HI Market View Commentary 03-31-2025
OK Let’s talk tariffs and what it really means:
Tariffs are a tax on items imported that we buy – That does not mean you have to buy that brand
Tariffs are hurting our stock markets – Uncertainty, Fear
TODAY – Market was down in the first hour around -1.63 on SPX, Market finished up +0.55
Here’s the problem = How many people sold off positions, added huge protection, closed spread trades or just gave up?
March before today S&P -6.27, Nasdaq -8.09, Dow -5.15
IF today was a single event then you lost big time trading BUT Investing is a process
Our move today was to add BAC protection on and to roll down NVDA short puts
Liberation Day = USA doing what’s been done to us for up to decades back to those countries who have Tariffed us
Reciprocating Tariffs is FAIR = IS it Right?= Everyone has a different Moral Compass
Second thing – How long can you last? What do you have to do to get back to break even?
Nobody lasted long enough through 2008 – ruined generations of investors/traders
Our process is to make something on the way down to add to your share count for an exponential return higher
Our Process allows us to sit through the harder days without having to make a knee jerk reaction
CNBC today made the comments Consumer Discresionary down -13%, Tech down 12%+
FRIDAY BIG DOWN DAY
Highlights
- Personal income increased 0.8% month-over-month in February (Briefing.com consensus 0.4%) following a downwardly revised 0.7% increase (from 0.9%) in January.
- Personal spending rose 0.4% month-over-month (Briefing.com consensus 0.6%) following a downwardly revised 0.3% decline (from -0.2%) in January.
- The PCE Price Index was up 0.3% month-over-month, as expected, which left it up 2.5% year-over-year, unchanged from January.
- The core-PCE Price Index jumped 0.4% month-over-month (Briefing.com consensus 0.3%), which left it up 2.8% year-over-year versus an upwardly revised 2.7% (from 2.6%) in January.
Key Factors
- The PCE Price Index for Goods was up 0.2% month-over-month, leaving it up 0.4% year-over-year versus up 0.6% in January.
- The PCE Price Index for Services was up 0.4% month-over-month, leaving it up 3.5% year-over-year versus 3.4% in January.
- Wages and salaries increased 0.4% month-over-month following a 0.2% increase in January.
- Rental income increased 0.9% month-over-month after increasing 0.7% in January.
- Personal interest income jumped 0.5% month-over-month after increasing 0.5% in January. Personal dividend income jumped 0.2% month-over-month after increasing 1.8% in January.
- Real disposable income was up 0.5% month-over-month and was up 1.8% year-over-year.
- Real personal spending increased 0.1% month-over-month and was up 2.7% year-over-year.
- The personal savings rate, as a percentage of disposable personal income, increased to 4.6% from 4.3%.
Big Picture
- The key takeaway from the report is that it was good on the income side, just okay on the spending side (real PCE up just 0.1%), and bad on the inflation side with the uptick in the core-PCE Price Index. That mixed complexion, which is apt to stir some stagflation angst as well, will keep the Fed in a wait-and-watch mode, especially with near-term price adjustments likely as the tariffs take hold.
https://www.briefing.com/the-big-picture
The Big Picture
Last Updated: 28-Mar-25 10:30 ET | Archive
Hard data vs soft data explained
Column Summary:
* Hard data measures actions; soft data measures thoughts
* Consumer sentiment surveys are the best examples of soft data
* Hard data matters more as a guidepost for the economy, monetary policy, fiscal policy, and earnings prospects.
Economic data gets released every week. Most of it is “high-frequency” data, which means it is typically published monthly or weekly so that market participants can have a fair sense of economic conditions.
It is important information, too, not only because the data provide a view of how the economy is doing but also because that view shapes the stock market’s earnings outlook.
The economic reports, however, are not all equal as market movers. Some, like the monthly Employment Situation Report, are ignition points for the market. Others, like the monthly Wholesale Inventories Report, have no market-driving influence.
There are many nuances when it comes to economic data, one of which is the difference between “hard data” and “soft data.” Today, we will explain that difference.
The Simple Answer
In his press conference following the March 18-19 FOMC meeting, Fed Chair Powell acknowledged that “The hard data are still in good shape. It’s soft data, the surveys that are showing significant concerns, downside risks, and those kinds of things.”
