HI Market View Commentary 02-24-2025
From Barrons:
U.S. Wants Most Advanced AI Chips Made in America
The Trump administration believes that excessive regulation of
artificial intelligence or an overemphasis on AI safety just as it is
poised to take off could hamper its potential to profoundly change
the world. The U.S. wants to relax U.S. regulations to encourage
manufacturing and innovation.
Vice President JD Vance told the AI Action Summit in Paris
that the administration believes AI will have “countless
revolutionary applications” in economic innovation, job
creation, national security, healthcare, free expression, and
beyond. He criticized European governments for over-
regulating American tech companies.
To safeguard America’s advantage, the administration wants
to make sure that the most powerful AI systems are built in the
U.S. with American designed and manufactured chips, Vance
said. About 90% of the world’s most advanced chips come
from Taiwan Semiconductor Manufacturing Co.
Intel, the largest U.S. chip maker, received $8 billion from
President Joe Biden’s administration to expand production,
and is trying to become a chip-making foundry for other
semiconductor companies.
Although the Biden administration last month expanded
restrictions on AI chip exports, licensing approvals, or caps to
over 120 countries beyond China, Vance suggested that the
Trump administration could allow AI companies and AI chip
makers like Nvidia to sell their products abroad.
What’s Next: Patrick Moorhead, CEO and chief analyst at Moor
Insights & Strategy, expects Trump to pressure U.S.-based chip
developers Nvidia, AMD, Broadcom, Marvell, Apple,
and Qualcomm, which all use TSMC for their manufacturing
capabilities, to do more with Intel. Vance’s comments suggest chip
makers could see fewer regulations.
—Tae Kim and Janet H. Cho
Earnings dates:
DG 03/13 est BMO
MU 03/19 est AMC
NVDA 02/26 AMC
O 02/24 AMC
TGT 03/12 est BMO
https://www.briefing.com/the-big-picture
The Big Picture
Last Updated: 21-Feb-25 15:48 ET | Archive
Market primed to go everywhere and nowhere
A roller coaster ride is an apt reference for a feeling that you have
gone everywhere and nowhere all at once.
There is trepidation and/or excitement on the climb followed by
fear and/or exhilaration as the car you are riding in starts to
accelerate on its stomach-dropping descent over the first hill.
Then, there is jubilation and/or pandemonium as the car careens
around the track, perhaps throwing you for a loop or two along
the way, before screeching to a stop.
In your mind, you have gone everywhere, but in reality, you have
gone nowhere. When the roller-coaster ride ends, you are right
back to where you started.
A roller-coaster ride may be an apt reference for the feeling of
going everywhere and nowhere all at once, yet it might also end
up being a metaphor for the stock market, which has had its
moments of fear, exhilaration, jubilation, and pandemonium
already this year.
And there is more of that to come.
Tough to Stay on Track
With all the twists and turns in early 2025, the market-cap
weighted S&P 500 is up 2.3% year-to-date as of this writing while
the equal-weighted S&P 500 is up 2.7%. The gains, however,
haven't felt convincing. There has been a lot of tossing and
turning from one day to the next.
Some days value outperforms growth. Other days growth
outperforms value. Some days cyclical sectors outperform
countercyclical sectors. Other days countercyclical sectors
outperform cyclical sectors. Some days small-cap stocks
outperform large-cap stocks. Other days large-cap stocks
outperform small-cap stocks.
You get the drift. The main point of the back-and-forth action for
investors is that the net change has been positive. Let's hope it
stays that way, yet it seems unlikely to be as easy to stay on a
positive track as it was in 2024 for a variety of reasons.
The expectation of multiple rate cuts that prevailed in 2024
has been replaced by a brooding belief that sticky inflation
and policy uncertainty will leave the Fed reluctant to cut
rates in 2025.
The multiple expansion throughout 2024 has created
valuation angst in 2025, as the market cap-weighted S&P
500 trades at a robust premium to its 10-year average while
the ratio of the Wilshire 5000 market cap to nominal GDP is
north of 200% (a zone equated as "playing with fire,"
according to Warren Buffett, whose Berkshire Hathaway
continues to sit on a mountain of cash).
