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.

Markets flip positive as Trump tariffs take effect

Dow settled down 670 with selling into the close which pared a midday rebound, decliners over advancers 5-2 & NAZ gave back 65.  The MLP index continued weak, down 5+ to the 317s, & the REIT index was off 5 to the 416s.  Junk bond funds slid lower & Treasuries were sold in the PM, taking yields higher.  Oil rebounded & finished steady at 68 & gold rose 22 to 2923 (more on both below).

Dow Jones Industrials

Pres Donald Trump is pushing back against Canadian Prime Minister Justin Trudeau, calling his tariffs "very dumb," saying that "when he puts a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!"  Trump made remarks were after Trudeau slammed the Trump administration's new 25% tariffs.  Trudeau previously announced 25% retaliatory tariffs on American goods in response to Trump's tariffs that went into effect today on Canadian imports.  "So today the United States launched a trade war against Canada, their closest partner and ally, their closest friend. At the same time, they are talking about working positively with Russia, appeasing Vladimir Putin, a lying, murderous dictator. Make that make sense," Trudeau said.  "Canadians are reasonable, and we are polite, but we will not back down from a fight, not when our country and the well-being of everyone in it is at stake," he continued.  "I want to speak directly to one specific American. Donald, in the over eight years you and I have worked together, we've done big things," Trudeau added.  "And now we should be working together to ensure even greater prosperity for North Americans in a very uncertain and challenging world. Now, it's not in my habit to agree with the Wall Street Journal. But Donald, they point out that even though you're a very smart guy, this is a very dumb thing to do. We – two friends fighting – is exactly what our opponents around the world want to see."  Trump signed an exec order authorizing an additional 25% tariff on imports from Canada & Mexico, & an additional 10% tariff on Chinese imports.  Energy imported from Canada, including oil, natural gas & electricity, would be taxed at an additional 10%.  The retaliatory tariffs Canada is imposing on $155B of US goods went into effect today.  Canada will start with tariffs on $30B worth of American goods, followed by tariffs on $125B of American products in 21 days.

Trump responds to Trudeau's rebuke of hard-hitting tariffs officially going into effect

A US economy praised for its surprising resilience to a pandemic, high inflation & rapid interest rate hikes faces a new challenge from Pres Trump's self-declared trade war, seen by economists as a recipe for fewer jobs, slower growth & higher prices.  The fallout, assuming Trump does not backtrack in the face of falling stock markets & cracks to consumer & business sentiment, is expected to be broad, deep & time-consuming as the world's largest economy adjusts to the overnight shock of a 25% tariff on most goods coming from Mexico & Canada, both close trading partners & geographic neighbors, & an additional 10% duty on imports from China.  Canada & China have announced retaliatory tariffs on US imports, while Mexico is expected to do so this coming weekend.  A price shock on its face, the tariffs could also begin to kill demand, said Diane Swonk, chief economist at KPMG, particularly if consumers retreat & firms facing heightened uncertainty curb investment and hiring.  The move also risks unintended consequences - if, for example, banks tighten credit on small businesses instead of extending suddenly expensive customs bonds.  A recession by the start of next year is not out of the question, Swonk said, with some analysts expecting a downturn could sweep the continent given the dependence of Canada & Mexico on exports to the US market.  Retaliation could further deepen the impact.  "We've got now multiple trade wars on multiple fronts," Swonk said.  Her analysis shows the effective tariff rate spread across roughly $3T in US imports might rocket to 16% by early 2026 from a current baseline of about 3% if Trump follows thru on all his threats.  "That would be the highest rate since 1936," during the Great Depression, and "gets you flirting with stagflation" - the toxic mix of weak growth, high joblessness & persistent inflation that epitomized the 1970s.  While the US economy is ordered differently now than in the 1930s or 1970s, the sweep of Trump's actions & the uncertainty about what comes next still unnerved markets that had hoped he was only bluffing about tariffs to gain leverage in negotiations with trading partners.

