoline, that comply with existing trade agreements.  Tariffs also remain in place on Mexican crude oil imports from the US, a smaller supply stream than Canadian crude but an important flow for US refineries on the Gulf Coast.

Oil Prices Steady After Days Of Declines, But Traders Wary Of Tariffs, Supply Impact

Stocks tanked to session lows after more tariff whiplash from the Trump administration.  Trade-war uncertainty has persisted as investors weighed how far Pres Trump would be willing to negotiate on tariffs.  Today, Trump said he would pause tariffs on some Mexican goods & the White House later said the delay also includes goods from Canada.

Markets slide as traders wait for clarity on Canada and Mexico tariffs

Dow slid 151, decliners over advancers better than 3-2 & NAZ dropped 168.  The MLP index was off 2 to the 311s & the REIT index was off 7+ to the 412s.  Junk bond funds eased higher & Treasuries saw more selling which brought higher yields.  Oil was flattish in the 66s & gold gave back 6 to 2919.

Dow Jones Industrials

Pres Trump's efforts to pare down the federal gov workforce left a mark on the labor market in Feb, with announced job cuts at their highest level in nearly 5 years, outplacement firm Challenger, Gray & Christmas reported.  The firm reported that US employers announced 172K layoffs for the month, up 245% from Jan & the highest monthly count since Jul 2020 during the heightened uncertainty from the Covid pandemic.  In addition, it marked the highest total for the month since 2009 during the global financial crisis.  More than 1/3 of the total came from billionaire entrepreneur Elon Musk's efforts, with Trump’s blessing, to reduce the federal headcount.  Challenger put the total of announced federal job cuts at 62K, spanning 17 agencies.  “With the impact of the Department of Government Efficiency [DOGE] actions, as well as canceled Government contracts, fear of trade wars, and bankruptcies, job cuts soared in February,” Andrew Challenger, the firm's workplace expert, said.  Jan's planned reductions brought the total thru the first 2 months of the year to 222K, also the highest for the period since 2009 & up 33% from the same time in 2024.  The report comes amid heightened concern about the state of the labor market & the economy in general as Trump's plans for tariffs, slashing the size of gov & mass deportations & stringent immigration restrictions take shape.  There has been a slew of mixed indicators about where things are heading, with consumer surveys showing concern over inflation & layoffs while other data shows economic strength continuing.  Payrolls processing firm ADP reported yesterday that private sector hiring grew by just 77K in Feb.  According to the Challenger report, it's not just gov cutting back.  Retail saw 39K cuts for the month as companies such as Macy's & Forever 21 announced sharp staff reductions.  The sector's cuts in 2025 are up nearly sixfold from where they were in 2024.  Technology firms also listed another 15K in reductions, though the sector's cuts are actually lower from a year ago.  On the upside, firms announced plans in Feb to hire a total of 35K new workers, putting the year to date total up 159% from a year ago.

Layoff announcements soar to the highest since 2020 as DOGE slashes federal staff

Philadelphia Federal Reserve Pres Patrick Harker said that trouble may be brewing for a US economy that is currently in good shape but showing signs of stress in the consumer sector & risks to the inflation outlook.  "Unemployment still low, still getting growth, but there are threats to this. We're starting to see that confidence is starting to wane" on both the consumer & business fronts, Harker said.  While inflation has been retreating, "I'm worried that right now that is at risk, that decline is at risk," he said, while adding it's still his expectation that price pressures will continue to retreat.  Harker also said there is mounting evidence that the consumer sector is "under stress," especially for those who aren't wealthy.  While Harker did not say what he thinks the central bank should do with interest rates in this environment of uncertainty, he added "I'm an avowed pragmatist when it comes to policy" & in highly uncertain periods, "you don't go very fast in either direction."  He spoke as Trump administration policies roil the economy & markets & kindle fears of a resurgence in inflation & slowdown in economic growth.  Markets have been pricing in more Fed rate cuts this year amid worries about growth and hiring.  Harker, who is due to retire from his position at the Philadelphia Fed later this year, also said he's worried about gov borrowing & the $'s ongoing role as the world's reserve currency.  He said the currency's status is underpinned by the rule of law, but sees threats on that front.  When it comes to keeping the $ strong, "that's not one I lose sleep over right now, but I'm starting to worry more and more."