There is talk of tax cuts and deregulation, both of which are
exciting possibilities for the stock market, yet that
excitement gets tempered by the uncertainty surrounding
tariffs and deportation initiatives.
DOGE has been lauded as a needed effort to cut government
spending, but big cuts in government spending are expected
to weigh on economic growth.
There is huge promise in AI applications, yet there are
festering questions as to whether the big AI spenders will
see a meaningful return on that investment.
Fourth quarter earnings results have been much better than
expected, as discussed last week, yet the first quarter
earnings growth estimate has been slashed to 7.6% from
11.6% on December 31, according to FactSet, while the
calendar year 2025 growth estimate has been trimmed to
12.1% from 13.3% on December 31. It is a trend in the
wrong direction for a market sporting a premium earnings
multiple.
Various reports suggest there could be some dissension in
the GOP ranks as the bid to cut taxes runs headlong into a
need to cut the deficit, meaning the market's tax cut
enthusiasm could get stifled if deficit hawks stand in the way
of the president's more aggressive tax cut plans.
From a short-term perspective, there are conflicting
"contrarian indicators," with the AAII's bearish sentiment
reading on the high side (40.5% vs 31.0% historical
average) and a BofA Securities global fund manager survey
indicating cash positions are at their lowest level (3.5%)
since 2010.
What It All Means
There are a lot of "big" issues that lack closure. That will keep
market participants guessing more than usual with respect to the
outlook for the economy, interest rates, and the market itself.
The sticking point for many is that the premium valuation at
which the market trades has effectively priced in the continuation
of good news happening on all fronts. The allowance for bad news
is in one's mind more so than it is in stock prices.
Things aren't lining up perfectly right now, which is why we have
seen the tossing and turning to start the year. Those are features
of a roller-coaster ride, so keep your seatbelts fastened.
This market needs closure in the data to have a better sense of
what is coming around the next turn. Absent that it seems primed
to go everywhere and nowhere.
–Patrick J. O'Hare, Briefing.com
Where will our markets end this week?
Lower
DJIA – Bearish
SPX – Bearish
COMP – Bearish
Where Will the SPX end February 2025?
02-24-2025 -1.5%
02-18-2025 -1.5%
02-10-2025 -1.0%
02-03-2025 -1.0%
Earnings:
Mon: DPZ, TCOM, ZM
Tues: HD, DNUT, AMC, FSLR
Wed: LOW, EBAY, VAC, NVDA
Thur: FUN, WBD, DELL
Fri: FUBO
Econ Reports:
billionaire owner Elon Musk in charge of a major government
cost- and staff-cutting effort.
Trump had sued X, then known as Twitter, and its then-CEO
Jack Dorsey in San Francisco federal court for deplatforming his
account following the Jan. 6, 2021, riot at the U.S. Capitol by his
supporters. Twitter had cited the risk of Trump inciting further
violence related to his effort to remain in the White House
following his loss to former President Joe Biden in the 2020
election.
Trump claimed Twitter had violated his First Amendment right
to free speech
The Wall Street Journal first reported the settlement on
Wednesday.
John Kelly, one of Trump’s attorneys in the lawsuit, confirmed to
CNBC that the president and X reached a settlement.
“It’s resolved,” Kelly told CNBC.
NBC News later Wednesday confirmed settlement involved a
payment of about $10 million by X, citing a source familiar with
the situation.
CNBC has requested comment from a lawyer for X.
At the time of the settlement, Trump had been waiting for more
than a year for the outcome of an appeal of the dismissal of his
lawsuit by a federal district court judge in 2022. On Monday, the
9th Circuit U.S. Court of Appeals granted a motion by all parties
in the case to dismiss that appeal.
Meta, the owner of Facebook and Instagram, on Jan. 29 said it
would pay $25 million to settle Trump’s lawsuit over that
company’s decision to suspend Trump’s social media accounts
after the Capitol riot.