He added that the Fed wants to focus on the hard data and that if the soft data is going to affect the hard data, we should know it quickly.
So, what is hard data, and what is soft data? In the simplest terms, hard data measures what consumers and businesses are doing, whereas soft data measures what consumers and businesses are thinking.
Hard data is quantitative. Soft data, which can be presented in a quantitative light, is qualitative at its core.
Thinking and Doing
The best examples of soft data are consumer sentiment surveys.
Each month, the Conference Board produces its Consumer Confidence Index, and the University of Michigan releases its Index of Consumer Sentiment. The former concentrates more on what consumers think about labor market conditions, whereas the latter tends to revolve around what consumers think about financial conditions and their income prospects. Both ask consumers about their inflation expectations.
In the charts below, one can see that consumer sentiment weakened in 2025. General takeaways from recent surveys are that consumers are worried about future employment prospects, personal finances, and inflation.
On the surface, these weakening consumer confidence reports sound ominous for economic growth prospects. What consumers think, though, doesn’t always correlate with what they do, not over the short run anyway. The Secrets of Economic Indicators, authored by Bernard Baumohl, notes that a six-month or nine-month moving average of consumer confidence levels has been a better determinant of future household spending.
The Conference Board’s Consumer Confidence Index has declined in each of the last four months. The University of Michigan’s Index of Consumer Sentiment has declined for three straight months.
We would add that employment status is another key variable when it comes to what one thinks and what one does. People with jobs will continue to spend, although if they feel their job isn’t secure and that finding a new job will be challenging, they may change their approach by cutting spending for discretionary items (e.g., vacations, concert tickets, apparel, eating out, electronics).
Real personal spending (i.e., inflation-adjusted) is hard data that captures what consumers are doing with their money and how they are allocating expenditures between goods and services.
Recently, there has been a pullback in real personal spending, but it is unclear if that is related simply to the aberrant winter weather in the south and the tragic wildfires in California or if it is something more. It would be remiss not to add that, despite the recent pullback, real personal spending was still up 2.7% year-over-year in February.
Fortunately, the labor market remains in solid shape. The unemployment rate (a lagging indicator) remains near a 30-year low at 4.1%, and initial jobless claims (a leading indicator) are at levels consistent with positive economic growth.
Initial jobless claims running above 400,000 for several weeks is more indicative of an economy at risk of a meaningful slowdown because of a weaker labor market that will adversely impact spending activity. The latest report showed the four-week moving average at 224,000.
As an aside, the unemployment rate is derived from a household survey conducted each month that asks respondents their employment status, whereas initial jobless claims are hard data culled from the filings made at state agencies.
Briefing.com Insight
The soft survey data provides valuable insight into what consumers and businesses are thinking, yet it has its shortcomings. The biggest one for consumer surveys, arguably, is how the respondent feels when they are logging a response to a survey question.
For instance, they might answer the question on the tenth day of the month after learning on the ninth day that their company is announcing layoffs. Naturally, that would make them predisposed to feeling more negative about their job security and income prospects.
However, when they went to work on the eleventh day of the month, they were told that not only is their job secure, but they were being promoted and getting a raise to compensate for the additional responsibility that came with the new role. Their view on job security and income prospects would be drastically different. That might get captured in revisions to the preliminary reports, yet it goes to show how survey data is based on what one is thinking and not on what one is doing.
Still, a prolonged weakening in soft data is not to be dismissed. It can mark an important inflection point in the economy, particularly if there is a coincident increase in layoffs and a rising unemployment rate.
The adage that “actions speak louder than words” rings true in the examination of hard data and soft data. Hard data captures the action, while soft data captures the words. Both matter, yet hard data matters more as a guidepost for the economy, monetary policy, fiscal policy, and earnings prospects.
—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 April 2025?
03-31-2025 -4.0%
Earnings:
Mon: PVH,
Tues:
Wed: BB,
Thur: GES,
Fri:
Econ Reports:
Mon: Chicago PMI,
Tue ISM Manufacturing, Construction Spending, JOLTS
Wed: MBA, ADP Employment, Factory Orders, LIBERATION DAY
Thur: Initial Claims, Continuing Claims, ISM Services, Trade Balance,
Fri: Average Workweek, Non-Farm Payroll, Private Payroll, Hourly Earnings, Unemployment Rate,
How am I looking to trade?
