“Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it.”
-Warren Buffett
Here’s what you need to know this week:
- Stocks slightly gain on a strong jobs report for January
- Markets absorb new tariff prospects
Job Gains
Stocks rallied last week on the release of the Bureau of Labor Statistics jobs report for the month of January. The report showed the US economy adding 143,000 new jobs as well as upwards revisions of the November and December reports which added another 100,000 jobs[1]. The report also showed the unemployment rate unexpectedly falling to 4% signifying ongoing resilience in the labor market:
The report also showed wage gains rising by 4.3%, another strong sign for the labor market.
This strong report lowered the odds of an interest rate cut at the Federal Reserve’s next meeting in March: as of writing, the odds of a rate cut have fallen to just 4.5%[2]. However, the markets have taken these falling odds in stride, suggesting that investors are becoming less concerned about interest rate cuts as long as the economy keeps growing at this pace.
More Tariffs
President Trump signed an executive order on Monday that will impose a 25% blanket tariff on all steel and aluminum imports beginning on March 12th[3}. This order drew swift condemnation from international counterparties such as Canada, Germany and the European Union. These tariffs are in addition to the Mexican, Canadian and Chinese tariffs that have been paused but are still slated to begin at the end of the month.
Analysts are still torn as to whether these tariffs will actually be implemented and to what magnitude, versus using them as a bargaining chip. President Trump enacted similar tariffs of 25% on foreign aluminum and 10% on foreign steel during his first term but rescinded them on multiple countries in exchange for concessions on trade and national security. Markets are slightly up since the announcement, implying that investors currently see them as more of a bargaining tactic than an imminent policy move. Barring a surprise move in the upcoming Consumer Price Index (CPI) report later today, the potential tariffs are likely to be the driving market story over the coming weeks.
What Else
- The price of gold reached a new all-time high of $2,900/oz
- Israel’s military withdrew from a corridor dividing Gaza as part of their ceasefire agreement
- Elon Musk offered to buy OpenAI for nearly $100 billion as the AI arms race heats up
- The Philadelphia Eagles defeated the Kansas City Chiefs 40-22 in Super Bowl LIX
- NBA All-Star Weekend takes place this Friday through Sunday
What We’re Reading
This February will provide an exceptional viewing experience for space lovers. Thanks to an alignment of orbits, Mercury, Venus, Mars, Jupiter and Saturn will all be visible to the naked eye while Uranus and Neptune will be visible using binoculars or a telescope. Click below to learn the schedules for the planets as well as tips for optimal viewing:
What’s Happening Downtown
The Glenn Miller Orchestra will play at the Civic Center Music Hall next Wednesday, February 19th. Tickets start at $66 and the show will begin at 7:00 PM. Click below to learn more:
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, Brandon Ingerson, Jenni Hess
Sources: [1] Yahoo! Finance [2] CME Group [3] CBS