I Love You - Market Update Feb. 10-14, 2025
To my Wife, The Love of My Life
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Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Summary of Topics:
Economic News
🔁Inflation Back?
Stats of the Week
🔚4000 Employees Laid Off By Meta
🪙$85 Million lost to pennies
🎤123.4 Million vs 133.5 Million
💘$2.9 Billion Spent on Friday
Looking Ahead
🏠Housing Data
Walmart Earnings
Sports I Love
⚽Man U Still Sucks
🏀NBA Dunk Contest is a JOKE
🤩All-Star Game
Extras
🤑Bribes Welcome
Markets
Don't freak out! Today is a federal holiday which is why the Stock Market is closed. You have not missed anything, well, maybe you were supposed to attend the morning call, but it's all good. Meanwhile, the stock market has continued to be on a rocket ship. It finished last week near all-time highs. The stock market seems completely unphased by threats of tariffs or any new executive orders signed by the new administration. It will be interesting to see how long the market ignores all the rules being implemented.
Returns
Tale of the Tape
Economy
And here I thought, I was finally done talking about inflation. 😔
🔢By The Numbers: On Wednesday, the Bureau of Labor Statistics reported the Consumer Price Index (CPI) for January, and it was about as pretty as a boxer after a fight.
Prices increased by 3% year over year overall. Housing, Energy, and Food drove the increase in prices.
It was 2.9% in December and has been on the rise for the last few months.
Food prices increased 0.5% from December
Mostly driven by Bird Flu price increases. Crazy the number of things that have either eggs or chicken in it.
It is cheaper to feed people beef than eggs if you use a cost-per-gram measurement. It costs 6.879 cents for eggs and 6.374 cents for beef.
Energy prices increased 1.1% from December mostly driven by higher gas prices
Shelter aka housing increased by 0.4% and accounted for 30% of the increase.
Core inflation, which removes food and energy prices due to their inherent volatility, increased 3.3%. A big increase from 2.9% in December.
💬In Their Words: Jerome Powell was testifying before Congress when the report was released and he said, "With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance. We know that reducing policy restraint too fast or too much could hinder progress on inflation. At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment."
Kelechi's Interpretation: After that inflation print, ain't no way we cutting interest rates anytime soon. Also, the economy is doing pretty well. Therefore, higher rates may not be a bad thing, but we are watching everything.
My Take: My savings account rates are protected for another month. Rates are not going down anytime soon. With fears of tariffs playing on companies and consumers, it is even more important for rates to stay high to help counteract all the effects of any tariff.
Stats of the Week
🔚4000
Meta announced on Tuesday that it's laying off 4000 employees. This follows many other tech companies (Workday and Salesforce to name a few) who have announced layoffs recently to get the company focused on and using AI systems more often.
Google is offering buyouts to employees across its various businesses as it makes a similar pivot. Google will be making similar job cuts shortly.
My Take: These businesses used to be the places you worked for "safe jobs". Unfortunately, the reality is as long as you and I work in corporate America, there is no such thing as a "safe" job. We are AT-WILL employees. Meaning if companies feel like it, they can fire us at any time for any reason. My advice comes from Morgan Housel, "Short Term Pessimistic, Long Term Optimistic."
Have an emergency fund
Don't carry a ton of debt backage
Don't elevate your lifestyle too quickly
Upskill yourself
Be a generalist over a specialist (keeps you flexible)
Take messages from recruiters while you still have a job
Realize it ain't always your fault or your ability so therefore forgive yourself and don't be too prideful of your accomplishments.
The US Mint lost $85 million making pennies last year. To make a 1¢, it costs 3.7¢. Trump on Sunday announced he was ordering the Treasury to stop mounting the penny.
My Take: This makes sense. As much as having a jar full of pennies that never get used. I agree with Trump on this one. The time for the penny is over. No one uses these things, all they do is take up space and most people just lose them anyway. Plus they cost more to make than it's worth.
Trump isn't the first president to want the penny gone. Obama tried but ended up focusing on other things. Maybe it happens this time.
