Digest – A Chill, Not a Thrill
Yesterday’s market traffic was a little quieter than Monday’s, but the buzz about trade still lingers. Today’s agenda is packed, yet whether anything will really shake things up remains up in the air.
Where We Stand
Yesterday felt a tad more relaxed than the first day in the new week, though that’s a low bar to meet after all that Monday drama. The 30‑day pause on US tariffs for Canada & Mexico has at least eased some nerves. That pause? Sure, it just pushed the decision farther into the future—so the prospect of tax hikes on those imports isn’t gone.
There’s a big review coming in April, ordered by President Trump, that could rewrite trade policy. At that point, tariffs might shift from a political bargaining chip to a tool aimed at balancing the trade gap. Either way, it’s still a zero‑sum game.
China’s hit‑back—a fresh 10% tariff on US goods—shows the world’s second‑largest economy didn’t just sit on the sidelines. They’re also pulling antitrust probes onto US tech giants like Alphabet and Intel.
With all the show‑stopper headlines flooding in, most traders are playing it safe. The number one mantra stays: protect the capital. That means trading around tariff news is riskier than ever. Plus, remember that Trump isn’t driven by polls; he’s judged by the US stock market’s performance. That keeps him from leaning too deep into protectionism. A “Trump put” is a long‑game possibility.
Stocks made a brief advance yesterday, but I’m still leaning toward caution in the short‑term. Prices will keep a keen eye on EBITs from Amazon, the Friday US jobs report, and volatility will stay high. The dollar danced lower, dropping toward the 108 mark, thanks to softer JOLTS job openings (7.6M vs 8.2M last month). However, the earlier solid beat keeps the FOMC outlook largely unchanged. I’d scoop the dollar dip because it’s hard for anyone to keep a long USD stretch for long. On the other side, gold is still on fire—record highs yesterday mean it’s likely to keep clawing upward, with haven demand humming on.
Look Ahead
- US ISM Services PMI – expect a flat 54.0 in January; employment data will hint at Friday’s nonfarm payrolls.
- Service PMIs for Eurozone & UK – final numbers coming in.
- ADP Employment Figures – not expected to match the NFP print.
- Treasury Refunding – a quarterly announcement that could shift issuance along the curve (Scott Bessent might bring back bills, unlike Yellen’s bill preference).
- Earnings News – Uber, Disney, Ford, Qualcomm on the docket.
Today’s packed schedule may not move the needle dramatically, but keeping an eye on these cut‑throat prints can help you stay ahead when the market finally decides to play ball.
