[DrVenture]

Stocks in my portfolio that are having a great 2025 YTD: AMGN, PM, KLG, YUM, IBM, JNJ, NOK, MO, RTX, MCD - all between +10 and +26% YTD. Very value oriented.

My worst performers are TSM and AMZN and MSFT and CEG, though other than MSFT, they all had stellar 2024 performance.

I do note that Halliburton had a bad 2024 and is having a bad 2025. Not a great sign for the "drill Baby, Drill" narrative.

[DrVenture]

The situation is evolving so rapidly, it is impossible to keep track. Canada threatening to cut off electricity supplies. The U.S. threatening to double tariffs on Canada and Mexico. It is almost as if this whole thing wasn't all that well-conceived. But, it is spiraling in the manner that many predicted.

A fairly comprehensive write-up on tariffs and their efficacy:

https://www.cnbc.com/2025/03/10/do-t...ts-say-no.html

[ASAP]

Originally Posted by DrVenture

The situation is evolving so rapidly, it is impossible to keep track. Canada threatening to cut off electricity supplies. The U.S. threatening to double tariffs on Canada and Mexico. It is almost as if this whole thing wasn't all that well-conceived. But, it is spiraling in the manner that many predicted.

A fairly comprehensive write-up on tariffs and their efficacy:

https://www.cnbc.com/2025/03/10/do-tariffs-protect-us-jobs-and-industry-economists-say-no.html

the only place where i could remotely see tarrifs working (outside of 200 years ago)... is if it was very industry specific and said industry had a fully developed backup at home that was potentially govt backed and it was an industry we truly wanted to build at home... this would alleviate some of the pricing worries and would give folks an immediate alternative...

in every other instance such as here... its pretty much a straight disaster

[DrVenture]

"The U.S. stock markets have accelerated their sell-off cementing the Nasdaq, S&P500 and Dow Jones index prices below the 200 day simple moving average (200MA). The move below the 200MA suggests that the long term uptrend is now broken although, does not yet confirm a bear market or new long term downtrend...

The S&P 500 is currently breaking support at 5670. A close below this level suggests the next level of support to be a long way down at around 5385."

[DrVenture]

Originally Posted by 2000cs

... One example: Pg 10 ignores the impact on housing demand of removing illegal immigrants. A housing price decline seems more likely, especially in cities. Mortgage rates already have ticked down a bit. If the FED cuts rates as Barron’s anticipates, mortgage rates will fall further, affordability thus improves.

Sounds like an opportunity to invest in the homebuilder segment, if you think that scenario will outweigh the negatives. Homebuilders were weak in 2024, and even weaker YTD. I have no idea how many illegal aliens are homebuyers. I have heard they tend to not utilize traditional mortgage loans.

I don't know that Barron's is 'anticipating' FED rate cuts. That info iusually comes from CME Fedwatch. And is based on weakening economic indicators. Regardless of what mortgage rates do (and lower mortgage rates often coincide with higher housing prices), the impact of higher lumber, drywall and concrete prices, along with difficulty procuring labor is likely to result in upward pressure on new home construction prices. Which is what Barron's was referring to in that paragraph. Loss of GSE status may counteract lower FED funds rates, however.

[LogicalApex]

Originally Posted by ASAP

the only place where i could remotely see tarrifs working (outside of 200 years ago)... is if it was very industry specific and said industry had a fully developed backup at home that was potentially govt backed and it was an industry we truly wanted to build at home... this would alleviate some of the pricing worries and would give folks an immediate alternative...

in every other instance such as here... its pretty much a straight disaster

Pretty much.

The only times tariffs really make sense, IMHO, for an economy as globally connected as ours is if they are done early and with extremely solid reasoning behind them. Meaning, they aren't intended to block trade and instead are setup to ensure fair trade.

To expand on that point a bit. One area China has used heavily in the past to accelerate manufacturing job loses in America was through artificially devaluing their currency. This was a major reason China would purchase and hold disproportionate amounts of US debt. That's not the only way China competes, but we're not going to have a PhD dissertation on US / China trade here... Back to the point. We could have levied tariffs on those goods in a focused manner to counter the currency manipulation and ensure the US manufacturers could compete on level ground.

