“If you’re saving, you’re succeeding.”
-Steve Burkholder
Here’s what you need to know this week:
- Stocks brush all-time highs on Friday
- Markets swing on tariff announcements
Hold Steady
Stocks rose last week and nearly reached all-time highs due to multiple rosy economic reports. The first was the final GDP report for the year which showed the US economy growing 2.3% annualized in the fourth quarter of 2024 and 2.5% for the year[1]. These numbers both surpassed analysts’ expectations and show that our economy is expanding at a very healthy rate. Next was the Personal Consumption Expenditures (PCE)report for December, which showed annualized inflation at 2.6%[2]. This was in line with analysts’ expectations and increases the odds of an interest rate cut somewhere down the line.
The Federal Reserve met on Wednesday and unsurprisingly chose to hold rates steady. The next Fed meeting is on March 19th and there is a little more uncertainty as to what the Fed will decide to do. As of writing, the bond market is assigning a 15% chance of an interest rate cut at the next meeting and an 85% chance of no cut[3]. Of course, a lot can change between now and then…
Tariffs(?)
President Trump announced on Friday that he would initiate a blanket tariff of 25% on all Mexican and Canadian imports (with a carveout of 10% for Canadian oil) as well as a 10% tariff on Chinese imports. A tariff is a tax on an import coming into a country, so these tariffs would raise the cost of any imported goods from these nations. Stocks sold off strongly on this announcement, falling more than 2% on Monday morning.
However, President Trump and Mexican President Sheinbaum jointly announced on Monday morning that Mexico will be sending 10,000 troops to the border to help stop illegal crossings and fentanyl trafficking, and as a result the US will postpone the tariffs by at least one month. Markets were pleased with this announcement and gained back roughly half of the losses from the initial selloff. As of writing Canada is in the midst of negotiations with Trump and it is possible that the Canadian tariffs will also get postponed or canceled. If the tariffs materialize then we will take a deeper dive into the exact implications of the tariffs, but for now it’s safe to assume that investors prefer a market without tariffs based on the initial market reaction.
What Else
- Multiple Trump appointees including Robert F. Kennedy Jr. are currently going through their confirmation hearings in Congress
- President Trump is set to meet with Israeli Prime Minister Benjamin Netanyahu in an attempt to broker a peace deal between Israel and their adversaries
- 67 people were killed when a Blackhawk helicopter collided with an American Airlines flight over Washington D.C.
- The southern California wildfires have been contained but the region is still at risk of mudslides
- The Dallas Mavericks shocked the NBA by trading their superstar Luka Doncic to the Los Angeles Lakers
- The Kansas City Chiefs and Philadelphia Eagles face off in Super Bowl LIX this Sunday, February 9th
What We’re Reading
The small town of Summerville is famous in South Carolina for strange lights and sounds that have spawned stories of ghosts and hauntings. However, seismologist Susan Hough believes a strong earthquake in 1886 and subsequent “shallow earthquakes” are the origin of the strange lights and sounds. Click below to learn more:
What’s Happening Downtown
The Civic Center Music Hall is hosting a live performance of Swan Lake starting this Friday and running through next weekend. Tickets start at $29 per person, 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] Ernst & Young [2] Investopedia [3] CME Group