Drill baby, drill pledge sends oil prices down today
Oil slid as U..S President Donald Trump promised to boost U.S. crude production. Brent crude retreated almost 1% to near $80 a barrel.
Morning Briefing
Here’s the state of U.S. debt before President Trump takes office
Here’s the fiscal grim status of the United States on the Friday before Donald Trump is sworn in as President on Monday, January 20.
As of January 17, 2025, the U.S. national debt stands at approximately $36.17 trillion. This figure represents the total outstanding public debt of the United States government and can be broken down into two parts. Debt held by the public of $28.83 trillion and intragovernmental debt, that is debt that one part of the government owes to another, of $7.34 trillion. But in some ways that’s the good news.
Big market reaction on a tiny move in CPI inflation
As of noon New York time today, January 15, the Standard & Poor’s 500 was ahead 1.30%. The NASDAQ Composite and the small-cap Russell 2000 were both up 1.80% on the session. Today’s big moves come on relatively minor changes in inflation trends in this morning’s report on CPI inflation in December. And I think they have more to do with how afraid Wall Street is that the Federal Reserve isn’t going to deliver at least one or two interest rate cuts in 2025 than with any big news in today’s report. The consumer price index (CPI) rose at an annual rate of 2.9% in December, up from a 2.7% annual rate the previous month. That increase was in line with expectations. On a month-to-month basis, the index rose 0.4%. The “core” index, which strips out volatile food and energy prices and is much more important to the Fed than the headline inflation number, rose at a 3.2% annual rate in December. That was down slightly from its annual rate of 3.3% in November, and less than economists had expected. It’s this dip in the annual rate of core inflation that has investors feeling so optimistic today.
More oil and lower oil prices into 2026
Global oil markets will face a widening glut in 2026 as OPEC brings back production and output from the United States, Canada and Guyana continues to grow, the U.S. Energy Information Agency said today, Tuesday, January 14. Today’s forecast was the agency’s first for 2026. World oil markets are expected to average a surplus of 800,000 barrels a day in 2026, the Energy Information Administration. That’s more than twice as large as the 300,000 barrel a day surplus the agency projects for 2025.
Apple’s fourth quarter iPhone stumble is bad news for stocks
Apple (AAPL) sold 5% fewer iPhones globally and lost ground to Chinese rivals in the last quarter of 2024.
The iPhone slipped a percentage point to a 18% worldwide market share in 2024, according to Counterpoint Research data. rival Samsung Electronics also gave up share to Android smart phone makers from China, led by Xiaomi and Vivo. For the full year, Apple saw a 2% decline in sales, according to Counterpoint Research. In 2024 the global smart phone market grew by 4%.
Jobs surprise–economy delivers stronger than expected performance in December
In December U.S. economy in December added the most jobs since March and the unemployment rate unexpectedly fell. Nonfarm payrolls increased 256,000, exceeding all but one forecast in a Bloomberg survey of economists. The unemployment rate fell to 4.1%, while average hourly earnings rose 0.3% from November, a Bureau of Labor Statistics report showed Friday. For 2024 as a whole, the economy added 2.2 million jobs—-below the 3 million increase in 2023 but above the 2 million created in 2019. The data almost certainly assured that the Federal Reserve would not cut interest rates at its January 29 meeting. As of 11 a.m. New York time, the yield on the 10-year Treasury had climbed another 5 basis points to 4.74%.
China’s deflation problem got worse in December
China’s consumer price index rose 0.1% in December from a year earlier, in line with the median forecast of economists surveyed by Bloomberg. Factory deflation extended into a 27th month, though the producer price index recorded a slower drop of 2.3%, the National Bureau of Statistics said Thursday. For the full year, consumer prices only inched up 0.2% from 2023, well short of the 1.1% gain economists had predicted at the beginning of 2024.
Fed’s December minutes another nail in the coffin for early interest rate cuts
In minutes from the Federal Reserve’s December 17-18 meeting released on Wednesday, January 8, Federal Reserve officials clearly decided to move more slowly on cutting interest rates in the quarters ahead. “Participants indicated that the committee was at or near the point at which it would be appropriate to slow the pace of policy easing,” minutes from the Federal Open Market Committee showed. “Many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters.” Please note the reference to “quarters” and not “months.”
More bad news for stocks from the bond market today
The 20-year Treasury bond, a laggard on the government debt curve since its re-introduction in 2020, topped 5% Wednesday for the first time since 2023. The move looks to be fueled by concern that President-elect Donald Trump’s policies on tariffs and tax cuts will lead to wider deficits and rekindle inflation.
Stocks fall as they begin to price in no rate cut until July
The Institute for Supply Management’s index of services advanced 2 points to 54.1 last month. That show of strength in the economy–readings above 50 indicate expansion–was enough to push stocks lower as the markets began to price in a delay in the next interest rate cut from the Federal Reserve until July The measure of prices paid for materials and services rose more than 6 points to 64.4, suggesting that the drop in the inflation rate in the service sector–about 70% of the U.S. economy–might be over.
Tariff trial ballon on how much and who will get hit?
Today the Washington Post reported that President-elect Donald Trump’s aides are exploring tariff plans that would amount to paring back–the Post’s characterization–the tariff plans that candidate Trump proposed on the campaign trail.
President-elect Trump immediately hit back on social media saying the Post story was made up and there were no such sources from his team.
Nvidia to get pop from CES and Huang keynote
Last year, Nvidia’s stock experienced a 16% increase over the 10 days following the beginning of the huge Consumer Electronics Show in Las Vegas. This year Nvidia (NVDA) CEO Jensen Huang is scheduled to deliver the opening keynote speech at 6:30 p.m. Las Vegas time. (That’s 9:30 New York time.) I’d expect a couple of volatile days for Nvidia shares following Huang’s talk.
Jim’s Stock Alerts
Download Jim’s eBook for Free
