Years ago there was a TV commercial about a kids’ toy called Weebles, which “wobbled but they don’t fall down.” The line comes to mind in reviewing recent market activity. Since returning to the White House last month, President Trump has outlined a wave of policy changes, plans and comments that have roiled markets and shaken expectations about the economic outlook. But for the moment, the latest squalls of volatility have come and gone, leaving an upside trend that’s a bit battered but mostly intact.
Macro Briefing: 06 February 2025
US companies accelerated hiring in January, according to the ADP Employment Report. Private payrolls increased 183,000, marking a faster pace for a second straight month. “Hiring momentum in the last quarter of 2024 carried into January with some exceptions, including manufacturing,” notes Nela Richardson, ADP’s chief economist. “We had a strong start to 2025 but it masked a dichotomy in the labor market. Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”
Treasury Yields Edge Lower Despite Threat Of Trade War
President Trump’s comments and executive orders have roiled markets and investor expectations, but from the vantage of the Treasury market a relative calm prevails. This could change, of course, but for now key yields for government bonds are flat to slightly lower in recent days.
Macro Briefing: 05 February 2025
US job openings fell to a three-month low in December. The downshift highlights an ongoing slide in openings, which suggests that the labor market’s expansion will continue to slow. The job-openings data “is consistent with the Fed’s view that the labor market is healthy enough to tolerate a more cautious approach to lowering rates, particularly given the uncertainty surrounding tariff policy, says Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
Total Return Forecasts: Major Asset Classes | 04 February 2025
The long-run expected return for the Global Market Index (GMI) remained above 7% for a third straight month in January, ticking higher vs. December’s estimate. The revised forecast, based on three models defined below, continues to reflect the highest return outlook in recent history for this multi-asset-class global benchmark.
Macro Briefing: 04 February 2025
President Trump pauses tariffs on Canada and Mexico for 30 days while China announces its own duties on certain US exports. Beijing also says it is adding two American firms to its so-called unreliable entities list, saying they “violated normal market trading principles” and is investigating Google. “These moves are warnings that China intends to harm US interests if need be but still give China the option to back down,” writes Julian Evans Pritchard, head of China economics at Capital Economics in a note.
Major Asset Classes | January 2025 | Performance Review
January was kind to the major asset classes, marking a strong rebound from a rough month in December. Across-the-board gains last month suggest the year is on a positive trajectory for markets. But the good news became irrelevant in a heartbeat after President Trump announced sweeping tariffs on Canada, Mexico and China – news that threatens to lift inflation, slow growth, upend the global trading system and roil markets.
Macro Briefing: 03 February 2025
Canada and Mexico vow to retaliate after Trump imposes sweeping tariffs on both countries. The White House also announced higher tariffs on China. The tariffs are expected to lift inflation and slow growth in the US and elsewhere. “There was some optimism in the [US Treasury] market that [tariff threats] were just for negotiation, but the market may have underestimated the determination of the Trump administration,” says Jason Lui, head of Asia-Pacific equity and derivative strategy at BNP Paribas.
Book Bits: 01 February 2025
● The New Rules of Investing: Essential Wealth Strategies for Turbulent Times
Mark Haefele and Richard C. Morais
Excerpt via Barron’s
The notion that the global financial order could one day suffer or collapse under the weight of its debt has understandably given rise to a survivalist impulse to do whatever it takes to escape the financial system we have, and perhaps create a new system in the process. That impulse, for good or bad, stands behind the rise of cryptocurrency, but I am highly doubtful that cryptocurrencies will save us.
Cryptocurrencies are perceived by officials to be both a threat to the existing financial system and a facilitator of money laundering, which explains why, when Bitcoin fell 50 percent in short order, government officials went out of their way to say, “We told you so.” The U.S. secretary of the treasury pointedly warned Americans against “extremely risky” cryptocurrencies lacking “appropriate supervision and regulation.”
US Bond Market Rebounds So Far In 2025
Several risk factors that could end the bond market’s party, but for the moment US fixed-income markets are having a good year so far, based on prices through Thursday’s close (Jan. 30).