Last week began with the topic of customs duties and ended with the same topic—since Trump had more or less hinted that he was going to announce new tariffs against just about everyone. And guess what? It’s not over yet, because last night—just before the Super Bowl—Trump doubled down by announcing a 25% tariff on all steel and aluminum imports. Since the announcement, futures have started rising again, as this is seen as good news for making America Great Again.
The Central Focus
To be honest with you, we still don’t know who’s next on the list to be hit with tariffs. We have a few ideas—somewhere between India and Europe—but one thing is certain: the central axis driving the markets right now is clearly Donald Trump. In fact, I even wonder if he ever gets a chance to sleep, because ever since he took office in the U.S., it feels like he’s always there, always present, and the moment you take your eyes off the screen for more than three minutes—BAM!—he’s back with something new. One day it’s $500 billion in AI, the next it’s fighting fentanyl by taxing Canada and Mexico, then it’s the return of plastic straws, the desire to dismantle wind turbines, or even buying Greenland. In short, he’s never out of ideas, and when it comes to tariffs, he still has a long list of countries to tax and industries to crush.
As for the market and us, the participants, we’re going to have to get used to it—because he’s here to stay for quite a while.
And the most telling thing about Trump’s omnipresence is that he overshadows everything. Absolutely everything. Whether we’re talking about macroeconomics or quarterly earnings, all it takes is for Trump to post something on X, and suddenly, the focus shifts. Take last Friday, for example—U.S. employment numbers were released. You’d probably agree with me that this has been an obsession of ours for at least 24 months now. If I recall what’s been happening since January 2023, we’ve been fixated on whether employment might slow due to high interest rates, which could, in turn, be seen as the first step toward a recession. I know we in this industry have the memory of a goldfish, but you’d still acknowledge that Non-Farm Payrolls have been a fixture on our calendars every first Friday of the month, right?
Well, ever since Trump has been back, it seems like that’s taken a backseat. The employment numbers were also released last Friday—it was actually the most important economic figure of the week. That said, the numbers weren’t particularly revealing: in January, the U.S. added 143,000 jobs, down from 307,000 in December and below expectations of 169,000. But—EUREKA, GOOD NEWS—the unemployment rate fell to 4%!
The takeaway from these employment figures is that the good cancels out the bad, leaving no clear indication about the future of interest rates. However, one thing is almost certain: rates will not be cut in March, and anyone still believing otherwise should probably seek professional help. But the real issue isn’t whether these numbers are good or bad—the real issue is that no one gives a damn! Everyone is completely hypnotized by the statements and grandstanding from the White House. This week, the U.S. CPI numbers will be released, and it feels like nobody cares because all attention is on Trump, Trump, and more Trump.
Then again, it’s not exactly surprising that he’s taking up so much space (to avoid saying ALL the space). If we remember the period from January 20, 2017, to January 20, 2021, we were bombarded with aflurry of tweets, dramatic twists, and a stock market that danced to the rhythm of White House announcements. It was like a real-life Netflix series. And guess what? We’re in for four more seasons! Honestly, I think I need to take a Xanax and stop getting worked up about this because we’re just at the beginning of the story. And if he manages to secure another term, well, the fun has only just begun.
For now, one thing is clear: if you’re an aluminum or steel exporter to the U.S., you’re probably having aterrible morning. There’s still a slim hope that Trump is only doing this to get something in return, and if you hand it over within 12 minutes, he might be magnanimous with you—but still, it’s not looking good.
AI, Always AI…
On another note, the other big topic at the start of this week is one we’ve beenhearing about for months. Yes, you guessed it—ARTIFICIAL INTELLIGENCE. I know, it’s not very original, but hey, I don’t make the news! And honestly, when I look at global headlines, I’m fascinated by howmuch we’re willing to invest in Artificial Intelligence while seemingly neglecting investment in human intelligence. Just look at the sheer number of idiots multiplying at an alarming rate. But that’s another debate that would take way too long!
Let’s at least acknowledge that the brilliant President Macron—the French guide, the beacon of intelligence in the Hexagon—has just announced that France will invest €109 billion in artificial intelligence. I’m not entirely sure, and I don’t have the exact figures, but I highly doubt that national education spending is anywhere close to that. Not to mention the irony of France signing blank checks for AI while its deficit is skyrocketing, and the government has no idea how to make it to the end of the month.