Fed's Harker sees warnings signs for the US economy

Treasury yields moved higher as investors breathed a sigh of relief over the potential for tariff exemptions & awaited key jobs data.  The benchmark 10-year Treasury yield climbed almost 2 basis points to 4.284% & the 2-year Treasury yield was slid more than 3 basis points to 3.957%.  1 basis point is equal to 0.01%, & yields & prices move in opposite directions.  Investors are feeling optimistic about the possibility of future tariff exemptions after The White House announced a 1-month delay to tariffs on automakers whose cars comply with the US-Mexico-Canada Agreement.  “Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage,” Press Secretary Karoline Leavitt said on behalf of Pres Trump.  This was after Trump implemented 25% tariffs on imports from Canada & Mexico on Tues, as well as an additional 10% duty on China.  Canada, Mexico & China have said they will respond with reciprocal measures as a result.  Investors will also be watching the big data release of the week, non-farm payrolls, due tomorrow.  That comes after the volume of unemployment claims came in lower than economists anticipated today.

10-year Treasury yield ticks higher as investors digest potential tariff relief

Stocks fell but pared steeper losses after Commerce Secretary Howard Lutnick hinted that more temporary exemptions are likely within the Trump administration's current 25% tariff policy on Canada & Mexico.  Tech remains leading the retreat.  Fri could be a critical day for investors, with a high-stakes jobs report & a Powell speech.

Markets rebound after delay on Trump's tariffs

Dow shot up 485 (near session highs), advancers over decliners 2-1 & NAZ rose 267.  The MLP index was off 1+ to the 314s & the REIT index gained 4+ to 420.  Junk bond funds remained mixed & Treasuries had more selling which raised yields.  Oil fell 1+ to the 66s & gold added 9 to 1929 (more on both below).

Dow Jones Industrials

The White House announced a 1-month tariff exemption for automakers after Pres Trump spoke a day earlier with heads of General Motors (GM), Ford Motor (F) & Stellantis (STLA).  Automakers have urged Trump to waive 25% tariffs on Mexico & Canada on vehicles that comply with the US-Mexico-Canada Agreement's rules of origin.  “Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage,” Press Secretary Karoline Leavitt said on behalf of Trump.  Leavitt confirmed the automakers requested today's call with Trump, who mentioned it during his address to Congress later in the day.  The White House said it granted a 1-month delay for tariffs on automakers whose cars comply with USMCA, which was negotiated under Trump's first term in office.  It was not immediately clear whether just vehicles will be exempt, or if automotive parts would also be included.  The exemption allows for additional preparation & discussions between the White House and automotive industry on tariffs.  It also more closely aligns with potential vehicle tariffs on imports from outside of North America.  Trump previously said those tariffs would be confirmed on Apr 2, in a push for automakers to invest more in the US for vehicle production.

Trump grants automakers one-month exemption from tariffs

A sharp drop in mortgage interest rates finally lit a fire under loan demand.  Both current homeowners & potential homebuyers jumped back into the market, after a lackluster showing for this year so far.  Total mortgage application volume jumped 20.4% last week compared with the previous week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index.  This was not only the first increase in 3 weeks, but it is an outsized weekly move.  Mortgage rates were clearly the culprit.  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806K or less, decreased to 6.73% from 6.88%, with points falling to 0.60 from 0.61, including the origination fee, for loans with a 20% down payment.  That is the lowest level since last Dec.  “Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S.,” said Joel Kan, an MBA economist.  “Those factors resulted in the largest weekly decline in the 30-year fixed rate since November 2024.”  Applications to refinance a home loan, which are most sensitive to weekly moves in interest rates, jumped 37% for the week & were 83% higher than the same week 1 year ago.  While the vast majority of borrowers today still have loans with rates well below what is being offered today, more recent buyers from the last two years are now able to benefit from a refinance.  Applications for a mortgage to purchase a home rose 9% for the week but were still just 2% higher than the same week 1 year ago.  “This is a period where we typically see purchase activity ramp up and purchase applications were up over the week and continued to run ahead of last year’s pace, more green shoots as we head into the spring homebuying season,” Kan added.  While the weekly jump in purchase volume is certainly positive, it is still historically low.  Buyers are up against high home prices, limited inventory & more uncertainty about the overall economy.  The new tariffs levied on China, Canada & Mexico are widely expected to raise home prices, especially for new construction.  Mortgage rates moved very slightly lower to start this week, according to a separate survey from Mortgage News Daily.  Today, when the tariffs went into effect, the stock & bond markets rode a roller coaster, with bond yields, which mortgage rates follow, dropping along with stocks.  “As the day progressed, stocks and bonds bounced back in the other direction and the move was big enough for most mortgage lenders to reprice back toward slightly higher rates,” wrote Matthew Graham, COO at Mortgage News Daily.