Doing blanket tariffs this late is counterintuitive. You're going to struggle to build back the manufacturing base and its auxiliary suppliers. But even worse... by attacking our allies you're losing access to their markets too...

Best we can do is to seize on the world's growing concern around China with trade agreements that make our market more favorable to trade with while building an off ramp from China's manufacturing prowess...

Republicans and Trump can't do that though as the major trade pacts to do that, like the TPP, were signed by Obama. So instead we're setting ourselves on fire.

[DrVenture]

Some facts about the New Canadian PM. This guy does not appear to be a pushover.

'Canada elected central banker extraordinaire Mark Carney as the leader of the Liberal Party on Sunday, making him Justin Trudeau’s successor as Prime Minister.

When he’s sworn in this week, Carney will inherit a country in the midst of an economic hailstorm brought on by US tariffs. But he knows a thing or two about tough economic climates, and he’s regarded by economists as a rock star central banker.

Who is this guy? Carney is like a living Patagonia vest—he studied at Harvard and Oxford before a 13-year stint at Goldman Sachs. Despite having no political experience, he made his way into the spotlight after years of successfully piloting countries through the economic equivalents of Scylla and Charybdis as the head of two central banks.

Carney ran the Bank of Canada from 2008–2013, helping stabilize the country through the aftermath of the Great Financial Crisis.The Bank of England recruited him in 2013 to steer the country through Brexit. He was the first non-Brit to hold the position since the bank’s founding in 1694.
He already came out swingin’. In his acceptance speech, Carney said that President Trump is “attacking Canadian workers, families, and businesses.” He also indicated that he plans to keep reciprocal tariffs on US goods until the US starts to show some “respect.”'

[DrVenture]

Originally Posted by LogicalApex

...

Best we can do is to seize on the world's growing concern around China with trade agreements that make our market more favorable to trade with while building an off ramp from China's manufacturing prowess...

...

Which is essentially the exact opposite of what is now being done. And will likely produce the exact opposite result. Hampering our trade (exports and imports) with all parties involved. And leading to the inevitable strengthening of China's trade alliances with nearly everyone.

We are self-imposing economic sanctions on ourselves. The sort of thing that we have historically done to North Korea or Iran. Causing them to turn inward to try and create from scratch, in a manner of speaking.

All I know is that I have a boatload of dry powder and just need to seek out the point of maximum pain to re-enter certain positions. Another 5% down? Another 10? Who said, "never let a good crisis go to waste"?

[T.R.S.]

Originally Posted by DrVenture

Which is essentially the exact opposite of what is now being done. And will likely produce the exact opposite result. Hampering our trade (exports and imports) with all parties involved. And leading to the inevitable strengthening of China's trade alliances with nearly everyone.

We are self-imposing economic sanctions on ourselves. The sort of thing that we have historically done to North Korea or Iran. Causing them to turn inward to try and create from scratch, in a manner of speaking.

All I know is that I have a boatload of dry powder and just need to seek out the point of maximum pain to re-enter certain positions. Another 5% down? Another 10? Who said, "never let a good crisis go to waste"?

Good luck trying to out-guess someone who is totally short sighted and reactionary, and who's only real goal is how do I enrichen myself here and now?

"Don't worry, it'll only hurt a li'l bit for a li'l while, then I'll make it all better!"

[Mani59]

Hello all,

A reminder to all that please do not post political posts. Such posts will / have been deleted and may lead to infractions / bans against members and / or this thread being deleted.

You can read more about this here.

Thanks, Mani

[DrVenture]

Yes, let's not get this thread deleted. It can be tricky to discuss economic policy as it pertains to investing. And folks may perceive discussing actions as criticism of the actual decision makers. Let's all try to avoid that which is directly personal or confrontational. I am hoping we can look back in a year and see how what we all anticipated, actually played out.

