But I thought we just made a deal to sell more F-150s in Tokyo, how could the market be down?
Yucky jobs report is more of the issue today than tariffs.
That’s in the rearview mirror. We’re about to onshore all the manufacturing jobs in the world.
And, we’re going to use AI to do all this work and it’ll replace a ton of jobs so that people can go work in manufacturing … where the jobs will also be replaced by AI.
It’s brilliant. S&P 10,000 baby. How could it possibly fail?
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But it might encourage Powell to lower interest rates?
That could buoy the market when it happens.
I liked Richard Quest’s rant on all these foreign promises to buy American goods and invest in America.
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FOMC just met and held steady this Wednesday. Next meeting isn’t until September. So you’re correct, but, the timing sucks to act on the data.
The F150 is a little too big for most foreign roads. It’s just not going to be a big seller internationally.
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He is very likely correct in that those countries will delay these promises.
But he forgets that the people around Trump will be tracking these things, so they will tell him. Which means Trump will very likely threaten those countries with tariffs again.
After the latest Trump move (firing the head of BLS) I don’t think they will be able to stop him appointing an apparatchik at the Fed.
Which means it is now much more probable that a low rate environment and higher tariffs might interact in 2026.
The product of that will be higher inflation. If you own assets then you will likely be ok. If you don’t, then it is likely you will be getting poorer.
I have never seen a more volatile macro-economic environment. Trump is creating the foundations of an enormous asset and credit bubble.
So is it better to refinance a mortgage now or later?
Seems link in the short term Trump might drive down interest rates.
However, long-term, it seems like they might skyrocket.
Rates will go down if he appoints an apparatchik at the Fed. Of that I am reasonably certain.
But that will only be short-term ones.
The Fed can largely do bupkis on the long-end, thats determined by the market. The Fed only nudges things along on the short-end. And in a higher expected inflation environment (inflation expectations will go up again) they will stay higher.
Problem with all of this is you cannot forecast things with any degree of accuracy now over 5Y because Trump may wake up one day and do something even more batshit.
Personally, I would lock in a rate now and work to batten down your finances and investments so that you are less exposed to inflation and taxes (this is why gold coin sales are going through the roof now).
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We could see a disconnect between fed funds rate and mortgage rates. They might end up going in opposite directions. It’s crazytown. Really lucky we refinanced near the bottom. Can’t imagine trying to navigate buying a house in this environment.
We can change the thread back to “stocks go up, and up, and up no matter what” - especially in light of things like this.
Announcements like Caterpillar scream “lower earnings” whether it’s companies eating the tariffs directly or passing on the costs to consumers who then revolt and halt spending / try to find alternate goods for cheaper. Then, extrapolate that across every company saying the same things CAT is. But, that doesn’t matter because somehow AI is going to save everything and produce everything.
The only thing keeping the markets up right now are the ~7 AI-based stocks, which are predicated on the notion that by 2030 pure CapEx on AI is going to be $3 trillion, and when you add in the knock-on spending around it the total will be somewhere around $5 trillion, not including likely higher energy costs associated with running 10,000 data centers around the U.S. to produce a smorgasboard of shit.
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Meanwhile at least one AI company had a miss on the latest earnings and just dropped 20%
I’m really unsure how/where we’re going to go with AI. It does lots of really neat things, but I’m not sure how well we can afford it or how much people would be willing to pay for it. I’m still trying to decide how useful it is. I’m loving it for helping my programming, but it definitely needs babysitting as what it suggests often doesn’t work, particularly when the documentation is out dated or has recently changed.
I think I’m stuck with its making skilled workers more productive and unskilled workers more dangerous and it’s going to make scams and cold call sales agents more dangerous/obnoxious.
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We are going to see a skilling issue when it comes time for today’s new grads to take on management positions, which will be compounded by the issues that have been caused by the WFH and hybrid arrangements caused by COVID.
That’s where I’m at right now. While I am generally in favor of democratizing data, making analysis easier and easier has a real risk. I know some years back I worked with someone who was learning Tableau, and they found some data and made a dashboard that looked slick, and was pretty easy to interpret and use. Except he hadn’t done his homework, and there were a lot of things that were fundamentally wrong.
Having a great report that nobody reads, that’s a problem. Having a shitty report that looks great and people do read, that is indeed dangerous.
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Can you say jinx?
Suggested new thread title: “Stocks take a random walk”
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So do we have any guesses as to when they’ll be coming down and the trigger?
Rising inflation (from tariffs now)
Low rates (by Trump starting 2026)
Massive credit leverage (cheap money)
Crypto (even more leverage)
I don’t see how they keep that going for very long. The US is already starting to show damage at the employment level, and you have profit margins materially being cut for goods. The only thing holding the US up is the service sector (tech mostly) with the lag effect from tariffs/accumulated inventories giving them a few more months until prices really start rising.
I suspect that they will try to keep this going until the midterms for votes. Whether it blows up before then is anybodies guess at this point.
Just to add that I am 0% US stocks or any other assets. I have little doubt at this point that Trump will damage the US to such an extent it will take decades to recover.