April 3, 2025
What You Need to Know Today:
Another day, another tariff “plan”
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.
When does that U.S.-China tech trade war arrive? Right about now
Yesterday, Tuesday, December 3, China retaliated to a new round of U.S. technology restrictions from the Biden Administration with a ban on exports of high-tech minerals gallium, germanium, and antimony. Beijing will also place tighter controls on sales of graphite. On Monday the White House slapped new restrictions on the sale of high-bandwidth memory chips made by U.S. and foreign companies to China. The measures blacklisted 140 additional Chinese entities with a focus on companies that produce chip manufacturing equipment that’s crucial to China’s pursuit of semiconductor self-sufficiency. The metals targeted in China’s export ban are used in everything from semiconductors to satellites and night-vision goggles.
Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…
I the Big Event to be Friday morning’s report of the November jobs numbers. The Dow Jones Industrial Average rose more than 2% last week. The Nasdaq Composite and the Standard & Poor’s 500 rose more than 1%. Both the S&P 500 and Dow Jones ended November at all-time highs. A ”good” jobs report, which is likely, will keep the records coming for at least another week–until the usual Fed meeting jitters set in on the run up to the central bank’s meeting on December 18.
Adding Berkshire Hathaway as Pick #9 in my Special Report “10 New Stock Ideas for an Old Rally”
Today I added Berkshire Hathaway (BRK-B) as Pick #9 in my Special Report “10 New Ideas for an Old Rally.” Here’s what I wrote in that Special Report.
Next Friday’s big number for inflation, interest rates, and the Fed
At 8:30 a.m. on Friday, December 6, investors will see the U.S. jobs report for November. Economists expect that the economy added 200,000 jobs in the month and that for the unemployment rate will hold steady at 4.2%.
More evidence that the inflation rate is stuck
Yesterday, Wednesday, November 27, the report from the Bureau of Economic Analysis showed that the Personal Consumption Expenditures index, the Federal Reserve’s preferred inflation measure, had continued the stall that began in May.
Special Report: 10 Great Growth Stocks that Are Getting Greater–today my 9th pick PANW
GREATER Growth Stock Pick #9: Palo Alto Networks (PANW). I’m not going to try to convince you that shares of cyber-security favorite Palo Alto Networks are a value stock. It trades at 166 times trialing 12-month earnings per share. And I’m not going to try to convince you that this is an undiscovered stock that’s going to sneak up on anyone. The shares was up 111% in 2023. (The stock has been a member of my long-term 50 Stocks Portfolio since July 17, 2019. In that time the position is up 296%.) But remember the point of this Special Report–I’m looking for great growth stocks, which aren’t cheap in this market by any means, with catalysts in the next year or two that will push growth higher. And here I think Palo Alto Systems rings the bell three times over.
Live Market Report (20 minute delay)
Looking for signs of weakness in consumer spending? Did we just get one?
Consumer spending, which accounts for about 70% of U.S. economic activity, rose an annualized 0.8% in the April-to-June quarter, according to the third estimate of gross domestic product from the Bureau of Economic Analysis. The last estimate put the annualized growth rate at 1.7%.
Mortgage rates hit a 23-year high–is this the peak? (Probably not)
Mortgage rates surged to a 23-year high this week. The rate on the average 30-year fixed mortgage increased to 7.31% from 7.19% the week prior, according to Freddie Mac. That’s the highest rate since mid-December 2000, when it averaged 7.42%.
I just added moves 5,6, and 7 to Part 2 of my Special Report: Your 10 Best Moves for the Rest of 2023
I added three more moves to the four that I’d posted yesterday to bring the total moves in Part 2 of my Special Report up to 7.
Special Report: Your 10 Best Moves for the Rest of 2023, Part 2–10 of 10 Moves (revised on 10/22)
So what do you do with your portfolio for the rest of 2023? And what’s your best strategy to be prepared for 2024? In Part 1 of this Special Report I laid out the 10 developments that I thought would drive the financial markets for the rest of 223 and into 2024. Today, in Part 2, I’m going to give you the first 2 of 10 moves to take–with as much detail and as many specifics as possible–that you should be making now to position your portfolio for the uncertainties of the last quarter of 2023.