The settlement with X comes as Tesla CEO Musk oversees the
Trump administration’s wide-ranging effort to cut federal
government spending and staffing levels as the head of DOGE, or
Department of Government Efficiency.
Musk, who spent more than $250 million to help Trump win
election to a second term in the White House, purchased Twitter
in October 2022 for $44 billion.
Musk reinstated Trump’s X account in November 2022.
https://www.cnbc.com/2025/02/13/three-things-that-cause-a-
stock-market-correction-and-a-likely-culprit-
now.html?__source=iosappshare%7Ccom.apple.UIKit.activity.
Mail
The 3 reasons that cause a stock market
correction and the likely culprit this time
Published Thu, Feb 13 20253:57 PM EST
Lisa Kailai Han@lisakailaihan
Rising interest rates pose the biggest threat to the current bull
market, according to Piper Sandler.
In a Thursday note, the investment firm looked at the main
catalysts that have resulted in 27 S&P 500 corrections of 10% or
more over the past 60 years. Chief investment strategist Michael
Kantrowitz identified three major risks: rising interest rates,
worsening unemployment and unforeseen global shocks.
The chart below depicts every market correction of 10% or more
for the S&P 500 since 1964. The three columns titled “higher
rates,” “job losses” and “global shocks” denote the contributing
risk factors for each pullback.
Causes of the last 27 market corrections of 10% or more
Start End Drawdown
%
Change
P/E
Duration
(Weeks)
Higher
Rates
Job
Losses
Global
Shocks Result
2/9/1966 10/7/1966 -22.2% NA 34 X
11/29/1968 5/26/1970 -36.1% NA 78 X X Recession
4/28/1971 11/23/1971 -13.9% NA 30 X
1/11/1973 10/3/1974 -48.2% NA 90 X X Recession
7/15/1975 9/16/1975 -14.1% NA 9 X
12/31/1976 3/6/1978 -19.1% NA 61 X
9/12/1978 11/14/1978 -13.6% NA 9 X
10/5/1979 11/7/1979 -10.2% NA 5 X
2/13/1980 3/27/1980 -17.1% NA 6 X X Recession
11/28/1980 8/12/1982 -27.1% NA 89 X X Recession
10/10/1983 7/24/1984 -14.4% NA 41 X
8/25/1987 12/4/1987 -33.5% -38.1% 14 X 1987 Crash
1/2/1990 1/30/1990 -10.2% -10.2% 4 X
7/16/1990 10/11/1990 -19.9% 20.0% 12 X X Recession/Persian
Gulf
10/7/1997 10/27/1997 -10.8% -10.8% 3 X Asia Financial
Crisis
7/17/1998 8/31/1998 -19.3% -20.0% 6 X Russia/LTCM
Crisis
7/16/1999 10/15/1999 -12.1% -15.0% 13 X
3/24/2000 10/9/2002 -49.1% -44.8% 133 X Recession
10/9/2007 3/9/2009 -56.8% -32.6% 74 X Recession
4/23/2010 7/2/2010 16.0% -22.2% 10 X Euro Debt Crisis
4/29/2011 10/3/2011 -19.4% -23.2% 22 X U.S. Debt
Downgrade
7/20/2015 2/11/2016 -14.1% -14.2% 29 X China, Oil
Collapse
1/26/2018 2/8/2018 -10.2% -14.3% 2 X
10/3/2018 12/24/2018 -19.6% -20.2% 12 X
Trump’s reciprocal tariffs would hit these
European Union products that Americans
buy the hardest
Published Thu, Feb 13 20251:59 PM ESTUpdated Fri, Feb 14
202512:27 PM EST
Lori Ann LaRocco@loriannlarocco
Key Points
President Trump’s threat of reciprocal tariffs to be levied
on trading partners in the months ahead would hit the
roughly $600 billion worth of goods imported from
European Union member states in 2024.
Pharmaceuticals rank as the No. 1 import from the EU into
the U.S., according to Customs data, and popular weight-
loss drugs are among products that could be impacted.