Storm clouds gather over US economy as Trump kicks off trade war

Federal Reserve Bank of New York Pres John Williams said that Trump administration tariffs will have some impact on driving up price pressures but there is still a lot of uncertainty how this will all play out.  “I do factor in some effects” from tariffs on inflation that will play out over the year, Williams said at an event in New York.  He views monetary policy as being in a “good place” & “I don’t see any need to change it” right now.

Fed's Williams: Tariffs may push up inflation, rate policy in good place

Gold prices rose, driven by a weaker $ heightened safe-haven demand amid escalating trade conflicts following Pres Trump's imposition of new tariffs.  Spot gold was up 0.6% at $2911 an ounce.  Bullion has gained nearly 11% so far this year & hit a record high of $2956 on Feb 24.  US gold futures settled 0.7% higher at $2920.  The implementation of tariffs brings a high level of uncertainty to the markets, & safe-haven products like gold continue to do well.  Trump's new 25% tariffs on imports from Mexico & Canada today.  He also doubled duties on Chinese goods to 20%. China hit back immediately with additional 10%-15% tariffs on certain US imports from Mar 10 & a series of new export restrictions for designated US entities.  Canada retaliated with 25% tariffs on $30B worth of US imports with immediate effect today.  The US dollar index fell 0.6%, hitting its lowest level since Dec & making $-priced gold less expensive for buyers holding other currencies.

Gold rises on weaker dollar, trade war fears after Trump tariffs

Oil prices dropped again as traders faced up to a double whammy of new tariffs & plans to boost production in a number of OPEC countries.  Brent crude futures, the intl benchmark, fell 1.3% to $70.68 a barrel, putting them down 3% so far in Mar & West Texas Intermediate futures, the US benchmark, were down 0.9% to $67.74, bringing their loss in Mar to around 3% as well.  Both are more than 5% down in 2025.  Pres Trump confirmed  that 25% tariffs on Canada & Mexico were “all set” to take effect today.  He also signed an order increasing levies on China by another 10%.  Several members of OPEC+ expect to start raising production next month.  In total, 8 countries will begin restoring output, adding about 2.2M barrels a day over 18 months.

Oil Prices Drop Again

US markets eliminated all of their post-election gains as stocks responded to fresh tariffs on Canada, Mexico & China.  Rising fears of a full-on trade war drove yesterday's sell-off after Pres Trump said there was "no room left" for Canada or Mexico to strike a deal to mitigate promised tariffs.  Stocks are retreating as markets assess the likely impact of Trump's broad tariffs on America's top trading partners.  The measures, fresh 25% tariffs on Canada & Mexico, & a doubling in China duties to 20%, were signed into effect today.  Comments by John Williams (above) were refreshing & brought back buyers in the PM.

Markets retreat on fears Trump tariffs will lead to a global recession

Dow dropped 674, decliners over advancers a hefty 5-1 & NAZ sank 186.  The MLP index tumbled 8+ to the 314s & the REIT index fell 4+ to the 416s.  Junk bond funds were a little lower & Treasuries had limited buying which lowered yields.  Oil was off 1 to the 67s & gold rose 15 to 2916.

Dow Jones Industrials

Pres Trump imposed tariffs on Canada & Mexico and an additional levy on China on today, escalating tensions with key trading partners.  The US began imposing a 25% tariff on goods from Canada & Mexico today, & an additional 10% levy on Chinese imports as Trump looks to curtail drug trafficking & illegal immigration.  Earlier this year, the administration delayed these tariffs to allow Canada & Mexico time to negotiate trade deals aimed at addressing US border security & halting the flow of drugs like fentanyl.  Last week, Trump reaffirmed his decision to impose the levies, stating that "drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels."  "We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled," Trump wrote, adding that "China will likewise be charged an additional 10% Tariff on that date."  He also teased other tariffs launching Apr 2, but did not offer details.  Shortly after his restoration to power, the White House said Trump is working "to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country."  These levies are sending a message "that the flow of contraband drugs like fentanyl to the United States, through illicit distribution networks, has created a national emergency, including a public health crisis," the White House continued.