Notes You Need for September 25: MSFT market fuel, cost of car ownership, Goldman fine, Micky Dee franchise fees up, CSCO buys SPLK
I haven’t done one of these in a while, but I think that this current market is throwing up lots of hints that might contribute to an investing thesis but that don’t deserve a full post. So here I go with Notes You Need again.
Have you missed it? Some stocks are on the brink of a correction
The Standard & Poor’s 500 index (closing price) peaked on July 31 at 4588.96. The index is down 5.9% since then (as of the September 22 close.) That’s not correction territory (a drop of 10% ore more) but I’d say stocks can feel the hot breath of a correction on the back of their necks, The small-cap Russell 2000 Index has lost more than 11% from its July 31 closing high, roughly twice the decline in the S&P 500 Index over the same time. There are other signs of trouble in the stock market.
Buying VIX Call Options on signs that volatility is rebounding
Tomorrow, Monday, morning I’ll buy CBOE S&P Volatility Index (VIX) Call Options (so the options will go up in price if volatility does) for my Volatility Portfolio. I’m buying the December 20 Call Options with a strike price of 17 (VIX231220C00017000.)
Saturday Night Quarterback says, For the week ahead expect…
Expect dueling news watches this week. Garnering most of the pixels will be the countdown to a government shutdown if Congress doesn’t pass a stopgap continuing resolution to keep funding the federal government by September 30. Odds are good right now that the House of Representatives won’t meet the deadline and the many government departments will shut down next week. And on Friday, investors get the next release of the Federal Reserve’s favorite inflation series, the Personal Consumption Expenditures index.
A shutdown of the Federal government is almost certain in the next 8 days
Yeah, you’ve read all the stories about who will get hurt by a government shutdown–folks who need passports, communities in need of disaster aid, childcare centers, air travelers–and I’m sure your full up to your eyeballs with stories about how the Republican majority in in House is so dysfunctional that Speaker Kevin McCarthy couldn’t win a vote to declare water wet. But I’ve got some really good news: because the statisticians who compile the data on GDP, employment trends, producer and consumer prices, and other indicators that track the economy will be furloughed if the government shuts down, we’re not likely to know the full extent of the damage until we’re well into what could be a prolonged shutdown. Of course, it’s not clear that not knowing will be appreciated by financial markets that are already looking a bit anxious.
Bad news for housing; bad news for the economy
In its interest rate policy decisions, the Federal Reserve is trying to figure out how much of past interest rate increases have already worked their way through the economy and how much of a slowdown is still to come. Today’s housing number from the National Association of Realtors doesn’t answer that question, but the data certainly suggests that the slowdown is still slowing down. The number of previously owned homes sold in the United States dropped by 21% percent over the past year
A tough day for tech–Part 2, Bad news from Adobe (and selling Adobe out of my Volatility Portfolio)
Now that Fed day is done and behind us, we return to our regularly scheduled programming. Back on September 15, I posted “A tough day for tech–Part 1” after news on Taiwan Semiconductor Manufacturing (TSM) reporting that the company was slowing orders with suppliers of chip making equipment because of sluggish demand for chips from its customers. Now onto Part 2 of bad news for tech stocks.
No (2023) surprises Fed surprises on 2024
At today’s meeting the Federal Reserve’s Open Market Committee left the central bank’s policy interest rate at 5.25% to 5.50%. In its Dot Plot forecast the Fed signaled one more interest rate hike for 2023. In its forecast the bank said that rates would end 2023 at 5.6%. That’s roughly 25 basis points higher than today. None of this was surprising. The markets were looking for the Fed to stand pat at this meeting. Odds of that according to the CME FedWatch Tool were above 98% heading into the meeting. The market was calling the possibility of one more interest rate incree in 2023 essentially a coin toss. But the Fed did surprise for 2024.
Watch the VIX after today’s Fed meeting
The CBOE Volatility Index, which measures short-term volatility in the Standard & Poor’s 500 stocks, has been stuck below its long-term average of near 17 since the regional bank crisis of March 2023. In recent months, the VIX has had a hard time breaking above 17 with the index spending most of its time down about 15. Today, at 1 p.m. New York time, the VIX was at just 14.01, down 0.71% ahead of the Federal Reserve’s interest rate decision. There’s just no fear in this market. So it will extremely interesting to see if today’s interest rate decision and the release of new Dot Plot forecasts for interest rates, inflation, economic growth, and unemployment today from the Fed has any effect of market complacency.