Many auto brands have significant exposure as well,
including Mercedes, BMW, Volvo, Volkswagen, and Ford.
Ikea is among the top importers to the U.S., meaning there
will be impacts to the prices of popular home furnishings,
and many higher-end consumer items, from cosmetics to
jewelry, precious metals, art, wine and spirits, and
handbags, are likely to see price changes.
The U.S. imported roughly $600 billion worth of goods from
European Union member states in 2024, and as President
Trump prepares to potentially extend his tariffs beyond metals
to a wide range of products from allies, some product categories
would be hit much harder than others in the latest “reciprocal”
trade war move by the U.S. government.
The top U.S. import from the EU in 2024, by category and dollar
value, was pharmaceutical products, according to data from the
U.S. Trade Census analyzed by ImportGenius. Included in that
$127 billion worth of EU imports was semaglutide, an ingredient
used in the popular GLP-1 weight loss drugs from Novo Nordisk,
Ozempic and Wegovy. The GLP-1 compound was the sixth-largest
import from the EU to the U.S., at $15.6 billion.
The drug and medical industry, overall, will experience among
the most significant tariff impacts by sector. Surgical and
medical instruments imports were valued at $37 billion; medical
devices, which span CRT Machines, respirators, orthopedic
devices, and surgical equipment, tallied $22 billion. Vaccines,
hearing aids ($1.3 billion) and artificial joints ($2.5 billion) were
also among top imports in 2024.
Drug giants including Eli Lilly, which has a major presence in
Ireland — where its GLP-1 drugs that use the compound
tirzepatide, including Mounjaro and Zepbound, are
manufactured — and Novo Nordisk, which is based in Denmark,
have been increasing their manufacturing footprint in the U.S.
due to demand for weight-loss drugs, with Lilly investing
billions in new facilities, including R&D facilities near its
corporate headquarters in Indiana, and Novo Nordisk investing
in North Carolina.
Trump said Sunday that he planned to slap reciprocal tariffs on
“every country” that imposes import duties on the U.S. “Very
simply it’s if they charge us, we charge them,” he said on Air
Force One, NBC News reported.
President Trump’s action for now is only issuing a presidential
memorandum on the tariffs, and CNBC learned on Thursday that
the tariffs would likely not go into effect for at least a few
months. The White House said on Thursday that tariffs could be
levied in response to VAT taxes, which are used in the EU,
Canada, Mexico and many other countries, or devalued
currencies. Sending merchandise through another country to
avoid tariffs will lead to reciprocal tariffs as well.
Among products the White House cited in a fact sheet as unfair
in trade and tax practice are shellfish and autos between the U.S.
and EU; ethanol between the U.S. and Brazil; and trade in
motorcycles between the U.S. and India. The White House also
mentioned the digital services tax that many nations charge U.S.
tech companies, as Trump’s aggressive stance on international
economic relationships grows to cover a wider range of
corporate tax threats.
Exemptions for various industries such as pharmaceuticals or
autos might be considered, according to previous reporting
including comments from House Speaker Mike Johnson to
Reuters, but Trump said in Oval Office comments to the press on
Thursday that there will be no exemptions for any tariffs put in
place. Trump indicated on Thursday that auto import tariffs are
on the way, too, according to a Reuters report.
pharmaceuticals (8%), personal care products, like perfumes
and makeup (6%), and medical devices (5%).
Overall, makeup and perfume imports to the U.S. from the EU
reached $12.4 billion in 2024.
North Carolina ranks No. 3 in the nation, with pharmaceuticals
accounting for more than 44% of the state’s imports.
U.S. has collected $264 billion in tariff duties under Trump,
Biden
The impact of the tariffs will be felt by the businesses that import
EU products in for their business. Companies have been dealing
with higher tariff bills for years, with more than double the level
of tariffs collected during the Biden administration than during
Trump’s first term.
U.S. trade war tariffs have generated more than $264 billion of
higher customs duties collected for the U.S. government from
importers, as of the end of last year, according to analytics and
analysis from the Tax Foundation.
