The Federal Open Market Committee is not expected to change interest rates on March 19. That’s because the jobs market appears robust and inflation remains above target and accelerating slightly. The minutes from the FOMC’s last meeting in January stated that, “Respondents generally judged that policy rate reductions would occur later than previously assessed.” That implies any cuts may come later in 2025, if at all. In addition, Federal Reserve Chair Jerome Powell said, “If the economy remains strong and inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer.” in Congressional testimony…

Inflation continues to creep higher. Meanwhile tariffs are here, and more are on the way. Vanilla investors are rattled. The AAII (American Association of Individual Investors) Investor Sentiment Survey reveals 47% bears and only 28% bulls, its highest level of despair in a year. Contrarians like us, meanwhile, are salivating. We like it when individual investors are down in the dumps. And it’s not just AAII members—CNN’s Fear and Greed Index has been floundering in fear territory for the last month: Inflation fears? Tariff worries? Bring ‘em on! Let’s talk inflation first. The basic spreadsheet jockeys are surprised—sad even—that the…

Mercedes shares dived more than 5-1/2% as it slashed costs and forecast weaker profits for 2025 but analysts had been bracing for worse numbers and reckoned the company was doing well compared with other German automakers. Successful electric vehicles are key to any recovery, while an unexpected turnaround in internal combustion engine vehicle sales will boost profits short-term. BMW gets the nod from one analyst as being in a strong position, thanks to its leadership in electric vehicles. Meanwhile, Mercedes’ share price had been had been advancing, despite investors expecting the auto industry to face severe problems in 2025. European…

Warren Buffett released his widely anticipated annual letter to Berkshire Hathaway shareholders yesterday. Investors hoped to find insights into operating performance, plans for Berkshire’s cash stockpile, and major changes in portfolio composition. Here are the highlights. Operating Performance Berkshire Hathaway reported strong operating earnings of $47.44 billion in 2024, a 27% increase from $37.35 billion in 2023. Fourth-quarter operating earnings jumped 71% year-over-year to $14.53 billion, driven by significant gains in its insurance underwriting and investment income. Not all businesses are growing at the same pace. In his usual humble way, Buffett highlighted that “53% of our 189 operating businesses…

As the Federal Reserve focuses hitting their 2% annual inflation goal, so government policies may complicate decision making. Tariffs are likely to increase some domestic prices, though their scope remains unclear. Chinese tariffs are implemented but others are paused or not yet in effect. Inflation’s Recent Acceleration For inflation, prices have already accelerated slightly since September. That’s before any tariff impact. The acceleration is due to a range of factors. Most importantly, shelter costs continue to rise but also energy prices have generally risen and egg prices have surged to all-time highs, together with various service costs. However, compared to…

Elon Musk’s chainsaw wielding antics at CPAC may have riled up the bureaucracy-hating audience, but flashbacks to 1990s era Chainsaw Al Dunlap’s track record should make markets shudder. By Matt Schifrin The nation’s universal anger toward government bloat and waste has been one of the driving forces behind President Trump’s MAGA revolution. Recently his champion cost cutter, mega-billionaire Elon Musk, took the stage in Washington DC in front of an adoring group of conservatives hoisting a large red chainsaw over his head, a gift from Argentina’s right-wing president Javier Milei. But if corporate history is any guide, chainsaw wielding executives…

Week in Review Asian equities were mostly higher this week as Mainland China and Hong Kong outperformed while Australia and Thailand underperformed. It was a busy week for earnings as Alibaba beat estimates on the top and bottom line on strong cloud and e-commerce results, Baidu beat on search resilience, NetEase beat on bottom line profit only, Bilibili achieved its first profitable quarter, and Vipshop beat on its top line revenue. Humanoid robots were a theme in the markets this week, as multiple companies rumored to be developing the technology gained. U.S. President Donald Trump said he was mulling a…

Aggressive trade wars, government shutdowns, and unexpected disasters can send markets careening to the downside. The short-term damage to investments can be severe. But the key word here is “short.” And therein lies the opportunity for long-term investors like those saving for retirement. To fully appreciate the phenomenon and why it’s possible for anyone to take advantage of it, you must first understand the concept of “recency.” Derived from studies in behavioral psychology, when applied to finance, it can lead to market extremes. Whether it’s market highs or market lows, recency explains it all. Recency is defined as the tendency…

With an ever-growing list of similar-sounding ETFs to choose from, finding the best is an increasingly difficult task. How can investors change the game to shift the odds in their favor? Don’t Trust Style ETF Labels There are at least 232 different All Cap Blend ETFs and at least 916 ETFs across twelve styles. Do investors need 76+ choices on average per style? How different can the ETFs be? Those 232 All Cap Blend ETFs are very different from each other. With anywhere from 1 to 9,729 holdings, many of these All Cap Blend ETFs have drastically different portfolios with…

Alibaba Q4 Earnings Overview Alibaba (BABA US, 9988 HK) reported financial results after the Hong Kong close and before the US market opened this morning. The company beat on the big three: revenue, adjusted net income, and adjusted EPS, as the company’s core China E-Commerce, international E-Commerce, and cloud units were firing on all cylinders. This follows Jack Ma’s attendance at President Xi’s entrepreneur meeting on Monday. Could Ant Group go public? Maybe, though worth noting, it added $618 million to Alibaba’s bottom line. The company has gotten “lighter”, selling out of its physical stores Intime and Sun Art Retail,…