Now we are protecting for technical crossovers to the downside AND tariff risk.
www.myhurleyinvestment.com = Blogsite
info@hurleyinvestments.com = Email
Questions???
Trump announces 25% tariffs on all cars ‘not made in the United States’
Published Wed, Mar 26 202512:45 PM EDTUpdated Thu, Mar 27 20257:50 AM EDT
Kevin Breuninger@KevinWilliamB
Key Points
- President Donald Trump on Wednesday said he would impose 25% tariffs on “all cars that are not made in the United States.”
- Trump said there is “absolutely no tariff” for cars that are built in the U.S.
- Auto stocks fell in after-hours trading following Trump’s announcement.
President Donald Trump on Wednesday said he would impose 25% tariffs on “all cars that are not made in the United States.”
Trump said there is “absolutely no tariff” for cars that are built in the U.S.
The new tariffs were codified in a presidential proclamation that Trump signed in the Oval Office. They will go into effect April 2, and “we start collecting April 3,” he said.
Trump White House aide Will Scharf said the new tariffs apply to “foreign-made cars and light trucks.” He clarified that they come in addition to duties that are already in place.
Scharf said the tariffs will result in “over $100 billion of new annual revenue” to the U.S.
Specifics about the proclamation were not immediately clear. Most vehicles are assembled from thousands of parts that may originate from dozens of different countries.
Trump said there will be “very strong policing” on which parts of a car are hit with tariffs.
European Commission President Ursula von der Leyen quickly criticized the new U.S. tariffs and vowed that the European Union “will continue to seek negotiated solutions, while safeguarding its economic interests.”
“Tariffs are taxes — bad for businesses, worse for consumers equally in the US and the European Union,” she said in a statement.
Auto stocks fell in after-hours trading following Trump’s announcement. Shares of General Motors, Stellantis and Ford Motor all lost roughly 5% in extended trading.
Trump on March 5 gave those automakers, known as the “Big Three,” a one-month exemption from his 25% tariffs on Mexico and Canada for vehicles that comply with an existing North American trade deal known as the USMCA.
Trump had previously hinted that new auto tariffs could arrive before April 2, the day his sweeping “reciprocal tariff” plan is set to begin.
“We’ll be announcing that fairly soon over the next few days, probably, and then April 2 comes, that’ll be reciprocal tariffs,” he said at a Cabinet meeting Monday.
Trump has long signaled his plans to impose heavy tariffs on foreign trading partners. But his unpredictable and frequently shifting policy rollouts have stirred turmoil in the stock market and left business leaders uncertain about how to plan for the future.
Trump has hyped April 2 as “liberation day” and “the big one.” His plan, as originally described, would slap reciprocal tariffs on all countries that have their own import duties on U.S. goods, while also imposing tariffs in response to other disfavored trade policies, such as the use of value-added taxes.
But Trump and his officials have recently suggested that the tariffs coming April 2 could end up being softer than they first appeared.
Trump said Friday that “there’ll be flexibility” on those tariffs, and on Tuesday night suggested the duties will be more “lenient than reciprocal.” Treasury Secretary Scott Bessent said last week that countries can pre-negotiate with the U.S. to avoid facing new tariffs on April 2.
Europe wants to pour billions of dollars into its own defense companies — but market watchers say it may not be able to shut American firms out
Published Wed, Mar 26 20259:32 AM EDT
- As Europe plans to pour billions of dollars into defense, many regional leaders are pushing for the money to be spent locally.
- However, industry watchers told CNBC decoupling European defense from U.S. companies may not be a straightforward process.
- One strategist said he expects to see “aggressive” moves from American defense companies as they look to maintain a presence in Europe.
As Europe plans to pour billions of dollars into defense, many regional leaders are pushing for the money to be spent locally — but some market watchers say it’s inevitable that U.S. companies will benefit from the impending security splurge.
Last week, a parliamentary vote for historic debt reform paved the path for a defense spending hike in Germany. Separately, the U.K. Prime Minister Keir Starmer vowed to hike Britain’s national spend on defense, and the EU pledged to mobilize up to 800 billion ($867 billion) euros in a bid to “urgently” ramp up the bloc’s security spending.
