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JANUARY 19, 2025 OBSERVATIONS

  • Last week’s inflation data came in weaker than expected with the PPI surprising well to the downside as well as Core CPI coming in below expectations. January weakness was effectively reversed as a result.
  • The bottom appears to be in for equities. The “buy the fact” scenario discussed last week is playing out. The massive compendium of executive actions Trump has lined up will shine light on just how friendly his administration will be for markets. 
  • Global liquidity may be inbound if the PBOC decides to further stimulate China’s economy through monetary easing. It’s additionally possible the consensus rate hike expectations from the BOJ could fail to materialize, further releasing pressure on global markets.
  • Big reversals out of oil, long-dated treasuries, and the DXY this past week. As called for several weeks ago, we were either at or near the top. Though it is too soon to declare victory, it’s clear that Trump’s pro energy and weak dollar stance are finally filtering into markets.

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FEBRUARY 9, 2025 OBSERVATIONS

A mixed bag out of jobs and unemployment data followed by shockingly high one-year inflation expectations ravaged markets on Friday. Trump’s tariff talk seems to...