Out of that total, $89 billion (34%) was collected during the
Trump administration. The remaining $175 billion (64%) was
collected during Biden’s term.
Currently, the national tariffs bill to the business world is $78
billion, based on the 2024 data from Trade Partnership
Worldwide. That could rise to over $400 billion if all of Trump’s
new and threatened tariffs, from steel and aluminum, to Mexico,
Canada, China and the EU, are enacted. Overall, companies in
the U.S. will pay $43 billion relating to tariffs imposed by Trump
on China using powers under the International Emergency
Economic Powers Act of the executive branch, and another $11
billion in steel-aluminum tariffs. The IEEPA tariffs bill related to
Canadian imports is $103 billion; while it’s $126 billion for
Mexican trade; and $149 billion for EU products, according to
data provided by Trade Partnership Worldwide.
Peter Boockvar, chief investment officer of Bleakley Financial
Group, said while understands the desire to push back against
countries that tariff U.S. products more than we tariff their
goods, the trade war needs to be short-term, not long-term in
nature.
“If we’re doing it to raise money and to protect U.S. industries,
there will be more losers than winners on the business side and
consumers will be left paying more for things,” said Boockvar.
“Yes, higher tariffs can be just a one-time step up in pricing, but
the last thing consumers need after a 20%+ cumulative rise in
their cost of living over the past few years, is another increase.”
The latest U.S. consumer inflation data for the month of January
showed a larger than expected rise, another sign among many
that the recent progress the Federal Reserve had made in
bringing inflation back down closer to its 2% target has stalled
out, though wholesale inflation numbers this week were slightly
more encouraging.
From Ikea to industrials to luxury buyers
From an overall perspective, including freight forwarders who
move a large portion of trade on behalf of companies, Ikea
appears to be the top U.S. consignee of EU shipments. Wine and
spirits logistics company Hillebrand (part of DHL), and Amazon,
are among the top ranked U.S. companies importing from the
EU.
Outside of pharmaceuticals, machinery and mechanical parts
($89.8 billion), vehicles ($60.3 billion) and electrical machinery
and parts ($39.2 billion), are top EU import categories. In autos,
that includes Mercedes,
Michelin, Ford, Volvo, Volkswagen, and BMW.
A review of the Bills of Lading, which detail the items inside
import containers, show a much more expansive list of products,
from imports for Bosch and John Deere, to tiles from Ireland
and Spain, lithium-ion batteries from Poland, BMW-specific
lithium-ion batteries, truck seats, Irish Whiskey, Goya Foods
imports from Spain, wind turbines and spare parts from
Denmark (where renewable energy giant Vestas Systems is
based), steel pipes, and scaffolding.
The luxury consumer, and collector, will face a bigger bill, too.
“You have $9.4 billion in precious metals, stones, and pearls
being imported from the EU,” said William George, director of
research for ImportGenius. “For the luxury investor, $5.5 billion
in works of art, collector’s pieces, and antiques were imported
last year.”
Paintings topped this category at $4 billion, followed by
sculptures, at $800 million. Leather handbag imports were
valued at around $2.5 billion.
Americans enjoying their bubbly from sparkling water to Moet
Hennessy may also see an increase in their favorite beverage.
Sparkling water from four major brands (Evian, Perrier,
Pelligrino, and Gerolstiner) shows an average of 2400 twenty-
foot equivalent units (TEUs) a month, year-over-year.
Overall, wine imports were $5.5 billion in 2024, according to
George. “That’s around 14,000 containers a month from EU
countries. Almost half a container vessel.”
Grape-based brandies (cognac, armagnac) topped the spirits
category at $1.3 billion. Vodka was second at $1.1 billion.
Sparkling wine was $1.7 billion. Extra virgin olive oil imports
from the EU were a $1.8 billion industry in 2024.
