Holding On - Market Update March 17-21, 2025
Stock Market Looking Any Good News To Hold On
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Welcome back to the Rambling Mind Newsletter. This is your Market Update. Sorry this post is coming to y’all late. I am on vacation and my mind was all over the place. But as they say better late than never, right?
Summary of Topics:
Economic News
➖No Change
Company News
🤏🏾Big Tech Becomes Small Tech
Stats of the Week
↪️24,000 Fed Workers Rehired
✂️$13.30/hr Fed Minimum Wage Cut
🛒$32 Billion Google Purchase
🔋5 Minute Car Charger
Looking Ahead
📉PCE Inflation
Sports I Love
🏀$7.3 Billion for Celtics
Extras
😱The Administration Did What?!
Markets
Stock Market finished the week holding on for dear life and looking for any signs of positive economic news. It found the reassurance it needed from Jerome Powell’s calming presence (more below). It started this week ripping in hopes that President Trump will chill out on tariffs, a hope that I believe is misplaced.
Returns
Tale of the Tape
Economy
Like me updating overzealous project managers, Jerome Powell spoke to reporters after the FOMC meeting and said, "No CHANGE." Rates will remain at 4.25-4.5%. But unlike me trying to keep things as dull as possible so I get no follow-up questions, Jerome and the Fed boys dropped some surprising numbers that shook everyone.
🔢By The Numbers: The Fed cut their GDP forecast for the year from 2.1% to 1.7%. They also increased their inflation expectation from 2.5% to 2.7%. Both numbers are moving in the wrong direction, we want GDP going up not down, and inflation going down not up.
💬In His Words: Jerome said, “We do not need to be in a hurry to adjust our policy stance, and we are well positioned to wait for greater clarity."
In My Words: "We have an administration that is confused and confusing. The only thing we can do is wait."
What Jerome was thinking: Trump don't eff this up for me. I orchestrated the greatest soft landing in the history of the US economy and you are coming in here with these BS tariffs that you keep turning off and on. Do you even know what you are doing? What exactly are you trying to accomplish? Cause it definitely is not to help the US economy in any way.
🪙My Take: Jerome and the Fed are stuck between a rock and a hard place. They cannot make any major moves because inflation is still a thing and the Trump administration is not exactly helping them keep things chill in the markets. Plus depending on how Trump feels Jerome could be getting fired like some FTC commissioners who disagreed with Trump (the case is now in court, it was technically illegal for Trump to do this but hey Congress is a bunch of wimps and continues to do nothing).
Companies
🤏🏾Big Tech Becoming Small Tech
🪙My Take: This is why we diversify. Not only across companies but also across nations. The best decision you could have made in the last two years was to invest both in the US and Internationally as well. While the US Stock Market has been languishing, other markets have been flying.
As Nobel laureate Harry Markowitz said, "Diversification is the only free lunch in investing"
You may not have the best returns but you will have average returns for a long time and that is all we need to be a successful investor.
Stats of the Week
↪️24,000
A bit of good news for some federal workers. 24,000 of the probationary workers who were fired by DOGE got their jobs back after a federal judge ordered the agencies to reinstate them. However, this does not mean that they are in the clear. The Trump Administration has told all agencies to go through the appropriate processes for a higher number of layoffs.
😓Takeaway: Most people working for the government are looking for other jobs. As one woman who worked for the Commerce Department that was reinstated said, she just does not trust that things will last. She and her husband (also a federal worker) are on the hunt for other positions and have cut their spending to the bone to prepare for the worst outcome.
🪙My Take: For all the talk about making the government more efficient, this process has been the least efficient thing ever. Days of work are lost because of all the chaos.
✂️$13.30
The Trump Administration just cut the minimum wage for government contractors from $17.75/hr to $13.30. Doing away with a Biden administration executive order that raised the minimum wage for all government contractors.
💬In Their Words: A White House spokesperson said in a statement, "President Trump is standing up for America's working families by working to lower costs, delivering fairer trade deals, and creating thousands of new manufacturing jobs across the country."
🪙My Take: Trump is keeping his promise to the American people. Unfortunately, these were not exactly the cost-cutting that most people expected or wanted.
Google made its largest acquisition ever. On Tuesday, Google announced its acquisition of Wiz, a cybersecurity start-up. Google tried to buy Wiz last year for $23 Billion but the deal never materialized. Google upped the offer to Wiz and they agreed to it.
🤔Why?: Google wants to compete in the cloud as a service business against Amazon and Microsoft which dominate the space. Google hopes by adding some value-added services like Cloud security for businesses they can attract more businesses to choose Google Cloud.
