U.S. Indexes closed primarily in the green, with upside ensuing after the SCOTUS struck down President Trump’s IEEPA tariffs. Trump responded by implementing a global 10% tariff rate under Section 122 (which can legally be in place for a maximum of 150 days). Section 232 and 301 tariffs will remain as they are, while the US will also conduct Section 301 probes on nations over the span of five months (150 days). Once the probes are complete, the US will enforce a “fair” 301 tariff rate. Overall, it seems the measures taken by Trump will offset the lost revenue from IEEPA tariffs. The Treasury expects tariff revenue in 2026 to be unchanged from prior estimates. In response to the ruling, T-notes were sold on the prospects of lack of income and potential tariff refunds but swiftly pared on the expectation that Trump will enforce tariffs through other means – which was later confirmed. In FX, the reaction was to sell the Dollar, but ultimately it pared from worst levels and ended the session only slightly lower. The Australian Dollar outperformed while havens lagged. Crude prices settled flat but in choppy trade, with any gains overnight offset by reports that Trump is considering a limited strike on Iran. Silver and Gold prices added to recent gains while Bitcoin also caught a bid. Aside from tariffs, there was plenty of US data. Q4 GDP was soft, but weighed on by the government shutdown, while the December PCE report was hot. The S&P Global Flash PMI data in the US was soft while the University of Michigan Consumer Sentiment also missed expectations but new Home Sales beat. However, price action was largely dictated by the trade updates. After the Supreme Court ruled against Trump’s IEEPA tariffs, the US President responded by immediately implementing a 10% global tariff (under Section 122) while confirming that all Section 232 and 301 tariffs remain in place. The President has stressed that they will still impose tariffs through other means, and he touted five options: the Trade Expansion Act of 1962 (Section 232); the Trade Act of 1974 (Sections 122, 201, and 301); and the Tariff Act of 1930 (Section 338). Trump did highlight that Section 338 takes longer to implement, however. He is also taking the angle that after Friday’s ruling, it is now clear what the US can and can’t do. Trump also noted they will be implementing Section 301 probes to protect the US, with the probing period lasting for five months, which will then help the US determine a fair tariff rate once the probes have been completed. On refunds, Trump said that if they have to refund the tariff revenue, they will be in court for the next five years, suggesting a decision will “have to be litigated!”. He also noted that some trade deals negotiated under IEEPA do not stand, but he stressed that nothing has changed with India. Trade deals that no longer stand will be replaced by other means of tariffs. The President also noted how he will go in an even stronger direction now, and he can charge much more than what he was charging. He also stressed that tariff income will now increase. A US official later announced that the US expects countries to honour trade frameworks. Meanwhile, Treasury Secretary Bessent said that estimates show that the use of section 122, 232 and 301 tariffs will result in virtually unchanged tariff revenue in 2026 – implying the measures made by the administration will offset any lost revenue from no IEEPA tariffs. The headline PCE rose 0.4% in December, accelerating from 0.2% previously and above the 0.3% forecast. This lifted PCE prices to 2.9% Y/Y, above both the 2.8% expectation and the prior reading. Core prices, the Fed’s preferred inflation gauge, were also strong, rising 0.4% M/M, above the 0.3% forecast and up from November’s 0.2%. Core Y/Y increased to 3.0% from 2.8%, exceeding the 2.9% forecast. Within the report, Personal Income rose 0.3%, in line with forecasts but easing from 0.4% previously, while spending increased 0.4%, matching both forecasts and the prior. The firm inflation reading is a concern; however, January CPI data, which came in slightly softer, has helped offset some worries around the December PCE report. Core PCE remains the Fed’s preferred gauge, and Fed Chair Powell had indicated December Core PCE would rise 3.0%, with headline at 2.9%, leaving the data broadly in line with Fed expectations and unlikely to materially alter its stance. Recent data show stabilisation in the labour market, and the Fed Minutes noted that the vast majority saw signs of stabilisation and diminished downside labour risks. This shifts greater focus to inflation, which remains above target, and supports the case for holding rates for now. Pantheon Macroeconomics said it expects inflation data to cool decisively in May, prompting the FOMC, most likely under new Chair Kevin Warsh, to ease policy at its June, July and September meetings. Headline GDP grew just 1.4% in the quarter, well below the 3.0% forecast and sharply slower than the prior 4.4%. Much of the downside was attributed to the government shutdown, with the BEA estimating it subtracted about 1% from real GDP growth in Q4. Even though excluding this effect, growth would have been soft. Growth was driven by increases in consumer spending and investment, partly offset by declines in government spending and exports. On prices, the GDP price index rose 3.7%, well above the 2.8% forecast and matching the prior. Headline PCE rose 2.9% from 2.8%, above the 2.8% forecast, while core PCE increased 2.7%, down from 2.9% previously but above the 2.6% forecast. Despite the weak headline figure, ING said GDP is set to rebound, noting that underlying consumer and investment data remain firm. S&P Global Flash PMIs disappointed, as Manufacturing fell to 51.2 from 52.4, beneath the expected 52.6, Services dipped to 52.3 (exp, 53, prev. 52.7), leaving the composite at 52.3 (prev. 53.0). Overall, the Flash PMI metrics indicate slowest business growth for ten months amid weak demand, high prices and bad weather. Within the report, S&P Global chief economist Chris Williamson, noted customer demand growth has softened, and the PMI data so far this year are indicative of GDP rising at an annualized rate of just 1.5%, signalling a marked cooling of the economy in Q1 versus the robust growth rates seen in H2 ’25. Williamson added, “Cos. are suggesting that at least some of this slowdown may prove temporary, partly as extreme weather passes, with business growth expectations rising sharply to the highest for just over a year in February.” However, he adds, confidence remains subdued on the whole, as companies worry about the political environment and impact of policies such as tariffs. Elsewhere, Oil closed flat while Gold surged, ending Friday’s session with a 2.5% gain.
To mark my 3325th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 120 points on Friday and is now ahead by 5202 points for February, after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Recent Comments