Imports represent 15 percent of GDP, according to Larry
Lindsey, CEO of the Lindsey Group. “If we pay the whole thing
(which we most definitely will not) a 10 percent tariff on
everything would be about 1.5 percent of GDP. My back of the
envelope says we will pay about 0.9 percent of GDP,” he said.
But in his view, the impact of not maintaining the current tax
rates and rules would be two to three times as large due to
behavioral effects.
“Right now, our deal maker is picking the low-hanging fruit and
building momentum to establish that he is unstoppable. It is
working. The end game is going to be a 10 percent tariff on
everybody with a unified much higher rate on China. That is
going to take care of the [transferring of cargo] problem of
Chinese goods.”
India is also being targeted by the latest tariffs. While President
Trump has cited the example of Harley-Davidson motorcycles in
threatening India for retaliation based on its own trade duties on
foreign products — an issue India has already responded to
directly as India Prime Minister Narendra Modi comes to the
White House on Thursday — there are many categories of
products from the key emerging markets trade partner that the
U.S. market and businesses rely on.
“India has more tariffs than nearly any other country,” Trump
said in the Oval Office on Thursday.
According to Trade Partnership Worldwide’s database, potential
new steel/aluminum tariffs on India could reach $190 million,
based on 2024 import levels. The U.S. company most-exposed to
reciprocal tariffs is Walmart, which represented 62% of all
imports from India to the U.S. in 2024. Other imports include
items for IKEA; the antibiotic doxycycline; shafts for Kawasaki;
Lockheed Martin aircraft structural parts; aluminum castings;
McCormick spices like celery seeds and cumin seeds; parts and
accessories for transportation company International (formerly
Navistar); hundreds of items destined for retailers, from T.J.
Maxx to Ralph Lauren; and imports for Schneider Electric.
Correction: The top-state paying for EU tariffs if enacted on all
industries would be Indiana, according to a Trade Partnership
Worldwide analysis. An earlier version of this article misstated
the source of the tariffs data. Eli Lilly GLP-1 drugs Mounjaro
and Zepbound use a compound called tirzepatide. An earlier
version of this article misstated that fact.
https://www.cnbc.com/2025/02/19/fed-minutes-january-2025-
.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail
Fed officials are worried about tariffs’ impact
on inflation and see rate cuts on hold,
minutes show
Published Wed, Feb 19 20252:01 PM ESTUpdated Wed, Feb 19
20255:34 PM EST
Jeff Cox@jeff.cox.7528@JeffCoxCNBCcom
Federal Reserve officials in January agreed they would need to
see inflation come down more before lowering interest rates
further, and expressed concern about the impact
President Donald Trump’s tariffs would have in making that
happen, according to meeting minutes released Wednesday.
Policymakers on the Federal Open Market Committee
unanimously decided at the meeting to hold their key policy rate
steady after three consecutive cuts totaling a full percentage
point in 2024.
In reaching the decision, members commented on the potential
impacts from the new administration, including chatter about
the tariffs as well as the impact from reduced regulations and
taxes. The committee noted that current policy is “significantly
less restrictive” than it had been before the rate cuts, giving
members time to evaluate conditions before making any
additional moves.
Members said that the current policy provides “time to assess
the evolving outlook for economic activity, the labor market, and
inflation, with the vast majority pointing to a still-restrictive
policy stance. Participants indicated that, provided the economy
remained near maximum employment, they would want to see
further progress on inflation before making additional
adjustments to the target range for the federal funds rate.“
Officials noted concerns they had about the potential for policy
changes to keep inflation above the Fed’s target.
The president already has instituted some tariffs but in recent
days has threatened to expand them.
In remarks to reporters Tuesday, Trump said he is looking at
25% duties on autos, pharmaceuticals and semiconductors that
would accelerate through the year. While he did not delve too far
into specifics, the tariffs would take trade policy to another level
and pose further threats to prices at a time when inflation has
eased but is still above the Fed’s 2% goal.
