Good morning. Stocks are little changed to start the week as investors weigh the inflationary effect of tariffs … which have proven so far to be a bit worrisome, but certainly not catastrophic. Even so, the early-year expectation that inflation would fall to the Fed target of 2% seems now to be off the table as prices seem to be, instead, inching their way upward. Even so, not all prices are up across the board and shoppers have started to be more selective. I started to go off on a tangent about food costs … but there is a lot of disagreement about the reasons and whether prices will continue to rise. But one thing that made a lot of sense was the effect tariffs are having on vegetables … as much is imported (1/3 according to the U.S. Department of Agriculture), and unlike many other products you just can’t stockpile fresh vegetables in anticipation of higher prices down the road. Suddenly though, one non-tariff-related item that seems to be really jumping in price is electricity … and the power-hungry AI data centers aren’t helping the grid. I just wonder if solar energy systems … even small (non-roof) devices that people can have at their homes … will finally find their place in the sun. Just minutes ago, I read two reports that could influence the Fed at the next FOMC meeting as Reuters is reporting “home builder sentiment” has reverted to its lowest level in almost three years … while Goldman Sachs’ economic team forecasts employment to be weakening sharply. These are not good signs and right now the betting money seems to be on a 25 bp (0.25%) rate cut to be announced in less than a month … and even a bit more if data weakens further. There is an interesting article included below on “humanoid” robots … which will be here eventually. Sure … it is one thing to have a robot fold your laundry or even take a stroll along the street in Manhattan (as a Robostore robot did recently) … but Chinese scientists are in the process of creating a “pregnancy robot” to act as a surrogate with the introduction of an artificial womb. Scary? Revolutionary? A solution for a demographic problem that has been heading in the wrong direction? This is certainly something to watch. And on a final note, scientists claim there is a certain time period during the day in which we are smarter … more focused … and at our “cognitive best.” Recognizing this exists is good news. The bad news? We are most productive and best capable of mental achievement between the hours of 11 AM and 1 PM. … right when most of us are at lunch. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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