‘Prioritise European companies,’ EU says
Officials — and companies — have made it clear they want to keep the money inside European borders.
An official update on the EU’s ReArm Europe strategy last week called on member states to “spend better, work together, and prioritise European companies.” New spending plans said most non-member state countries — including the U.K. and the U.S. — would be shut out of procurement processes unless they signed Security and Defence Partnership agreements with the EU.
Meanwhile, Thales CEO Patrice Caine told CNBC earlier this month that Europe should “take its destiny in its own hands” and strive to keep new defense budgets in the region.
“It’s only a political willingness to buy more and more from European suppliers rather than suppliers based outside of Europe,” he said in an interview. “The U.S. supply their defense equipment systems from U.S. suppliers … Australia does the same, the U.K. does the same — so why should Europe do it differently?”
Defense decoupling ‘extremely difficult’
Although the EU appears committed to spending as much of its new defense capital as possible in Europe, keeping procurement solely within the region would require a sizable shift. A number of U.S. defense giants currently occupy a big space in the European military supply chain.
Maryland-headquartered Lockheed Martin, for example, has been a supplier to Europe for more than seven decades. In recent years, the firm has partnered with Rheinmetall to provide Germany with a customized rocket artillery system, started production of a HOMAR-A Multiple Launch Rocket System for the Polish government and sold Joint Air-to-Surface Standoff Missiles to the Netherlands.
U.S. defense giant Northrop Grumman is another major supplier to European militaries that has powered core command and control (C2) systems for NATO and Britain’s Ministry of Defense for 25 years.
Since the beginning of this year, RTX’s Raytheon — headquartered in Arlington, Virginia — has won a $529 million contract to replenish the Netherlands’ Patriot air defense system, as well as a $946 million contract to supply air defense systems to Romania.
Michael Witt, professor of international business and strategy King’s College London’s Business School, told CNBC that defense decoupling between Europe and the U.S. “will be extremely difficult in the short term.”
“So, some money will certainly go to U.S. suppliers,” he said of the new budgets. “But in the longer term, European defense needs to stand on its own feet, with as little U.S. input as possible because security cooperation by U.S. administrations can no longer be assumed.”
“Of special interest could be spending on nuclear weapons to replace the U.S. umbrella over Europe — warheads, delivery systems, and so on,” Witt added in emailed comments.
The U.K.’s multibillion-dollar Trident nuclear deterrent program utilizes U.S.-built missiles, and it is reliant on the U.S. for maintenance, according to think-tank Chatham House.
“Continuing to rely on the US for its deterrent seems a risky option,” researchers at the institution said in commentary published Monday. “The first Trump administration might have looked like an aberration, but his second term may reflect deeper long-term shifts in US foreign policy … exploring options to develop substitute capabilities with European allies may be the next logical move, despite the challenges.”
Tobias Ellwood, a former U.K. politician who held a senior position in Britain’s Ministry of Defense during his parliamentary career, also said the time has come for the U.K. to consider reducing its reliance on American-made defense supplies.
“We have to make this assumption that America isn’t going to be there, that they’re dialing back,” he said on a phone call. “So, what can they deny which we’re going to have to fill in?”
Earlier this month, the U.S. temporarily halted military aid to Ukraine after a public clash between the nations’ two leaders. Washington’s support for Kyiv has since resumed.
“If things go [down] the trajectory that we’re seeing, then we can easily see the closing down of defense markets, even our nuclear deterrent, so there’s tough questions for us,” Ellwood told CNBC.
Capacity problems
However, Europe faces another obstacle to its spending objectives, according to Thierry Wizman, global interest rates and currencies strategist at Macquarie Group. He told CNBC that there simply “may not be the capacity” to keep new security budgets from reaching American companies.
“The economies of scale in the European defense industry, the highly specialized nature of what is being built, and the need to keep the kit conforming with NATO standards and interoperability with U.S. systems, which will still be in Europe — all of that seems to suggest that a good part of it can be directed toward the U.S.,” he said on a call.
‘Aggressive’ deal-making
Even if capacity and supply chain issues can be resolved, U.S. firms could make strategic moves to avoid being shut off from the growing source of capital in Europe, Bill Farmer, managing director at investment bank Brown Gibbons Lang & Company (BGL), told CNBC.