FOMC members cited, according to the meeting summary, “the
effects of potential changes in trade and immigration policy as
well as strong consumer demand. Business contacts in a number
of Districts had indicated that firms would attempt to pass on to
consumers higher input costs arising from potential tariffs.“
They further noted “upside risks to the inflation outlook. In
particular, participants cited the possible effects of potential
changes in trade and immigration policy.“
Since the meeting, most central bank officials have spoken in
cautious tones about where policy is headed from here. Most
view the current level of rates in a position where they can take
their time when evaluating how to proceed.
In addition to the general focus Fed officials put on employment
and inflation, Trump’s plans for fiscal and trade policies have
added a wrinkle into the considerations.
On the flip side of worries over tariffs and inflation, the minutes
noted “substantial optimism about the economic outlook,
stemming in part from an expectation of an easing in
government regulations or changes in tax policies.“
Many economists expect tariffs that Trump plans on launching to
aggravate inflation, though Fed policymakers have said their
response would be dependent on whether they are one-time
increases or if they generate more underlying inflation that
would necessitate a policy response.
Inflation indicators lately have been mixed, with consumer
prices rising more than expected in January but wholesale prices
indicating softer pipeline pressures.
Fed Chair Jerome Powell has generally avoided speculation on
the impact the tariffs would have. However, other officials have
expressed concern and conceded that Trump’s moves could
impact policy, possibly delaying rate cuts further. Market pricing
currently is anticipating the next reduction to come in July or
September.
The Fed’s benchmark overnight borrowing rate is currently
targeted between 4.25%-4.5%.
https://www.cnbc.com/2025/02/19/elon-musk-will-check-with-
trump-on-idea-for-tax-refunds-from-doge-
savings.html?__source=iosappshare%7Ccom.apple.UIKit.activit
y.Mail
Trump says he’s weighing giving 20% of
DOGE savings to Americans
Published Wed, Feb 19 202510:52 AM ESTUpdated Thu, Feb 20
202510:02 AM EST
Sean Conlon@SeanAustin96
Pres. Trump: Considering giving 20% of DOGE savings to
Americans and 20% to paying down debt
President Donald Trump revealed on Wednesday that he’s
considering sending 20% of the money saved by the Department
of Government Efficiency advisory group to Americans.
“There’s even under consideration a new concept where we give
20% of the DOGE savings to American citizens and 20% goes to
paying down debt,” Trump said during his remarks at the FII
Priority Summit in Miami Beach, Florida.
His remarks came after Elon Musk said in a post on X Tuesday
that he “Will check with the President” on a proposal to send
U.S. households tax refund checks funded by savings created by
DOGE’s cost-cutting campaign.
That was in response to a separate post from James Fishback,
CEO of the Azoria investment firm, suggesting that Trump has
the opportunity to issue a so-called DOGE Dividend.
Musk has said that his goal is to cut federal spending by $2
trillion, out of a $6.75 trillion annual budget in the latest fiscal
year ended last Sept. 30. If that were met, Fishback suggests
taking 20% of that, or $400 billion, and distributing it to
taxpayers. That would amount to approximately $5,000 per
household, he said.
“When a breach of this magnitude happens in the private sector,
the counterparty, at minimum, refunds the customer since they
failed to deliver what was promised,” Fishback wrote in his
proposal. “It’s high time for the federal government to do the
same, and refund money back to taxpayers given what DOGE has
uncovered.”
Government stimulus checks mailed to millions of taxpayers in
2020 during the Covid pandemic bore Trump’s signature, the
first time a president’s name appeared on any IRS payments, The
Associated Press reported at the time.
According to DOGE, it has saved an estimated $55
billion through its efforts. However, recent reports suggest that
the actual figure is likely far below that.
Earlier Wednesday, Bloomberg reported that the DOGE
website only accounts for $16.6 billion of the $55 billion it claims
to have saved. Additionally, The New York Times said on
Tuesday that DOGE mistakenly cited an $8 billion saving on a
federal contract that was actually for $8 million instead.
Meanwhile, many of DOGE’s efforts have been met with court
challenges. But a federal judge on Tuesday denied a request to
stop DOGE from accessing federal agencies’ computer systems
or directing government worker firings while litigation is
ongoing.
