The Executive Review #3

This article was written on February 14th, 2024. Things may have changed by the time you read this. For more information on stocks and the stock market, go to Trading View. 

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Independent Companies

Since the last Executive Review, President Donald Trump has continued to push forward with his proposed tariffs, fueling concerns about inflation and potential trade conflicts. The Federal Reserve is closely monitoring the situation, with Chair Jerome Powell signaling that rate decisions will be data-driven, balancing inflation concerns with economic stability. The bond market reacted strongly, with yields rising as investors priced in potential long-term inflationary pressures. Meanwhile, consumer confidence dipped slightly as price hikes loomed over essential goods.

The proposed tariffs have drawn mixed reactions from corporate leaders and policymakers. While some sectors, such as domestic manufacturing, may benefit from reduced foreign competition, others, including the automotive and technology industries, have expressed concerns about increased production costs and supply chain disruptions. Large multinational corporations are considering contingency plans, with some exploring alternative sourcing and potential shifts in manufacturing to offset potential tariff impacts.

Elon Musk’s social media platform, X, remains in the spotlight after its intervention in the Infowars bankruptcy sale. The legal battle over the inclusion of Alex Jones’ social media accounts continues, raising questions about platform ownership and user rights. Musk’s actions have sparked debate, with some praising his commitment to platform control and others criticizing what they see as illegal interference. Regardless, this case could set a precedent for future social media disputes.

Adding to the tech industry’s turbulence, Meta and Google have faced increased scrutiny over data privacy concerns. A congressional hearing in mid-January saw both companies grilled over their handling of user data and their policies on misinformation. Regulators are considering stricter guidelines that could have lasting effects on the digital advertising scene and user engagement models.

Stocks

January 2025 kicked off with a volatile market as investors weighed economic data and geopolitical developments. The S&P 500 rose 2.3% for the month, the Dow Jones Industrial Average 1.8%, and the Nasdaq 3.2%. Growth stocks, particularly in tech, led the charge, while energy and industrial sectors saw mixed results.

Economic indicators showed resilience despite uncertainty. Job growth exceeded expectations with 175,000 new jobs added, bringing unemployment down to 3.9%. Inflation remained a concern, with core inflation rising 0.3% month-over-month. Retail sales surged 4.5%, bolstered by a strong holiday shopping season extending into the new year.

Bitcoin surged to an all-time high of $105,000, fueled by increasing institutional adoption and continued retail interest. Gold rose 2.1% to $2,785 per ounce, reflecting investor hedging against market risks. Meanwhile, bond yields remained volatile, with the 10-year Treasury yield closing at 4.35% as traders adjusted to shifting Fed expectations.

The housing market also experienced notable movement, with existing home sales increasing by 3.2% as mortgage rates showed signs of stabilization. Homebuilders like Lennar and D.R. Horton saw moderate stock price gains, reflecting renewed confidence in the sector. However, affordability concerns continue to weigh on first-time homebuyers, with the average home price rising by 6% year-over-year.

Stock Picks for March

Looking ahead, several stocks stand out as strong investment options:

Palantir (PLTR): With AI demand continuing to grow, Palantir’s leadership in data analytics and government contracts makes it a solid choice for investors. Strong earnings and high adoption rates support its momentum.

Amazon (AMZN): Despite macroeconomic uncertainties, Amazon’s e-commerce and cloud computing businesses remain dominant. A strong Q4 earnings report and continued AWS expansion keep it attractive.

ExxonMobil (XOM): Rising oil prices and strong refining margins make this energy giant a solid pick amid ongoing geopolitical tensions. The company continues to expand its renewable energy investments, positioning itself for long-term sustainability.

Microsoft (MSFT): The tech giant’s investments in AI, cloud computing, and enterprise software keep it well-positioned for long-term growth. Its strategic partnerships and acquisitions in artificial intelligence are further solidifying its dominance in the sector.

Berkshire Hathaway (BRK.B): A stable, diversified holding company with a track record of navigating market uncertainty. Warren Buffett’s portfolio remains a safe bet for long-term investors, with recent acquisitions indicating continued confidence in financial and energy sectors.

Despite market fluctuations, strong corporate earnings and consumer spending trends suggest that 2025 is off to a promising start. Investors should remain cautious but optimistic as economic conditions evolve. Those with a long-term strategy may find this period an opportune time to assess new market trends and emerging investment opportunities.