“You’ve got a situation where the U.S. still has a large budget, but it’s potentially not growing as fast as what it has, and the dynamics have shifted away from larger platforms to smaller, more nimble companies,” Farmer, who leads BGL’s activities in the aerospace, defense and government services sector, said in a call.
“Whereas you go to Europe, and there is this huge opportunity — budgets are changing, there’s a huge opportunity for increased investment in capital there. So I think that you potentially could see some fairly decent sized acquisitions in Europe.”
He signaled that American defense companies would be “fairly aggressive” in pursuing deals with their European peers.
“Leonardo, Rolls Royce, Airbus, Safran, Thales — all of these have huge opportunities in front of them,” Farmer said. “And so I think you’re going to see U.S. companies having conversations with all of these folks about, is there an opportunity for us to make an investment in a company, is there an opportunity for us to carve out a piece of that business to get access to that market?”
https://www.cnbc.com/2025/03/31/trump-tariffs-dirty-15-reciprocal-retaliation.html
Meet the ‘Dirty 15’ countries that could be hit hardest by Trump’s tariffs
Published Mon, Mar 31 20253:25 PM EDTUpdated 2 Hours Ago
Kevin Breuninger@KevinWilliamB
Key Points
- Trump is set to launch “reciprocal tariffs” against all other countries that have their own duties on U.S. goods or other trade barriers.
- Treasury Secretary Scott Bessent has singled out what he called the “Dirty 15” — the 15% of countries that trade heavily with the U.S. and have high tariffs.
- The forthcoming import duties will pile on top of a flurry of others that Trump has already announced.
President Donald Trump is about to announce his biggest batch of tariffs yet. And while major details about them are shrouded in mystery, one thing is clear: Some trade partners are about to feel a lot more pain than others.
Trump on Wednesday is set to unveil “reciprocal tariffs” against other countries that have their own duties on U.S. goods, or other policies that the White House considers unfair trade barriers. He has hyped up the kickoff date as America’s “liberation day” and “the big one.”
The plan has created significant uncertainty, and many of its core components — including the number of countries impacted, how each country’s tariff rate is being calculated, and which nations will be hardest hit — remain unclear.
While Trump has touted the new tariffs as the key to resetting America’s economic relationship with the rest of the world, some in his administration have suggested a narrower focus on a handful of prime targets.
Treasury Secretary Scott Bessent, in a Fox Business interview on March 18, singled out what he called the “Dirty 15.”
His was referring to the 15% of nations that account for the bulk of U.S. trading volume while imposing hefty tariffs and other “non-tariff barriers” on U.S. goods.
Bessent did not name those countries.
Kevin Hassett, director of Trump’s National Economic Council, said in a subsequent interview on the network that the administration is looking at 10 to 15 countries that account for America’s “entire trillion-dollar trade deficit.”
Hassett also did not name those countries. Data from the Commerce Department show that in 2024, the U.S. had the highest goods trading deficit with China, followed by the European Union, Mexico, Vietnam, Ireland, Germany, Taiwan, Japan, South Korea, Canada, India, Thailand, Italy, Switzerland, Malaysia, Indonesia, France, Austria and Sweden.
The Office of the U.S Trade Representative, in a notice seeking public comment as part of a review of unfair trade practices to be delivered to Trump by Monday, listed 21 countries in which it is “particularly interested.”
Read more CNBC politics coverage
Those include many of the countries in the Group of 20, as well as other “economies that have the largest trade deficits in goods with the United States,” according to the notice.
They are: Argentina, Australia, Brazil, Canada, China, the European Union, India, Indonesia, Japan, Korea, Malaysia, Mexico, Russia, Saudi Arabia, South Africa, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom and Vietnam.
The White House did not respond to CNBC’s request for clarification on the forthcoming tariffs or the Dirty 15.
Trump muddied the waters further Sunday, when he rejected the idea that just 10 or 15 countries would face reciprocal duties on Wednesday.
“You’d start with all countries,” Trump told reporters on Air Force One, adding that there is “not a cut off.”
Trump has pointed to America’s trade deficits as he argues that virtually all trading partners are “taking advantage” of the U.S.