Warren Buffett amasses more cash and sells
more stock, but doesn’t explain why in annual
letter
PUBLISHED SAT, FEB 22 20259:36 AM ESTUPDATED SAT, FEB 22 20259:57 AM EST
Yun Li@YUNLI626
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mystery over Warren Buffett’s surprisingly defensive stance deepened over
the weekend.
The 94-year-old CEO of Berkshire Hathaway sold more stocks in the latest
quarter and grew a record cash pile even larger to $334 billion, but failed to
explain in his highly anticipated annual letter why the investor known for his
astute equity purchases over time was seemingly battening down the hatches.
Instead Buffett said that this posture in no way represented a move away from
his love for stocks.
“Despite what some commentators currently view as an extraordinary cash
position at Berkshire, the great majority of your money remains in equities,”
Buffett wrote in the 2024 annual letter released Saturday. “That preference
won’t change.”
Berkshire’s monstrous ownership of cash has raised questions among
shareholders and observers especially as interest rates are expected to fall
from their multi-year highs. The Berkshire CEO and chairman in recent years
has expressed frustration about an expensive market and few buying
opportunities. Some investors and analysts have grown impatient with the lack
of action and have sought an explanation why.
Despite his repeated selling of stock, Buffett said Berkshire will continue to
prefer equities to cash.
“Berkshire shareholders can rest assured that we will forever deploy a
substantial majority of their money in equities – mostly American equities
although many of these will have international operations of significance,”
Buffett wrote. “Berkshire will never prefer ownership of cash-equivalent assets
over the ownership of good businesses, whether controlled or only partially
owned.”
Shareholders will have to wait a little longer it seems as the Omaha-based
conglomerate net sold equities for a ninth consecutive quarter in the final
period of last year, according to the company’s annual report, which was also
released on Saturday.
All told, Berkshire sold more than $134 billion worth of stocks in 2024. This is
mainly due to the shrinking of Berkshire’s two largest equity holdings
— Apple and Bank of America.
Meanwhile, it appears Buffett is not finding his own stock attractive either.
Berkshire continued its buyback halt, repurchasing no shares in the fourth
quarter or in the first quarter through Feb. 10.
This is despite a massive increase in operating earnings reported by the
conglomerate on Saturday.
‘Often, nothing looks compelling’
Buffett’s sitting on his hands amid a raging bull market that’s seen the S&P
500 gain more than 20% for two years in a row and move into the green again
so far this year. Some cracks have begun to develop in the past week,
however, with some concerns growing about a slowing economy, volatility
from rapid policy changes from new President Donald Trump and overall stock
valuations.
Berkshire shares were up 25% and 16% respectively the last two years and
are up 5% so far this year.
Buffett did offer perhaps a small hint about stock valuations being a concern in
the letter.
“We are impartial in our choice of equity vehicles, investing in either variety
based upon where we can best deploy your (and my family’s) savings,” wrote
Buffett. “Often, nothing looks compelling; very infrequently we find ourselves
knee-deep in opportunities.”
In this year’s letter, Buffett did endorse designated successor Greg Abel in his
ability to pick equity opportunities, even comparing him to the late Charlie
Munger.
“Often, nothing looks compelling; very infrequently we find ourselves knee-
deep in opportunities. Greg has vividly shown his ability to act at such times
as did Charlie,” Buffett said.
At last year’s annual meeting, Buffett surprised many by announcing that
Abel, vice-chairman of non-insurance operations, will have the final say on all
Berkshire’s investing decisions, including overseeing the public stock portfolio.
Some investors and analysts have speculated Buffett’s conservative moves in
the last year are not a market call, but him preparing the company for Abel by
paring outsized positions and building up cash for him to deploy one day.
Buffett did signal he would be deploying capital in one area: the five Japanese
trading houses he began buying nearly six years go.
“Over time, you will likely see Berkshire’s ownership of all five increase
somewhat,” he wrote.
HI Financial Services Mid-Week 06-24-2014