Tensions escalate with key trading partners as Trump's sweeping tariffs take effect

Treasury Secretary Scott Bessent projected confidence in Pres Trump's expansive plans to tariff foreign nations even as the stock market slumped in reaction to the first round of levies on Canada & Mexico.  “Over the medium term, which is what we’re focused on, it’s a focus on Main Street. Wall Street’s done great, Wall Street can continue to do fine, but we have a focus on small business and consumers,” Bessent said. “So we are going to rebalance the economy.”  Bessent argued that there would be a transition period as the tariffs kick in this month & next, but he argued that the market selloff was only temporary.  “With the China tariffs, I am highly confident that the Chinese manufacturers will eat the tariffs — prices won’t go up,” Bessent added.  “With Canada and Mexico, I think we’re in the middle of a transition, and as you mentioned, Honda moving to Indiana is a great start.”  So far, Trump has imposed 25% tariffs on all Mexican imports & most Canadian ones — except for energy products, which face a 10% rate.  He also has doubled his new charge on China to 20%, while 25% tariffs on steel & aluminum imports are due to take effect next week.  He's also pledging to implement reciprocal levels of tariffs on foreign nations, & to place additional levies on lumber, pharmaceuticals, semiconductor chips, copper & auto imports, beginning as soon as Apr 2.

Bessent shrugs off tariff sell-off, says Wall Street isn't the focus

Best Buy (BBY) posted fiscal 4th-qtr earnings & revenue that topped expectations, but CEO Corie Barry projected that prices for US consumers would rise as Pres Trump's tariffs on China & Mexico go into effect.  Barry said China & Mexico are the company's top 2 supply chain sources, with about 55% & 20% of its products sourced from those countries, respectively.  “Trade is critically important to our business and industry. The consumer electronic supply chain is highly global, technical and complex,” Barry added.  “We expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely.”  Barry added that the company directly imports only 2-3% of its products & that it's reviewing & adjusting its supply chain sourcing. The company typically carries 6 weeks of supply at a time & that she expects pricing changes to affect the 2nd thru 4th qtrs of the fiscal year.  “The giant wild card here, obviously, is how the consumers are going to react to the price increases, in light of a lot of price increases potentially throughout the year and a general consumer confidence that is showing a little signs of weakness at the moment,” CFO Matt Bilunas said.  4th-qtr EPS was 54¢, compared with $2.12 during the year-ago period.  Adjusting for a noncash goodwill impairment charge related to Best Buy Health & 4th-qtr EPS was $2.58.  Comparable sales, revenue from online sales & stores open at least 14 months, rose 0.5% year over year for the qtr, excluding the additional week in fiscal 2024.  BBY had forecast a change ranging from flat to down 3%.  In the US, quarterly comparable sales rose 0.2% year over year.  Full-year fiscal 2025 revenue came in at $41.5B, down 4.4% from $43.4B in fiscal 2024.  Fiscal 2025 had 1 fewer week than the prior-year period, which the retailer estimates added $735M in revenue to its fiscal 2024 total.  For fiscal 2026, the company issued full-year guidance of $41.4 - $42.2B in revenue - comparable sales growth of 0% - 2% year over year.  “We believe consumer behavior will be largely similar to last year – remaining resilient but still dealing with high inflation that is driving expenses up across their lives, making them value focused and thoughtful about big ticket purchases. And, at the same time, we continue to see a consumer that is willing to spend on high price point products when they need to or when there is technology innovation,” Bilunas said.  BBY said the guidance does not account for the impact of recent or proposed tariffs.  The stock fell 12.93 (15%).