Many economists say that the U.S. importing more than it exports from many countries is not inherently a bad thing, but rather reflects strong domestic demand for goods that may be sourced more cheaply elsewhere.
The forthcoming import duties will sit on top of a flurry of others that Trump has already announced, including blanket tariffs on China, steep tariffs on Canadian and Mexican goods that do not comply with an existing trilateral trade deal, steel and aluminum tariffs and, most recently, tariffs on foreign cars and imports of key parts.
He has also said that more tariffs on specific industries, including pharmaceuticals, are on the way.
Trump says reciprocal tariffs will ‘start with all countries,’ rejects narrower launch
Published Mon, Mar 31 202510:00 AM EDTUpdated 3 Hours Ago
Kevin Breuninger@KevinWilliamB
Key Points
- President Donald Trump said that his “reciprocal tariffs” plan will target all other countries when they are unveiled this week.
- Trump pushed back on the possibility that the new tariffs would only target the top 10 or 15 trading partners that have their own import duties on U.S. goods.
- The swirl of uncertainty surrounding the forthcoming tariffs has caused turmoil in the stock market.
President Donald Trump said that his “reciprocal tariffs” plan will target all other countries when they are unveiled Wednesday, injecting more uncertainty into the much-hyped trade policy just days before its rollout.
“You’d start with all countries,” Trump told reporters on Air Force One late Sunday. “So let’s see what happens. There are many countries.”
There is “not a cut off,” he added.
Trump explicitly pushed back on the possibility that the new tariffs would only target the top 10 or 15 trading partners that have their own import duties on U.S. goods.
“Who told you 10 or 15 countries?” Trump asked a reporter. “You didn’t hear it from me.”
The potential economic impact of another round of sweeping tariffs, coupled with the lack of advance clarity about them, has caused turmoil in the stock market. All three major indexes fell sharply when markets opened Monday morning, though the Dow Jones and S&P 500 turned positive in afternoon trading.
Multiple Trump administration officials have suggested that reciprocal tariffs would be focused on a handful of countries that have large trade imbalances with the U.S.
Treasury Secretary Scott Bessent singled out the “Dirty 15” in a recent Fox Business interview, while National Economic Council director Kevin Hassett has said that 10 to 15 countries account for most of America’s trade deficit.
The uncertainty surrounding the tariffs has contributed to a spate of dour economic forecasts for growth and inflation.
Goldman Sachs warned in a client note Sunday that aggressive tariffs could raise inflation and severely slow economic growth. A group of 14 economists surveyed by CNBC, meanwhile, suggested the White House moves could create a stagflationary environment.
That is not the view at the Trump White House, however.
“It is a beautiful thing to watch!” Trump wrote Monday, describing an economic “transformation” he said is underway.
In two separate Truth Social posts, the president pointed to a series of recent investment pledges from private companies.
Trump’s tariffs mean Europe must take control of its future, says ECB’s Lagarde
By Reuters
March 31, 20251:30 AM MDTUpdated 14 hours ago
PARIS, March 31 (Reuters) – The likely implementation of tariffs imposed by the United States on April 2 means Europe will have to take better control of its future, European Central Bank (ECB) head Christine Lagarde said on Monday.
“I’ve tried to describe this as a moment for our Europe… and I see it as the start of a march towards independence,” Lagarde said in an interview on France Inter radio
The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news.
“He calls it Liberation Day in the United States. I see it as a moment when we must together decide to take better control of our destiny, and I think it’s a step towards independence.”
Trump is set to announce a comprehensive tariff proposal on what he’s called “Liberation Day” this Wednesday, after implementing levies on aluminium, steel, and automobiles, along with increased tariffs on all goods from China.
“He’s someone who always takes a transactional approach. He applies this kind of principle, which is more in the realm of business, to the management of international relations,” Lagarde said.
The ECB President reaffirmed her estimate of a decrease of about 0.3 percentage points for Europe in the first year of tariffs on U.S. imports from Europe.
She added that if Europe responds with reciprocal measures, growth will be even lower, down 0.5 percentage points.
Reporting by Gianluca Lo Nostro in Paris Editing by Sudip Kar-Gupta and Peter Graff
HI Financial Services Mid-Week 06-24-2014