Dow fell 337, decliners over advancers about 3-1 & NAZ fell 54. The MLP index sank 9+ to 320 & the REIT index was off fractionally to the 402s. Junk bond funds traded higher & Treasuries had limited selling which raised yields modestly. Oil slid lower in the 72s & gold pulled back 16 to 2828 on profit taking after reaching a new record (more on both below).
Dow Jones Industrials
In an apparent ending to weeks of intense speculation, the White House confirmed that Pres Trump will be leveling aggressive tariffs this weekend on major US trading partners. Karoline Leavitt, the White House press secretary, said Trump will be implementing 25% tariffs on Mexico & Canada as well as a 10% duty on China, in retaliation for “the illegal fentanyl that they have sourced and allowed to distribute into our country.” The White House provided few details on exactly how the levies will be meted out, saying that they will be available for public inspection at some point tomorrow. “These are promises made and promises kept by the president,” Leavitt said. There was no word on potential exemptions to the tariffs; the White House denied an a report that there would be at least some exclusions rather than simply blanket measures covering all products & that the tariffs would be delayed until Mar 1. Together, the US does about $1.6T in annual business with the 3 countries. Trump is seeking to use the tariffs as both bargaining chips & methods to affect foreign policy changes, specifically the immigration & drug trade issues. “We’ve got the Super Bowl coming up, and eerily, the amount of people that fit in the [New Orleans] Superdome are almost exactly equal to the number of people dying every year here in America from fentanyl, and that comes from China and Mexico,” Trump trade adviser Peter Navarro said. “This is why we have these kind of discussions.” Economists worry that the tariffs could reignite inflation at a time when it appears price pressures are beginning to abate. The Commerce Dept reported today that an inflation reading closely watched by the Federal Reserve rose to 2.6% in Dec, but the details in the report appeared more positive. However, Fed officials have said they are monitoring the impact of fiscal policy. “It will be very important to have a better sense of the actual policies and how they will be implemented, in addition to greater confidence about how the economy will respond,” Fed Governor Michelle Bowman said. Chicago Fed Pres Austan Goolsbee said the key will be whether the tariffs are one-off events or lead to retaliation.
Tariffs on Canada, Mexico and China begin Saturday, White House says
Nvidia (NVDA) CEO Jensen Huang is DC & will be meeting with Pres Trump. The
main topic Huang & Trump are expected to discuss is US artificial
intelligence policy. China's DeepSeek is likely to be part of the discussion,
but the meeting is seen as a way for both leaders to get to know each other. Top
technology CEOs have embraced Trump in recent months to a degree not
seen in his first administration. But this is the first meeting between
Huang & Trump since the pres started his 2nd term last week. Many other industry leaders were at Trump’s inauguration. Tesla (TSLA) & SpaceX CEO Elon Musk has emerged as one of Trump's top advisors, after heavily financing his
campaign. Musk is implementing policy for the Trump administration
thru his oversight of an outside advisory council, the Dept of
Gov Efficiency (DOGE). NVDA fell 4.48.
As Pres Trump threatens to impose 25% tariffs on imports from Canada & Mexico as soon as tomorrow, the global automotive industry is collectively holding its breath. For months, automakers have been taking a “wait-&-see” approach to the Trump administration's potential tariffs. Trump promised to impose duties upon his inauguration this month, then he set a target date of Feb 1 for levies on the key US trading partners. Amid a media report that the tariffs could be delayed until Mar, the White House said Trump would follow thru Sat on his proposal to slap 25% tariffs on imports from Canada 2 Mexico, 2 key US trading partners. If Trump implements the tariffs, automakers such as General Motors (GM), the top seller in the US, may have to change their business strategies to avoid increases in costs, as their supply chains are integrated across North America. A tariff is a tax on imports, or foreign goods, brought into the US. Companies importing the goods pay the tariffs & some fear the companies would simply pass any additional costs on to consumers, raising the cost of vehicles & potentially reducing demand. Uncertainty about trade took a toll on GM yesterday, when the automaker's stock had 1 of its worst days in years even after it beat expectations for its 2025 guidance & its top- & bottom-line for 4th qtr. “Our key take from GM’s 4Q [earnings] result is that while the opportunity for GM is highly compelling, US policy uncertainty must be navigated for the time being,” Barclays analyst Dan Levy said on Wed. GM stock fell 8¢.
Trump’s threat for 25% tariffs on Mexico and Canada is challenging the auto industry
Gold prices surpassed the key $2800 mark for the first time, fuelled by a rush to safety following US Pres Trump's tariff threats, which heightened concerns about global economic growth & inflationary pressures. Spot gold rose 0.3% to $2801 per ounce, after hitting a record peak of $2817 earlier in the session. US gold futures settled 0.4% lower at $2835, trading a premium to spot gold rates. There's a lot of uncertainty out there right now & also wait-&-see attitude on the geopolitical stage with tariffs. Trump has set a Sat deadline to slap a 25% tariff on imports from Canada & Mexico & said he was still considering new tariffs on Chinese goods. Bullion, a preferred asset during times of economic & geopolitical turmoil, is on track to record its best monthly performance since Mar 2024, rising nearly 7% so far. The metal surpassed multiple record peaks last year. Additionally, "the mixed signals coming from the Fed & the Trump administration right now is causing uncertainty in the market. Trump wants to cut interest rates, while the Fed wants to hold them steady. Earlier this week, Federal Reserve Chair Jerome Powell said there would be no rush to cut interest rates again, contradicting Trump's earlier calls saving he wants borrowing costs to be lowered.
Gold surges past $2,800 as tariff threats reignite record rally
Crude oil prices were steady but set for weekly declines as markets waited to see if Pres Trump would follow thru on his threat to impose tariffs on Mexico & Canada later this week. Brent crude for Mar, which expires today, was up pennies at $76.95 a barrel & US West Texas Intermediate (WTI) crude was up 21¢ at $72.94. For the week, benchmarks Brent & WTI are set to fall 2% & 2.3%, respectively. Crude oil prices have fallen this week on growing concerns about Trump's tariffs, which are expected to hamper global economic growth. Investors are weighing the possibility of US tariffs alongside a series of exec orders & policy announcements. Trump has threatened to impose 25% tariffs as early as Sat on Canadian & Mexican exports to the US if the 2 countries do not stop shipping fentanyl across the US border. Canada & Mexico are the 2 largest crude oil exporters to the US, but it is unclear whether crude will be included in the tariffs. Trump said yesterday he would decide soon whether to exempt Canadian & Mexican oil imports from the tariffs. In 2023, the latest full year, Canada exported 3.9 million barrels per day (bpd) of crude to the US, for 6.5M bpd of total imports, while Mexico exported 733K bpd
Crude Oil Prices Set For Weekly Decline As Trump Tariff Threat Looms
US stocks lost ground after the White House said tariffs against Mexico, Canada & China will take effect on Sat, reigniting fears of a coming trade war with the nation' closest trading partners. White House Press Secretary Karoline Leavitt said the pres would
impose 25% tariffs on goods from Mexico & Canada, as well as a 10%
tariff on goods from China. The looming Sat tariff deadline has revived worries about the
impact on the economy from a clampdown on the US's biggest trading
partners. The $ rose, headed for its best week since Nov. The uncertainty over tariffs has left Federal Reserve Chair Jerome Powell in wait-&-see mode, with
the potential for tariffs to inflame inflation in focus.
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