If anything, this year has really illustrated how economic policy decisions have a direct impact on the investing environment in which we participate. I believe we can discuss those actions/decisions without making overt personal judgments.

Thank you Mani59 , for the patient reminder.

[DrVenture]

https://news.bloomberglaw.com/enviro...deadline-looms

The expectation is for 250,000 federal employee layoffs.

[ASAP]

are folks still doubting a recession?

[XutvJet]

Originally Posted by DrVenture

https://news.bloomberglaw.com/enviro...deadline-looms

The expectation is for 250,000 federal employee layoffs.

A government is naturally inefficient. Perhaps some jobs may be a bit cush, but most folks working in government are not paid extremely well. Now you're going to reduce the work force by a quarter million. Good luck motivating those that remain and trying to will them to work harder for the same pay. They're already disgruntled and worried about their jobs. Now you're going to ask them to work harder. Good luck with that. If you you thought government was inefficient, just wait. It will trickle down to the state and local governments as well.

Government cannot be run like a business.

[XutvJet]

Originally Posted by ASAP

are folks still doubting a recession?

I'm not, but this coming recession is a bit "manufactured" I would say.

[DrVenture]

Which is why it is being utilized by so many to trade volatility, no one expects it to last. Unless job loss, trade and consumer sentiment get so beaten down that it becomes a real recession. The longer this persists, the more likely we lose more of our export customers. They could be hard to get back. Overseas consumers may feel insulted and U.S. brand reputations may become tarnished.

https://www.cnbc.com/2025/03/13/trum...ocks-sink.html

If growth drops enough, and jobs are lost, the FED drops rates, forced to ignore the inflationary impact of tariffs (stagflation). Then fixed income really pops! My strategy at the moment is to reduce growth exposure, and utilize select fixed income, value stocks and cash equivalents for defensive purposes. I am considering buying a broad commodities index (up~6% YTD) as well, for an inflation play.

I selectively sold more yesterday. That was to lower my tax burden on some tax-deferred funds. Adds to the dry powder though.

[RickFLM4]

Originally Posted by ASAP

are folks still doubting a recession?

Yes

[2000cs]

Recession:
GDP is roughly $30T annually. Government spending (fed and state) is approx $5.1T. If DOGE is successful and cuts $1T from Government spending, the $24.9T of private economy will have to make that up to avoid a recession, and then some to have growth. That equates to about 4%, so it is possible but difficult. A recession used to be defined as two consecutive quarters of negative GDP growth, so using that, we can see that it is possible the timing of cuts in government spending and non-government growth might misalign, so a recession is possible. I’d call it a “technical recession”.

The last few years GDP growth was heavily impacted by increases in government spending, which is why the numbers were good but people didn’t feel it (they just felt the inflation). A technical recession as I described above also likely won’t be felt in the private sector. As with any macro analysis, those who lose their jobs (in this case mainly government employees) obviously do feel it severely.

IMO a recession is possible, but perhaps less than 50% probability, and will be concentrated in the government sector if it does happen. And it will be brief.

[WWM3]

Originally Posted by 2000cs

Recession:
GDP is roughly $30T annually. Government spending (fed and state) is approx $5.1T. If DOGE is successful and cuts $1T from Government spending, the $24.9T of private economy will have to make that up to avoid a recession, and then some to have growth. That equates to about 4%, so it is possible but difficult. A recession used to be defined as two consecutive quarters of negative GDP growth, so using that, we can see that it is possible the timing of cuts in government spending and non-government growth might misalign, so a recession is possible. I’d call it a “technical recession”.

The last few years GDP growth was heavily impacted by increases in government spending, which is why the numbers were good but people didn’t feel it (they just felt the inflation). A technical recession as I described above also likely won’t be felt in the private sector. As with any macro analysis, those who lose their jobs (in this case mainly government employees) obviously do feel it severely.

IMO a recession is possible, but perhaps less than 50% probability, and will be concentrated in the government sector if it does happen. And it will be brief.

Interesting analysis, but I disagree. It’s hard for me to comprehend a scenario where pain is just limited to the public sector.