Some potential issues: Price increases with businesses using the opportunity to round prices higher. It would add to the drive for using digital payments over cash.
123.4 Million vs 133.5 Million
The Superbowl increased viewership by 3% (even though the game sucked) to 123.4 Million viewers. It is the most watched Superbowl.
Even better though, Kendrick Lamar's halftime show brought in 133.5 Million viewers. It is the most-watched halftime show in the history of the Super Bowl.
💘20%
Due to higher cocoa prices, Valentine's Day chocolate costs consumers 20% more. This is according to the Wells Fargo Agri-Food Institute. Since January of 2024, cocoa prices have increased by 143%.
Hopefully, you were able to say "I love you" without going broke.
Probably will cause it is estimated that $2.9 Billion was spent on flowers alone.
It is estimated that $27.5 Billion will be spent on Valentine's Day activities with the average person spending $188.81/person.
Looking Ahead
Economy
Lots of housing data will be released this week. Providing us an insight into how good or bad things are getting this year for anyone looking to buy a house.
On Tuesday, the Homebuilder Confidence Index will be released.
The index is based on a survey taken by Wells Fargo. It reflects the sentiment those in the housing industry feel about current conditions surrounding the housing market. Everything from material costs to labor costs.
On Wednesday, Housing starts, and Building permits for January will be released.
On Friday, existing home sales will be released.
Earnings
Walmart, the largest retailer in the US, reports earnings on Thursday. Walmart will be looking to take back the lead as the largest revenue company in the world after Amazon surpassed them in their earnings last week.
Sports I Love
Worse Than Expected
Yes, I know know Man U sucks. However, there are some teams you just expect them to do better against. However, that is just a setup for absolute disappointment. The Spurs are bad this season, like lost 4 of their last 5 matches in the premier league, BAD. Spurs have been so bad that they were one spot from being in relegation discussions.
Man U is even worse because after this game Man U is now two spots away from relegation. This team is more lost than the TV show. There is no sense of direction. Every week, you are just hoping for magic to happen and for them to get lucky because there seems to be no strategy with this squad of players.
At this point, I do not even check who or when they play anymore. I just wait for the notification that they lost, AGAIN. Soon, I will stop doing even that because MY PEACE MUST BE PROTECTED!
Who am I kidding?! We all know after one win, I will be back on the team bus.
What is WRONG WITH ME?! 🥲
NBA Dunk Contest Is A Joke
For the First time in NBA Dunk Contest History, Matt McClung won the Dunk Content and became the first player ever to 3-peat as a winner. Not that there was ever any competition. I mean who the heck are these players that are being trotted out to be in the Dunk Contest?
Also, the problem with the Dunk Contest is not the players but the scoring. The scoring is horrendous. Unlike when we watch the Olympics or any other score-based competition, the NBA Dunk Contest has inflated scoring. One guy didn't make a single dunk and they gave him a 40/50. LIKE WHAT?! Of course, the contest is now a joke. The scoring makes no sense. Until they score these dunks appropriately, the contest will continually be an absolute flop.
All-Star Game
The new rules for the game were set up to bring the competitive fever back to the night.
Extras
President Trump just said the quiet part out loud. On Tuesday, he signed an executive order pausing the enforcement of a 1977 act called Foreign Corrupt Practices Act. It made it illegal for US companies to bribe foreign governments to win or keep businesses.
Trump said the Act put American businesses at a disadvantage. He ordered the Justice Department to create a better set of rules that doesn't limit American businesses.
It is not unknown that bribery is a regular practice for a lot of businesses. Trump is just saying it out loud to make it easier for businesses.
My Take: I wonder what he has done that he is trying to undo. I wonder what dollars have exchanged hands that he is trying to find a way to protect himself and those around him.
But more importantly, this is a bad sign of things. The idea of the law was to help establishthe rule of law across the globe rather than be part of the problem. Yes, a lot of businesses circumvented the rule. However, they had to go to lengths to hide it. Now we are heading in a direction that is not good for the global economy. American businesses have a ton of money and can easily distort entire nations for their benefit in other words, CHAOS. Something our president seems to love.