U.S. consumers’ expectations for long-term inflation rose to the highest rate in three decades, in February’s consumer sentiment survey from the University of Michigan. Consumers expect prices will climb at an annual rate of 3.5% over the next five to 10 years. The rate is the highest since 1995,
Walmart (WMT) forecast lower than expected profit for 2025. The company said it’s anticipating adjusted earnings of $2.50 to $2.60 per share, below the average projection of $2.74 a share by Wall Street analysts. As of noon New York time today Walmart shares were down 6.8% as the lower guidance outweighed strong results for the just concluded quarter. Both top and bottom lines came in higher than Wall Street expected in the retailer’s quarter and fiscal 2025. Quarterly revenue increased 5.3% year over year to $183 billion, while adjusted earnings per share were up 10% to 66 cents a share.
Today Goldman Sachs Group raised its year-end target for gold to $3,100 an ounce. Central banks are buying gold at a faster than expected pace and flows into gold ETFs are accelerating.
Semiconductor chips and drugs are set to face higher duties, Trump told reporters at a news conference on Tuesday.“It’ll be 25% and higher, and it’ll go very substantially higher over the course of a year.” Asked if he had decided the rate of a threatened tariff on cars from overseas, Trump said he would “probably” announce that on 2 April, “but it’ll be in the neighborhood of 25%”. But are these “announcement’s real?
CPI inflation rose by more than expected in January, as prices for groceries, housing and energy all picked up. The headline, all-items Consumer Price Index rose by 3.0% in January from a year earlier, the Labor Department reported Wednesday morning. That’s slightly above the 2.9% annual rate reported in December. The core index, which strips out volatile food and energy prices, was also higher, showing a 3.3% annual rate.
The U.S. Treasury Department cut the size of some benchmark bill auctions, as the government tries to stay below the legal limit of its borrowing authority under the debt ceiling. Treasury said it plans to sell $90 billion of four-week bills Thursday, $5 billion smaller than the previous offering of the maturity. It also announced $85 billion of eight-week bills to be sold Thursday, which is also $5 billion smaller. The regular 17-week bill to be sold Wednesday was lowered to $62 billion, a $2 billion reduction. Those are the first reductions for the four- and eight-week offerings since December 26, and the first ever cut to the 17-week issue.
On Sunday, President Donald Trump told reporters on Air Force One that he plans to impose 25% tariffs on all U.S. imports of steel and aluminum. Trump said the tariffs would apply to shipments from all countries, including major suppliers Mexico and Canada. No word yet on Monday as of 11 a.m. New York time on when the duties would take effect.
The U.S. economy added 143,000 jobs in January, a slower but solid pace that was a tick below economist forecasts. The unemployment rate dipped to 4%. The labor market slowed compared to December. That December report was revised Friday to show 307,000 jobs gained that month. Average hourly wage growth accelerated, rising by 4.1% rate over the past 12 months. That wage gain was above the rate of inflation.
On Wednesdatmay, February 5, newly minted Treasury Secretary Scott Bessent said the Trump administration’s focus with regard to bringing down borrowing costs is 10-year Treasury yields, rather than the Federal Reserve’s benchmark short-term interest rate.
Now that Canada and Mexico have earned a one-month delay in the 25% tariffs President Donald Trump had proposed to implement today, Tuesday, February 4, Wall Street is struggling to figure out if a similar deal with China will roll back the 10% hike in tariffs on imports from China that went into effect today. So far, Wall Street is betting on another deal to keep the global economy out of a full-scale trade war. Today the Standard & Poor’s 500 rose 0.72% and the NASDAQ Composite gained 1.35%. I can understand the optimism. I just don’t agree with it.
Futures markets are substantially lower as U.S. stocks get ready to open. Futures on the Standard & Poor’s 500 were down 1.64% and NASDAQ futures were off 1.87%. But I still say that Wall Street is in denial about the full economic damage from President Donald Trump’s tariffs.
I expect a two-ring (at least) circus on Capitol Hill as Congress confronts two years worth of budgets. By law, the President is required to submit a budget for the next fiscal year–in this case the 2026 fiscal year that begins on October 1 2025–by the first Monday in February. Yes, tomorrow, February 3. Maybe you remember, however, that Congress hasn’t passed a budget for fiscal 2025–the fiscal year that began on October 1, 2024. And that the government is operating under a continuing resolution (a CR) that expires on March 14.