Special Report: Your 10 best moves for the rest of 2023–Part 1, 10 trends for the rest of 2023
In this Special Report I’m going to start by sorting out the data that the market’s moves will likely depend on for the rest of 2023. That’s today’s post, Part 1 of this Special Report. Then I’ll try to handicap the likelihood that the data will zig or zag. And give you a sense of how far away from the current consensus the actual result might fall. And then finally, I’ll give you 10 moves for the rest of 2023 that are the most likely, in my opinion, to result in profits and that won’t wind up costing you big if the data winds up throwing investors a curve.
What to watch for in Wednesday’s Dot Plot from the Fed
Here’s my cheat sheet of what to watch for in Wednesday’s Dot Plot revision of the Federal Reserve’s forecasts for the rest of 2023 and 2024. The last revisions before this came at the Fed’s June meeting so there’s reason to think that the Fed will have something market-moving to say about how it sees the economy, interest rates, inflation, and unemployment trending over the next year and a half.
Saturday Night Quarterback says, For the week ahead watch…
Watch what the Federal Reserve says on Wednesday not what it does at the interest-rate setting meeting of the Open Market Committee. Everybody, I mean everybody, expects that the Fed will hold its benchmark interest rate steady at the current range of 5.25% to 5.50%. The odds, calculated from prices in the Fed Funds Futures market by the CME FedWatch Tool, stand at 98% that the central bank will do nothing. But this meeting also includes an update of the Fed’s Dot Plot forecast for future interest rates, inflation, unemployment and GDP growth. And those numbers will give investors the best available clue on what the Fed will do at its November meeting and int 2024.
A tough day for tech–Part 1, bad news from chip makers
Taiwan Semiconductor Manufacturing (TSM), the company that makes the chips for everyone from Apple to Nvidia, has told suppliers to delay some deliveries amid concerns about slowing chip demand, according to a new report Friday from Reuters. The company has told large chip-equipment suppliers to delay some deliveries, Reuters reported. The company is “increasingly nervous” about demand from its customers, the report said.Last week, the company said its August revenue fell 13.5% from last year but rose 6.2% from the prior month. As you might imagine, the news wasn’t greeted with cheers by investors in technology stocks.
Will it work? People’s Bank tries to boost growth without tanking the yuan
The People’s Bank of China cut the amount of cash banks must hold in reserve for the second time this year. The move is an effort to boost flagging economic growth in China. The bank could have cut its benchmark interest rate in pursuit of the same goal. But that would have led to more selling against the yuan and the People’s Bank has been busy in the trenches in recent weeks trying to prop up the yuan agains the dollar. The question, of course, is whether the cut in reserve requirements will be enough, without a reduction in interest rates, to revive growth in China’s economy.
European growth will get weaker with latest ECB interest rate increase
The European Central Bank raised its main deposit rate by a quarter of one per cent to 4% today. That’s the highest level in the history of the euro. Economists are suggesting–maybe “hoping” would be a better word–that this will be the last interest rate increase in this cycle for the ECB. The latest increase comes as Euro Zone economies flirt with recession
Moderna shares popped 3.2% yesterday–here’s why
Shares of Moderna (MRNA) closed up 3.18% yesterday, September 13, on news that
1. The Food & Drug Administration has approved updated Covid-19 vaccine boosters (including one from Moderna) and that the Centers for Disease Control was recommending the boosters for adults and children older than 6 months. 2. The company announced that the newest results from Phase 3 clinical trials for an updated version of its flu vaccine, mRNA-1010, had met all primary endpoints in a Phase 3 trial, Compared to Glaxo’s Fluarix, Moderna’s vaccine showed higher antibody levels for all four influenza strains (two each for influenza A and B) recommended by the World Health Organization (WHO) as well as higher seroconversion rates. This comes after an earlier version of the vaccine failed to demonstrate superiority for the B strains. The company expects to meet with regulators very soon and, depending on guidance received, the flu shot could launch as soon as next year, CEO Stephane Bancel told Fierce Biotech. “We’ll know more in a few months when we speak to regulators, but [we’re] trying to go as fast as we can,” he said. Of these two pieces of news I’d say No 2 is way, way more important
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