Best Buy shares plunge as CEO warns price increases are ‘highly likely’ due to Trump tariffs

Markets eliminated all of their post-election gains as stocks deepened their sell-off with fresh tariffs on Canada, Mexico & China now officially in effect.  Notably, NAZ is set to close down at least 10% from its record closing high on Dec 16, which would mark correction territory for the tech-heavy index.  Rising fears of a full-on trade war drove yesterday's sell-off after the pres said there was "no room left" for Canada or Mexico to strike a deal to mitigate promised tariffs.  Stocks are retreating as markets assess the likely impact of Trump's broad tariffs on America's top trading partners.  The measures, fresh 25% tariffs on Canada & Mexico, & a doubling in China duties to 20%, were signed into effect today.

Markets sink as losses accelerate on looming Trump tariffs

Dow tumbled 649, advancers over decliners 2-1 & NAZ nosedived 497.  The MLP index was off 2+ to the 323s & the REIT index slid back 1+ to 420.  Junk bond funds saw a little buying & Treasuries were in demand, raising yields.  Oil was off 1+ to the 68s as traders weigh Trump’s tariff plans & gold jumped 51 to 1899 following recent selling (more on both below).

Dow Jones Industrials

Semiconductor giant Taiwan Semiconductor Manufacturing Co (TSMC) is expected to announce a $100B investment, a White House source said.  TSMC, a Taiwan-based chipmaker that builds advanced semiconductors which are used to power smartphones & artificial intelligence (AI) models, is expected to announce the investment following meetings with Pres Trump.  The investment is expected to focus on advanced semiconductor manufacturing facilities over the next 4 years.  TSMC has previously invested in a chip factory in Arizona with an initial $12B investment, & last Apr it announced an additional investment of $25B to add a 3rd factory at its Arizona facility by 2030 to bring its total investment there to $65B.  The company also received an award of up to $6.6B in grants from the CHIPS Act for the Arizona facility as well as other federal funds from the law that aimed to bolster domestic semiconductor manufacturing in the US.  TSMC said that it "looks forward to discussing our shared vision for innovation and growth in the semiconductor industry, as well as exploring ways to bolster the technology sector along with our customers."

Chip giant TSMC expected to announce $100B investment in US

The risks for higher inflation are on the rise, St Louis Federal Reserve Pres Alberto Musalem said.  During a keynote address at the National Association for Business Economics conference, Musalem noted that his baseline case is for inflation to gradually move toward the central bank's 2%. This scenario requires inflation expectations to remain anchored & stable.  However, “near-term inflation expectations have risen substantially over the last few weeks, and that’s something I’m watching closely,” Musalem added.  The Feb reading on The Conference Board's consumer confidence index reflected the largest one-month drop since Aug 2021, as inflation expectations rise.  The Institute for Supply Management's manufacturing PMI also showed a sharp increase in prices within the sector for the month.  “Businesses and households are clearly more sensitive to expectations of higher inflation,” Musalem added.  “That’s why the risks seem more skewed to the upside, but the baseline is for continued disinflation.”  Investors came into 2025 expecting the Fed to lower rates this year.  However, the central bank kept rates at their current 4.25%-4.50% range after its Jan meeting, where it noted that inflation remained “somewhat elevated.”  The CME Group's FedWatch tool also shows that traders are pricing in a 93% likelihood that the Fed will keep rates at their current levels. 

Inflation will move toward 2% target, but risks to outlook are rising, says Fed’s Musalem

Data from the Institute for Supply Management (ISM) show the Manufacturing PMI receding to 50.3 in Feb, down from 50.9 in the previous month & falling behind forecasts of 50.5.  Meanwhile, the Prices Paid Index, which tracks inflation, advanced to 62.4 from 54.9, the Employment Index ticked lower to 47.6 from 50.3, & the New Orders Index deflated to 48.6, from 55.1.  The Greenback maintains its downbeat performance at the beginning of the week, motivating the US Dollar Index to deflate to the 106.60 region.

