Vital Statistics:
Stocks are higher this morning as earnings continue to come in. Bonds and MBS are up. We will get earnings from market darling Netflix today.
The week ahead is extremely data-light, with the index of leading economic indicators and existing home sales the only really interesting data points. We are in the quiet period ahead of next week’s FOMC meeting, so we won’t have any Fed-speak. Earnings season is in full swing, so that will be the driver stocks going forward.
Here is a list of the folks Donald Trump has named for his economic policy team. Kevin Hassett of the AEI will be the leader and the focus will be on decreasing burdensome regulation. Jeff Wrase will focus on financial regulation and banking.
Trump signed a slew of executive orders yesterday, but didn’t impose tariffs quite yet. The focus was on the border, DEI, and energy. Supposedly a 25% tariff on Canadian and Mexican goods kicks in on February 1 and he is still considering universal tariffs.
The Fed Funds futures are predicting no changes to the Fed Funds rate next week. The December FF futures still see a toss up between 0-1 cuts and 2 or more cuts.
UBS is warning that interest rates might not fall as fast as hoped this year if tariffs stoke a resurgence of inflation. “Something that I’ve been saying for a while, inflation is much more sticky than we have been saying,” he told CNBC’s Andrew Ross Sorkin at the World Economic Forum in Davos, Switzerland. “The [truth] of the matter is that we need to see also how tariffs will play a role in inflation.”
“Tariffs will probably not really help inflation to come down. And therefore I don’t see rates coming down as fast as people believe,” he said.
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