When Delta Airlines says travel took a nose dive and partially blames government firings, there are reverberations that extend to many parts of the economy. It won’t just be government employees looking for jobs if we get any kind of recession IMO.

With regard to the market, earnings expectations need to come down. If SPY earnings are handicapped by 10% the market will need to come down a lot more to trade at a 18x valuation like in some recent pullbacks. Not predicting this, but I’m not especially eager to buy these dips with the current vision for economic policy since I expect earnings to come in lighter than the consensus.

[2000cs]

Originally Posted by WWM3

Interesting analysis, but I disagree. It’s hard for me to comprehend a scenario where pain is just limited to the public sector.

When Delta Airlines says travel took a nose dive and partially blames government firings, there are reverberations that extend to many parts of the economy. It won’t just be government employees looking for jobs if we get any kind of recession IMO.

With regard to the market, earnings expectations need to come down. If SPY earnings are handicapped by 10% the market will need to come down a lot more to trade at a 18x valuation like in some recent pullbacks. Not predicting this, but I’m not especially eager to buy these dips with the current vision for economic policy since I expect earnings to come in much lighter than the consensus.

I said “concentrated” in, not limited to, government sector. Of course there are “multiplier” effects but that is true for growth in non-government sectors as well. And to the extent the cuts are waste and fraud, the multipliers will be small.

The real issue is whether the non-government economy is growing and will continue to grow. I think so. I also think the FED will cut rates and there might be a “DOGE dividend” and other tax cuts that help further stimulate the non-gov’t sectors (especially consumer), but that all remains to be seen. (I think this is the real reason the FED wants to go slow on rate cuts, so the economy isn’t over-stimulated) On the other hand, if the tax package from the first Trump administration is allowed to expire at the end of 2025, as is currently law, we will need massive FED rate cuts to offset the fiscal anti-stimulus or 2026 will be really bad. Taken together, the FED will be doing a dance with the administration to maintain balance and a growth bias through all of this.

[DrVenture]

One should also consider a decrease in consumer spending (~70% of GDP), if prices continue to rise, jobs are lost, and confidence falters. One might also consider corporations tightening belts. As long as we a making predictions, that should be factored in. And corporations may be facing export headwinds. This isn't only about DOGE.

On the subject of DOGE, whatever cuts they accomplish would only matter if spending actually decreases across the board. Even firing 250,000 workers who make $100,000 annually is only $25 billion. Then there are increases elsewhere, like defense, that offset any savings. For perspective, they gave farmers more than $25 billion back in 2018/2019 for losses due to tariff implementation. I am expecting the same again. Probably more. Unless my calculator is broken, the numbers do not add up.

https://www.newsweek.com/elon-musks-...record-2043799

https://www.npr.org/2025/03/06/nx-s1...ficit-congress

https://bipartisanpolicy.org/report/deficit-tracker/

[DrVenture]

Originally Posted by WWM3

Interesting analysis, but I disagree. It’s hard for me to comprehend a scenario where pain is just limited to the public sector.

When Delta Airlines says travel took a nose dive and partially blames government firings, there are reverberations that extend to many parts of the economy. It won’t just be government employees looking for jobs if we get any kind of recession IMO.

With regard to the market, earnings expectations need to come down. If SPY earnings are handicapped by 10% the market will need to come down a lot more to trade at a 18x valuation like in some recent pullbacks. Not predicting this, but I’m not especially eager to buy these dips with the current vision for economic policy since I expect earnings to come in lighter than the consensus.

Not "predicting" in an uncertain and chaotic environment is a good plan. Usually, I'd be ready to buy after a 10% drop in S&P and a Nasdaq down 14%, but that seems optimistic to me at this time.

I agree that cuts in government spending are only one piece of the equation. I think that tariff inflation, job losses and export headwinds are likely to weight more heavily in concert. Whether GDP falls enough to be considered recessionary is one aspect. What the stock market does, and jobs, are other aspects. One can portend the other. I've been posting here for months that it is first (and more likely second) quarter earnings that will set Mr Market's teeth on edge. Particularly, if these policies continue into Summer.