US ISM Manufacturing PMI surprised to the downside in February

Federal Reserve rate cut bets are still on the table for Jun.  Gold price is slowly but surely making its way higher as Pres Trump remains silent on tariffs.  Gold's price is set to revisit the high in the Asian session near $2876 currently after a steady positive thus far.  Tariffs are still set to hit tomorrow for Mexico & Canada & additional tariffs on China, they are not really triggering another flight into gold.  Traders will need to look for new headlines about tariffs & there is still the chance that Pres Trump will change his mind.  Meanwhile, traders are still digesting Fri's turn of events.  The spat between Ukraine Pres Volodymyr Zelenskyy on one side & Pres Trump & VP JD Vance is still making headlines.  The surprise move that took place afterward in London, with the UK extending several Bs in loans to be covered with the frozen Russian assets in Europe, was actually something that Pres Trump was after.  With no rare earth deal in place, the televised spat in the Oval Office & now London reeling in the agreement on the frozen Russian assets, all bets could be off the table with even possibly the US withdrawing from NATO.  The US 10-year benchmark rate is currently trading around 4.23%, a touch higher from its fresh low at 4.19% on Fri.

Gold props up over 0.50% at the start of the week despite tariffs being set to hit on Tuesday.

Oil prices fell about 2% to a 12-week low on reports OPEC+ will proceed with a planned oil output increase in Apr on worries what US tariffs would do to global economic growth & oil demand.  The Organization of the Petroleum Exporting Countries (OPEC+) has decided to proceed with a planned Apr oil output increase, 3 sources from the producer group said.  OPEC+ has been cutting output by 5.85M barrels per day (bpd), equal to about 5.7% of global supply, agreed in a series of steps since 2022 to support the market.  Brent futures were down $1.48 (2.0%) to $71.33 a barrel, while West Texas Intermediate (WTI) crude fell $1.65 (2.5%) to $68.11.  That puts both crude benchmarks on track for their lowest closes since Dec 6.  Pres Trump will decide today what levels of tariffs he will impose early tomorrow on Canada & Mexico amid last-minute negotiations over border security & efforts to halt the inflow of fentanyl opioids.  Trump has vowed to impose 25% tariffs on all imports from Canada & Mexico, with 10% on Canadian energy products.

Oil prices fall 2% to 12-week low with OPEC+ set to increase output

Stocks plummeted as investors assessed the economic impact of the Trump administration's tariff plans after Pres Trump indicated there was "no room left" for negotiations with Canada & Mexico.  Tech stocks led the sell-off with NAZ dropping 3%.  Federal Reserve's next meeting fast approaches, & the US economy faces the test of disproving investors' fears about growth.  First qtr economic growth is expected to slide following a string of weaker-than-expected economic data.

Markets waver as economic and tariff worries swirl

Dow fell 40, advancers over decliners 2-1 & NAZ slid back 77.  The MLP index added 1 to the 326s & the REIT index rose 3 to the 421s.  Junk bond funds inched higher & Treasuries saw a little buying which reduced yields.  Oil remained in the 69s & gold rebounded 48 to 2896.

Dow Jones Industrials

Bitcoin rallied over the weekend after Pres Trump announced a US strategic crypto reserve & teased new details about the highly anticipated move by his cryptocurrency industry backers.  Bitcoin was last trading above the $93,000 level, which is 19% above its Fri low of $78,226.  Over the weekend, Trump announced the creation of a strategic crypto reserve – a pivot from the “bitcoin stockpile” he previously touted – that he said will include ether, XRP,  Solana's SOL token & Cardano's ADA, in addition to Bitcoin.  Bitcoin rose as high as $95,000, while the smaller coins rocketed double digits.  It was welcome news to investors, who have been anxious for cryptocurrencies to come out of their consolidation.  Last week, bitcoin fell under the key $90K level for the first time in 3 months to, at one point, 25% below its Jan all-time high.  That break below support put it at risk of a bigger slide toward $70K.  Losses in smaller, riskier coins have been even steeper.

