OPENING THESIS | While every financial headline this weekend screamed about tariffs, the real story slipped through the cracks. On Friday, two data points landed simultaneously that paint a picture far more consequential than any trade policy: the economy grew at just 1.4% annualized in Q4, while the PCE price index — the Fed's preferred inflation gauge — accelerated to 2.9% year-over-year. Core inflation hit 3.0%, up from 2.8%. That is the textbook definition of stagflation, and it changes everything about how you should position for the next six months.
MARKET OVERVIEW
The S&P 500 closed Friday at 6,909.51, up 0.7% on the day and 1.1% for the week. The Nasdaq Composite gained 0.9% to 22,886.07, snapping a brutal five-week losing streak. The Dow added 0.5%. But Monday morning tells a different story: futures are pointing 0.5% lower on the S&P and 0.7% on the Nasdaq after President Trump announced a 15% global tariff via executive order over the weekend, using Section 122 of the Trade Expansion Act — a legal workaround after the Supreme Court struck down his emergency tariff powers on Friday. Gold surged to $5,175 an ounce. The 10-year Treasury yield eased to 4.07%.
Investor Signal: Friday's rally was a tariff-relief trade, not a growth trade. Monday's reversal confirms the market priced in the wrong catalyst. | | | | When SpaceX goes public, it could hit a $1.5 TRILLION valuation - that would be 3,000 times bigger than Amazon's IPO. | Most investors will be locked out until AFTER the big announcement. | But I've discovered a "backdoor" that lets you grab a pre-IPO stake in SpaceX right now. | I'm revealing the ticker for free. | Click Here for Your FREE "SpaceX" Ticker. |
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| | DEEP DIVE
The Fed's Impossible Triangle
Here is the math that should keep Jerome Powell awake. GDP growth decelerated from 4.4% in Q3 to 1.4% in Q4 — a full percentage point below consensus. Consumer spending, which accounts for roughly 70% of economic output, is rolling over after the longest government shutdown in history gutted confidence. Meanwhile, core PCE at 3.0% is moving in the wrong direction. The Fed cannot cut rates into accelerating inflation. It cannot hold rates steady while growth collapses. And it cannot raise rates without triggering exactly the recession the data already suggests is forming.
Investor Signal: The last time GDP and core PCE diverged this sharply was late 2022. The S&P fell 19% in the following quarter before the Fed blinked.
WHAT IT MEANS
The bond market is already sniffing this out. The 10-year yield dipping to 4.07% despite hotter inflation tells you fixed-income traders are pricing in growth deterioration, not inflation persistence. That is a recessionary signal dressed up in a rising-rate costume. Meanwhile, the dollar index slipped to 97.75 — another tell. When the dollar weakens alongside falling yields, institutional money is rotating out of U.S. growth assets and into hard assets and international exposure. Gold's 2% move this morning is not a fear trade. It is a positioning trade.
Investor Signal: Watch the XLF-to-XLE ratio this week. Financials underperform energy in stagflationary regimes. If that spread widens, the rotation is confirmed. | | | | | Worksport Ltd. (Nasdaq: WKSP) is a Nasdaq-listed manufacturer reporting 61% revenue growth, 31% gross margins, and three product lines entering commercialization. | Operating from a 222,000-sq-ft U.S. facility built to support significantly higher revenue, the company is shipping clean-energy products into a $13B mobile power market and advancing federal and commercial partnerships. | Shares trade below $2 as multiple catalysts unfold. | Alert Disclaimer |
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| | SECTOR SPOTLIGHT
Consumer Discretionary Under Pressure
This week brings earnings from Home Depot and Lowe's — the two best proxies for consumer health in the real economy. With GDP at 1.4% and the housing market sending mixed signals (new home sales beat expectations, but mortgage rates remain elevated), guidance from these retailers will tell us whether the consumer is bending or breaking. Novo Nordisk's Monday plunge after CagriSema failed its primary endpoint adds another wrinkle: the GLP-1 trade that powered healthcare outperformance is suddenly in question. Microsoft is down 18% year-to-date. Tesla and Amazon have each shed more than 8%. The Magnificent Seven trade is fracturing, and the question is whether the rest of the market can hold the line. | | | | CLOSING LENS | Tuesday's State of the Union and Wednesday's NVIDIA earnings will dominate headlines. But the stagflation data from Friday is the signal that matters for portfolio construction. Growth is decelerating. Inflation is reaccelerating. The Fed is trapped. Position accordingly: overweight hard assets, underweight rate-sensitive growth, and keep dry powder for the volatility that historically accompanies this exact macro setup.
Thanks for reading. See you tomorrow.
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