Dow was up 134, advancers over decliners better than 2-1 & NAZ gained 262. The MLP index was up 2+ to the 225s & the REIT index hardly budged from 401, yesterday's close. Junk bond funds edged higher & Treasuries had modest buying which lowered yields. Oil was fractionally lower in the 72s & gold gained another 17 to 2874 (more on both below).

Dow Jones Industrials

Boeing (BA), a Dow stock, has lost more than $2B & counting on its Starliner spacecraft after a rough year in which the capsule's first astronaut flight turned into a headache for NASA. The Starliner program reported charges of $523M for 2024, its largest single-year loss to date, BA reported in a filing. The company noted that Starliner is under a fixed-price contract from NASA, so “there is ongoing risk that similar losses may have to be recognized in future periods.” Since 2014, when NASA awarded BA with a nearly $5B fixed-price contract to develop Starliner, the company has recorded losses on the program almost every year. BA's program competes with Elon Musk's SpaceX, which has flown 10 crew missions for NASA & counting on its Dragon capsules. Last summer, BA's first crew flight went awry after part of the capsule's propulsion system malfunctioned. While Starliner delivered astronauts Butch Wilmore & Suni Williams to the Intl Space Station NASA made the decision to bring Starliner back empty and use SpaceX to return the crew early this year, an agency choice that recently became politicized. Neither BA nor NASA have provided details on how or when they plan to resolve the Starliner propulsion issue. Nearly 4 months ago, NASA said it was keeping “windows of opportunity for a potential Starliner flight in 2025,” but scheduled SpaceX to fly both its crews on missions launching in spring & late summer. NASA then specified that “the timing and configuration of Starliner’s next flight will be determined once a better understanding of Boeing’s path to system certification is established.” BA stock rose 50¢.

Boeing’s Starliner losses top $2 billion after program reports worst year yet

The first volleys in the latest US-China trade war made clear that Xi Jinping is taking a more cautious approach than during Donald Trump's first term. After the US leader gave a last-minute reprieve to both Canada & Mexico, his 10% tariffs on China took effect after midnight DC time today. Beijing announced additional tariffs on roughly 80 products to take effect on Feb 10, launched an antitrust investigation into Google (GOOG), tightened export controls on critical minerals, & added 2 US companies to its blacklist of unreliable entities. The swift but calculated retaliation signaled that Beijing had learned a lesson from its first trade fight with Trump, when China retaliated with tariffs on par or close to what the US imposed. This time Xi only put tariffs on $14B worth of American products, a sliver of what Trump targeted, while taking other measures that showed off China's ability to inflict further pain on US companies if needed. The shift reflects both Xi's success at diversifying imports away from the US since Trump’s first term, as well as China's more precarious economic situation. The Chinese leader has been relying on manufacturing & overseas sales to keep growth ticking along as he moves to burst a property bubble, all while dealing with increased deflationary pressure. China is being restrained because it “has more to lose,” due to its huge trade imbalance with the US, according to Larry Hu, head of China economics at Macquarie Group Ltd. “A full-blown tariff war is not in China’s interest,” he added. “Instead, China is likely to respond to tariffs mainly through domestic stimulus.”

Xi's reply to Trump tariffs shows China has more to lose

General Motors (GM) is laying off roughly ½ of the employees who remain at its discontinued Cruise robotaxi business. The plans come 2 months after GM said it would no longer fund Cruise after spending more than $10B since acquiring the self-driving car business in 2016. “Today, Cruise shared the difficult decision to part ways with approximately 50% of its workforce,” Cruise said. “We are grateful for their passion and contributions to help us reach this stage, and our focus is on supporting them into their next chapter with severance packages and career support.” Cruise had nearly 2300 employees as of the end of last year. In an internal email sent to all Cruise employees, Cruise Pres & Chief Administrative Officer Craig Glidden wrote that the 50% reduction came “as a result of the change in strategy we announced in December.” “With our move away from the ride-hail business and toward providing autonomous vehicles to customers alongside GM, our staffing and resource needs have dramatically changed,” Glidden wrote. He added that a string of execs will also depart this week. Mo Elshenawy, pres & chief technology officer, will stay on at Cruise thru the end of Apr to help with transition duties. GM stock rose 75¢.

GM cuts 50% of Cruise staff after ending robotaxi business

Gold prices regained an all-time high, driven by investors seeking the safe-haven asset after China retaliated with tariffs on the US in response to Pres Trump's tariffs. Spot gold gained 1.1% to $2844 after hitting a record high of $2845 earlier in the session. US gold futures settled 0.7% higher at $2875. The tariff news came out like it did overnight became the main driver more than any other thing that came out today. The $ fell 0.9%, making gold less expensive for other currency holders. China imposed tariffs on US imports, swiftly responding to new US duties, escalating the trade war between the world's top 2 economies even as Trump offered reprieves to Mexico & Canada.

Gold hits record high as investors flock to safe-haven amid tariff war

US oil prices slipped on tariff drama between DC & Beijing, then pared losses after an official said Pres Trump plans to restore his maximum pressure campaign on Iran in a bid to drive down Iranian oil exports to zero. The official said Trump's directive orders the Treasury secretary to impose maximum economic pressure on Iran, including sanctions & enforcement mechanisms. US West Texas Intermediate (WTI) crude was trading down 19¢ at $72.97 a barrel. Oil came under pressure early as new 10% US tariffs on Chinese imports took effect today, spurring retaliatory tariffs announced by Beijing. At its session low US crude was down more than 3%, the lowest since late Dec. Global benchmark Brent crude futures rose 42¢ (0.6%) to $76.38. Trump had driven Iran's oil exports to near-zero during part of his first term after re-imposing sanctions. They rose under former Pres Biden's tenure as Iran succeeded in evading sanctions. The reason why oil was down near the lower end of the trading range was the China retaliation, & it went back up because of the maximum pressure on Iran. Iranian crude exports shot to the highest level in years in 2024 as the country found ways to sidestep punitive sanctions.

US oil pares losses as Trump set to reimpose 'maximum pressure' on Iran

Beijing reacted swiftly to Trump's additional 10% levies on Chinese imports going into effect at midnight. China slapped tariffs of 15% on US coal & liquefied natural gas, starting Feb 10, alongside 10% duties on imports of crude oil, farm equipment & some autos. Tit-for-tat measures raise the risk of an escalation into trade war that would damage both of the world's top economies. However some see the Chinese response as showing restraint that opens the door to compromise, as seen in the US tariff postponement deals with Mexico & Canada.