Weekly mortgage demand surges 20% higher, after interest rates drop to the lowest since last year

"Six Districts reported no change, four reported modest or moderate growth, and two noted slight contractions," the US central bank said in its summary of observations from the commercial & community contacts of each of the Fed's 12 regional banks.  "Overall expectations for economic activity over the coming months were slightly optimistic."  Known collectively as the "Beige Book," the document provides a snapshot of the nation's economic experience & mood 2 weeks ahead of each Fed policy meeting.  Over its 54 pages, there were 47 mentions of uncertainty, up from 17 in the Jan report, with a doubling of references to tariffs since then.  With all the data collection complete by Feb 24, it may already be stale.  Trump imposed 25% tariffs on most imports from Mexico & Canada, & doubled tariffs on Chinese goods to 20%, actions that many investors & analysts said went far beyond what they expected.  Canada & China immediately retaliated with new import taxes on US goods & Mexican Pres Claudia Sheinbaum promised her own response this weekend.  Although the White House today said autos coming in thru the US-Mexico-Canada trade agreement would be exempt from the tariffs for a month, some economists say the new levies augur stronger inflation & slower growth, a combination that could present a difficult policy choice for the Fed.  That challenging mix is already evident in surveys showing rising consumer inflation expectations, slowing business activity, a drop in new factory orders & an increase in prices paid for manufacturing materials.  The central bankers have signaled for now that they will keep the benchmark overnight interest rate in the current 4.25%-4.50% range at their Mar 18-19 meeting.  They want to keep downward pressure on inflation that is making slow but bumpy progress toward their 2% goal, & they view the labor market as healthy & not in need of the support that a rate reduction could deliver.

US activity rises slightly and uncertainty also up, Fed survey shows

Gold prices edged lower despite a lower $ as investors held back from making large bets ahead of the release of US payrolls data later this week, although trade war jitters kept prices above the key level of $2900 per ounce.  Spot gold was down 0.1% at $2913 an ounce & US gold futures settled 0.2% higher at $2926.  There's still buying interest out there now, but there's going to be some measure of caution ahead of Fri's payrolls data although the underlying trend remains favorable.  Concerns about Pres Trump's tariff measures have driven up the prices of safe-haven gold to 11 record highs this year, peaking at $2956 on Feb 24 & culminating in an overall year-to-date gain of 11%.  In an address to Congress late yesterday, Trump said further tariffs would follow on Apr 2, including "reciprocal tariffs" & non-tariff actions aimed at balancing out years of trade imbalances.  That move would follow new 25% tariffs on most imports from Mexico & Canada that took effect yesterday, along with a doubling of duties on Chinese goods to 20%.

Gold takes a breather as focus turns to US jobs data

Oil prices fell for a 3rd day, as investors worried about OPEC+'s plan to continue raising output in Apr & Pres Trump's tariffs on Canada, China & Mexico escalated trade tensions.  Brent crude futures fell $1.02 (1.4%) to settle at $70.02 a barrel & US West Texas Intermediate (WTI) crude futures fell $1.33 (1.9%) to settle at $66.93 a barrel.  Crude prices closed near their lowest levels in months the previous day, weighed down by expectations that US tariffs & retaliatory tariffs by affected countries would slow economic growth & reduce fuel demand.  The US tariffs on China, Canada & Mexico have prompted swift retaliatory action from each country, raising concerns about slowing economic growth & the impact on energy demand.  Canada & China quickly retaliated against Trump's tariffs yesterday & Mexican Pres Claudia Sheinbaum said the country would respond, without providing details.  Meanwhile, the Organization of the Petroleum Exporting Countries & its allies including Russia (OPEC+) decided on Mon to increase output for the first time since 2022, further pressuring crude prices.

Oil Prices Fall For Third Day On OPEC+ Output Hike, Trump Tariffs

Stocks are rising following positive jobs data & signs of tariff relief, while oil futures drop to a 6-month low due to OPEC+ raising production & tariff concerns.  With all the turmoil, gold remains at record levels above 2900.

Markets waver on tariff uncertainty and weak jobs data

Dow was off 76, decliners barely ahead of advancers & NAZ pulled back 86.  The MLP index retreated 5+ to 311 & the REIT index eased back 1+ to 414.  Junk bond funds were mixed & Treasuries had a little selling which lifted yields.  Oil dropped a big 2+ to the 65s & gold rose another 15 to 2936.