🔢By The Numbers: Wiz's revenue has continued growing at an insane clip after being founded in 2020. It is expecting to make $1 Billion in revenue this year.
🪙My Take: This is an expensive acquisition from Google. Paying 30x sales is insanely expensive. Similar cybersecurity companies trade at about 20x sales. However, Google has proven to be great at making acquisitions.
China's biggest electric vehicle manufacturer, BYD, announced they created a new charging platform that charges electric cars in the same time it takes to fill up a gas tank.
🔢By The Numbers: BYD said 5 minutes on their new charges can provide up to 250 miles of range. Solving one of the biggest issues everyone has with electric vehicles, Range anxiety. BYD said the new chargers will begin shipping next month in China
🪙My Take: Chinese manufacturers are wiping the floor with every other EV manufacturer. Their cars are better than most Western EVs. That gap seems to just be growing.
Looking Ahead
Economy
On Friday, we get the Personal Consumption Expenditure Index. This is the Fed's preferred inflation gauge which includes all spending in the US economy. This report will go a long way in giving the Feds confidence about the economy with all the chaos brought on by the new administration.
👀 What to Watch
The first Quarter comes to a close. Crazy cause it feels like so much has already happened this year. Guess that's what chaos does to you.
Sports I Love
On Thursday, the Celtics announced it had been acquired by private equity investor Bill Chisholm for $6.1 Billion. In a deal that valued the team at $7.3 Billion. It is the most a sports team has ever been sold for.
🔢By The Numbers: The current owners, Boston Basketball Partners led by the Grousbeck family, bought the Celtics in 2002 for $360 Million. That is a 1,650% (13% per year) return on investment. Of course, there are business costs (and profits) that are not being factored into the investment calculation but still a great investment for the owners of the team.
Extras
Trump Administration Did What ....?
Part of the extras will be me just venting about some do the crazy things that have come out of the Temp Administration that have very little likelihood of becoming reality but I just gotta let it out.
It is also a way to continue exposing the authoritarian nature of the Trump Administration.
Trump Says US Should own Ukraine's Nuclear Plants
The things this dude says is just crazy. I never know when he is just talking and when he is actually serious. Which is the worst thing about a leader like Trump, he has diarrhea of the mouth. If it pops in his head, it's coming out and he doesn't really care about the repercussions of what he says.
I hope we all have that level of confidence and privilege one day.
Trump Signs Executive Order to Dismantle Department of Education
This has been on the wishlist of the most extreme end of conservatives for years. The simple belief is that parents should have a greater say into how their kids get educated and it should not be in the hands of the federal government. The irony is you can simple home school your kids or choose a private option for your kids if you feel that strongly. However these folks don't want that. There is a belief that public education is not great and the only way to make it better is to remove the government from it.
The irony is the DoE provides funds to ensure the whole population gets access to an education not to ensure any particular family has the best education. However because we no longer view ourselves as citizens but as consumers, we can't distinguish between what is good for civilization at large and for ourselves personally.
What Does DoE Do?: The Department of Education had a $268 billion annual budget in the 2024 fiscal year and more than 4,000 staff, now less than 2,000 post DOGE. It funds and oversees a plethora of programs aimed at ensuring students get a quality education.
This includes providing supplemental funding to high-poverty K-12 school districts that provide vital child care services for many low-income and rural communities across the country.
The department collects national data on schools and enforces federal civil rights laws to prohibit discrimination.
It's also the loan holder for most federal student loans.
Trump Administrations Plan for Denaturalization of Immigrants
Axios are never one to overhype situations. So, when they post a story like this. It is something we should all take very seriously. If you have ever doubted who or what this administration is about. This should be eye opening for you.
Big Picture: The Trump administration has already gone after birthright citizenship with the unconstitutional executive order he signed on day one in office. Now he is looking for ways to get rid of naturalized citizens. If you get rid of those to people, who else can vote?
Please ignore the BS of nationalization. This administration has been clear, it is looking for ways to hoard power. With a Republican led Congress becoming nothing more than doormats, cowering away to Trump in an effort to get his favor as if he is a messiah or something. Combined with a confused toothless Democratic party, there is not much standing in the way of the Trump's administration pursuit of power.
The last bastion against this onslaught are the courts. Unfortunately, the courts have little power of enforcement. However, they can force the American people to come to terms with the fact that this administration cares nothing about them.
Bottom Line: WAKE UP! Don't make excuses for the abuse of power. Regardless of the specifics and how much you may agree with some of the policy ideas, we have due process in this nation. We have a BILL OF RIGHTS for a reason. When we begin ignoring that so we can get our way that is the end of the nation we love.
I hate sounding this extreme, but reality is that extreme.