Nevertheless, AI investment is now the “other big market obsession.” Speaking of which, I want to quickly revisit an interesting and quickly forgotten event: just two weeks ago, we started a Monday much like today, except the markets took a nosedive after a new app topped the Apple Store charts. This app, called DeepSeek, was supposedly about to put us all in trouble for at least two days.
The issue with DeepSeek wasn’t so much that this AI was more powerful than ChatGPT. The real problem was that it was a lot—I mean, A LOT—cheaper than ChatGPT, to the tune of 96% less expensive. On top of that, it ran on outdated chips, and its development costs were laughable compared to the billions invested in AI in 2024.
The Reign of Terror
Fifteen days ago, we were in the reign of terror, because we were starting to wonder how it was even possible to burn through so much cash if it wasn’t going to amount to anything. But then the narrative did its job, and the Magnificent Seven began declaring that they wouldn’t be changing their strategy in 2025—that is, they would continue investing massively in the sector. Some companies even released positive quarterly reports and took the opportunity to PRAISE AI’s profitability—just look at Palantir. Palantir has soared 35% since announcing its earnings and is now trading at 70 times its annual revenue, while companies like Microsoft trade at only 15 times. And on top of the “encouraging” comments about the sector, when you looked at the “pledges of donations” in favor of AI in 2025, you didn’t need artificial intelligence to figure out that we were going to burn through as much money as in 2024, if not more!
And this ability to print money to invest in AI is the other hot topic of the moment. First, we managed to wipe the “DeepSeek” story from news sites, and now everyone is talking about the mountains of cash that will be poured into AI and how much wealth it will generate in the coming years. That is, of course, as long as AI doesn’t stumble upon a rerun of Terminator and decide to turn into SKYNET. But that’s a concern for another time—for now, the main takeaway is that over the past seven days, the two dominant topics have been Trump and AI, both vying to see which one will push the S&P 500 to new all-time highs.
The Rest
This morning, just like what I’ve been saying, Asian markets are mixed. Overall, China, Hong Kong, and Japan are up, riding the AI wave, while India is under pressure due to tariff concerns. It’s also worth noting that mining companies headquartered east of Washington are not having the best Monday of their lives. Japan is up 0.27%, China is up 0.42%, and Hong Kong is surging 1.7%. As for Bitcoin, it’s at $97,000, oil is at $71.52, and gold is at an all-time high. As usual.
There aren’t a ton of “news of the day,” except that:
- Trump allegedly spoke to Putin, but Putin isn’t confirming it.
- Trump has ordered the production of pennies to stop since they cost more to make than their face value.
- Trump claimed there may be irregularities in the Treasury’s accounting and that U.S. debt might not be what it appears to be.
- Trump attended the Super Bowl, where the Philadelphia Eagles won.
- The latest polls show Trump has a 53% approval rating since taking office—in short, his voters haven’t abandoned him yet.
And to wrap things up, I could tell you about the Super Bowl Indicator, which suggests that if a team from the National Football Conference (NFC) wins, markets will rise in 2025. Conversely, if a team from the American Football Conference (AFC) wins, it’s party time for the bears. This little theory has worked so often that it’s almost credible… until it isn’t anymore, of course. Between 1967 and 2017, the Super Bowl Indicator had an 80% success rate. But since 2017, it’s been a disaster and no longer works at all. So I could tell you about it, but I won’t. Even though the Philadelphia Eagles are from the NFC, meaning it’s theoretically bullish, and theoretically, everything is going to be just fine.
The Numbers
As for economic data, there’s nothing today—except for Madame Lagarde speaking. But since she speaks almost every other day now, no one cares anymore. Tomorrow, however, Powell will testify before Congress, and he’ll do it again on Wednesday for those who weren’t paying attention. And on Wednesday, we’ll get the first U.S. inflation data of the Trump 2.0 era.
Earnings season is still going strong—today, we’ll have reports from McDonald’s, On Semi’s, and the Cantonal Bank of Glarus.
Until then, have a great day and a fantastic start to the week. See you tomorrow, as usual!