Bitcoin jumps nearly $14,000 in three days on Trump’s crypto reserve announcement

Treasury Secretary Scott Bessent said that Pres Trump's proposed tariffs are unlikely to raise inflation, in part because China will “eat any tariffs that go on.”  His comments come just 2 days before the tariffs are scheduled to go into effect tomorrow.  Trump is expected to impose  25% tariffs on imports from Mexico & Canada.  The pres also announced the US would impose an extra 10% duty on Chinese imports, on top of the 10% tariff he levied on the country on Feb 4.   Some economists have raised concerns about the possibility that the tariffs could lead to an increase in inflation & keep interest rates elevated into 2026.  When asked Bessent was asked what impact the tariffs could have on the average household, he said, “Well, we don’t know yet because it’s path-dependent, but what I can tell you is that I’m not worried about China,”  “China will pay for the tariffs because their business model is exporting their way out of this inflation.”  “They will eat any tariffs that go on,” Bessent added.  China’s Ministry of Commerce said Fri  that it “firmly opposes” Trump's latest tariff hike & vowed to retaliate as necessary.  After the US enacted an initial round of tariffs in Feb, China raised duties on certain US energy imports & added 2 US companies to an unreliable entities list.  Experts suggested China could take similar measures again following the addition of fresh tariffs.  “If the U.S. insists on its own way, China will take all necessary countermeasures to defend its legitimate rights and interests,” a Ministry of Commerce spokesperson previously said.

Treasury Secretary Bessent says Trump tariffs won’t cause inflation to increase

Treasury yields sat near flat as investors awaited more clarity on Pres Trump's plans to impose tariffs.  The benchmark 10-year yield Treasury yield slid 3 basis points to 4.199% & the 2-year yield Treasury yield added about 1 basis point, siting at at 4.001%.  1 basis point is equal to 0.01% & yields & prices move in opposite directions.  Trump's tariff plans are again in focus this week, with 25% duties on imports from Canada & Mexico expected to go into effect tomorrow.  Commerce Secretary Howard Lutnick said that the 25% tariff against Canada & Mexico are “fluid” which means it may be lower.  The 10% duty on China imports is “set,” he added.  Traders have expressed concerns about the effects of tariffs on the economy, as legendary investor Warren Buffett made a rare comment against Trump's policies over the weekend.  Buffett, the chairman & CEO of Berkshire Hathaway, said tariffs are “an act of war, to some degree” and could trigger inflation & hurt consumers.  “Over time, they are a tax on goods. I mean, the Tooth Fairy doesn’t pay ’em!” Buffett added.  “And then what? You always have to ask that question in economics.  You always say, ‘And then what?’”

Treasury yields are little changed as tariff deadline nears

Stocks were mixed as a looming deadline fueled uncertainty around Pres Trump's tariff plans & investors looked ahead to the monthly jobs report & key retail earnings.  Mar trading is kicking off with investors encountering more questions than answers as tariff deadlines loom, the Federal Reserve's next meeting fast approaches & the US economy faces the test of disproving investors encountering more questions.

Markets bounce back but remain lower in February

Dow climbed 291, advancers over decliners better than 2-1 & NAZ went up 137.  The MLP index added 1+ to the 321s & the REIT index added 2+ to the 207s.  Junk bond funds were mixed & Treasuries had modest buying which lowered yields (more below).  Oil slid back into the 69s after yesterday's rally on worries over tariffs & gold dropped another 42 to 2853.