Dow Jones Industrials

Companies in the private sector added just 77K jobs in Feb, payroll processing firm ADP said.  The figure, the lowest since Jul, is well below the estimate for 140K jobs & also more than the prior month's upwardly revised reading of 186K.  Annual pay was up 4.7%, the same as the prior month.  "Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month," said Nela Richardson, ADP's chief economist.  "Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead."  Leisure & hospitality added 41K positions, leading job creation in Feb.  Professional & business services added 27K jobs, while financial activities & construction each contributed 26K.  Manufacturing & other services added 18K & 17K jobs, respectively.  On the negative side, trade, transportation & utilities lost 33K jobs in Feb, education & health services decreased by 28K & information services lost 14K.  Natural resources & mining jobs decreased by 2K.  Large businesses, those with 500 or more employees, added 37K jobs in the month.  Businesses with 50 - 499 employees hired 46K workers.  Establishments with fewer than 50 employees lost 12K jobs.

Private sector job growth falls well below expectations

Commerce Secretary Howard Lutnick signaled a possible agreement between the Trump administration & leaders of Canada & Mexico that could see some of the tariffs imposed on both nations rolled back.  Canada & Mexico, 2 of the US' biggest trading partners, have imposed retaliatory tariffs following those imposed by Pres Trump that went into effect yesterday.  Trump said the increases were in response to both countries not doing enough to curb the flow of illegal immigration & illicit drugs across their borders with the US.  Yesterday Lutnick said host that Trump will likely look to meet America's neighbors in the middle with a focus on the US-Mexico-Canada Agreement (USMCA), which was created to create fairer trade between the nations.  "He's really looking carefully at that trying to figure out if there is a way in there that he can come in the middle, where he can give the Canadians and Mexicans something, but they have to got do more," he said.  "They've got to end fentanyl death. You can't just say it's OK that people can die. That is just not a thing."  "It's not gonna be a pause. None of that pause stuff. But I think he's going to figure out, you do more, and I'll meet you in the middle someway," he added.  "We're going to probably be announcing that tomorrow. So somewhere in the middle will likely be the outcome — the president moving with the Canadians and Mexicans but not all the way," he continued.  The secretary said the administration has made its concerns about the border & illegal drugs known to Canadian & Mexican officials.  "He's really looking carefully at that trying to figure out if there is a way in there that he can come in the middle, where he can give the Canadians and Mexicans something, but they have to got do more," he said.  "They've got to end fentanyl death. You can't just say it's OK that people can die. That is just not a thing."  "It's not gonna be a pause. None of that pause stuff. But I think he's going to figure out, you do more, and I'll meet you in the middle someway," he added. "We're going to probably be announcing that tomorrow. So somewhere in the middle will likely be the outcome — the president moving with the Canadians and Mexicans but not all the way," he noted.  The secretary said the administration has made its concerns about the border & illegal drugs known to Canadian & Mexican officials.  "If you respect us as your best trading partner, end it," he added.  "And you have got to end fentanyl. And the way we're going to describe fentanyl is very simple — autopsied American guts. It's got to end."  Effective yesterday, US imports from China, the 3rd-largest US trading partner, became subject to a new 10% tariff on top of the initial 10% tariff he imposed on Chinese goods last month.

Trump commerce secretary hints at trade compromise with neighbors

New orders for US-manufactured goods rebounded in Jan amid a surge in commercial aircraft bookings, but the broader manufacturing sector's recovery is likely to be hampered by tariffs on imports.  Factory orders increased 1.7% after a revised 0.6% decline in Dec, the Commerce Dept's Census Bureau said.  The forecast had factory orders increasing 1.6% after a previously reported 0.9% drop in Dec.  Factory orders advanced 3.5% on a year-on-year basis in Jan.  Manufacturing, which accounts for 10.3% of the economy, has been showing tentative signs of recovery after being undercut by the Federal Reserve's aggressive interest rate hikes in 2022 & 2023.  But a trade war, triggered by Pres Trump's new 25% tariffs on imports from Mexico & Canada, which took effect yesterday, along with a doubling of duties on Chinese goods to 20%, is seen snuffing out the recovery.  Domestic manufacturers rely heavily on imported raw materials & the duties are expected to increase production costs, which are then passed on to buyers of the finished products.  An Institute for Supply Management survey on Mon showed fears about import levies dominated responses from manufacturers in Feb as well as discussions about who will pay for tariffs.  Civilian aircraft orders soared 94% in Jan after dropping 29% in Dec.  Orders for motor vehicles & parts decreased 1.5%.  Transportation equipment orders rebounded 9.9%.  Excluding transportation equipment, factory orders gained 0.2%.

US factory orders rebound in January on commercial aircraft

Stocks are drifting lower with selling in the last hour.  Traders are uncertain about a rebound after a sharp sell-off, amid hopes that Pres Trump could soon scale back his new tariffs on Canada & Mexico.  Soft data on labor-market hiring revived worries about a slowdown in Canada & Mexico.