Dow Jones Industrials

The Federal Reserve's preferred inflation gauge showed prices rose as expected in Jan at a pace that remains above the central bank's target level as its efforts to tamp down inflation continue.  The Commerce Dept reported that the personal consumption expenditures (PCE) index was up 0.3% from the prior month & 2.5% on an annual basis.  Those figures were in line with the estimates.  Core PCE, which excludes volatile food & energy prices, rose 0.3% for the month & 2.6% from a year ago, in line with estimates.  Federal Reserve policymakers are focusing on the PCE headline figure as they try to slow the pace of price increases to their target of 2%, though they view core data as a better indicator of inflation.  Headline PCE declined slightly from 2.6% in Dec, while core PCE dropped from 2.9% last month.  Headline PCE showed that prices for goods increased 0.5% after they had been relatively flat in recent months.  Prices for services rose 0.2% last month, which was a slower pace than the 0.4% in Dec.  Wages & salaries were up 0.4% in Jan from a month ago, the same as the increase seen in Dec.  The personal savings rate as a percentage of disposable income was 4.6% in Jan, the highest rate recorded since 4.8% in Jun.

Inflation gauge favored by Fed showed prices grew as expected in January

China’s Ministry of Commerce said that it “firmly opposes” PresTrump's latest threat to ramp up tariffs on Chinese goods & vowed retaliation, if necessary.  “If the U.S. insists on its own way, China will take all necessary countermeasures to defend its legitimate rights and interests,” a Ministry of Commerce spokesperson said.  “We urge the U.S. side to not repeat its own mistakes, and to return as soon as possible to the right track of properly resolving conflicts through dialogue on equal footing.”  The statement followed Trump's announcement yesterday that the US would impose an additional 10% duty on Chinese imports on March 4, which coincides with the start of China’s annual parliamentary meetings.  The new tariffs would be on top of the 10% further tariffs that Trump levied on China on Feb 4.  Trump announced the 2 rounds of China duties were being imposed in response to the Asian country's role in the fentanyl trade.  The addictive drug, precursors to which are mostly produced in China & Mexico, has led to tens of thousands of overdose deaths each year in the US.  “In the short term, China’s response will likely include raising tariffs on select U.S. imports, adding more American firms to its unreliable entity list, and potentially further tightening export controls on critical minerals,” Neil Thomas, a fellow on Chinese politics at the Asia Society, said.  He noted he nevertheless expects Beijing’s retaliation will remain “measured,” as Chinese Pres Xi Jinping has an incentive to meet with his American counterpart & initiate negotiations to avoid measures that put greater pressure on already sluggish economic growth.  China's exports have been a rare bright spot in an otherwise slowing economy.  The US is China's largest trading partner on a single-country basis.  While Beijing may maintain a “restrained” stance, upcoming moves will likely target industries that matter the most to Trump supporters, said Alfredo Montufar-Helu, head of the China Center at The Conference Board.

China vows to retaliate as necessary after Trump threatens more tariffs

Treasury yields moved lower as investors sifted through new economic data, including inflation numbers that largely matched expectations.  The benchmark 10-year yield Treasury yield fell by about 5 basis points to 4.241% & the 10-year yield Treasury yield was down 4 basis points at 4.034%.  1 basis point is equal to 0.01% & yields & prices move in opposite directions.  The personal consumption expenditures index rose 0.3% month over month in Jan & 2.5% year over year. The core PCE index, which excludes volatile food & energy prices, also rose 0.3% last month compared to Dec & 10-year yield Treasury yield.  Those readings were in-line with expectations.  Investors are anxiously monitoring Pres Trump's various tariff threats & orders.  His plans for 25% tariffs on imports from Mexico & Canada will go into effect from Mar 4, after a 1-month pause.  Trump said that China, which is already being charged tariffs, will face an additional 10% tariff on the same data.  He also said he would impose 25% tariffs on imports from the EU but is walking back these threats after UK Prime Minister Keir Starmer visited the White House yesterday.  “I think there is a very good chance that in the case of these two great friendly countries, I think we could end up with a real trade deal ... where the tariffs wouldn’t be necessary. We’ll see,” Trump told reporters.

10-year Treasury yield eases slightly after inflation data comes in as expected

Stocks inched higher following a key inflation reading that largely met expectations & as fresh tariff threats added to uncertainty over Big Tech prospects.  Markets are heading into the last trading day of Feb facing sharp weekly & monthly losses after suffering the buffets of tariff moves.