The S&P 500 plummeted more than 10% over the subsequent three days, and at its lows, the index was down 19% from February record highs. Investor anxiety was through the roof, as retirees watched their relatively secure portfolios get hammered. The President quickly shifted, announced the 90-day pause, and the rollercoaster shifted in the opposite direction. The market has recovered with the S&P 500 and Nasdaq 100 now positive for the year. A constructive trade deal with the United Kingdom and advanced conversations with China on lowering tariffs have also bolstered investor confidence. But it would behoove the President to take into consideration the long-term effects of elevated tariffs. His base support is seeking economic security.

The Fed is “trapped” at the moment, reluctant to make any significant policy moves until they can gauge the true effects of President Trump’s policies. During the Fed’s most recent March 18-19 meeting briefing, Fed Chair Jerome Powell cited a form of the word “uncertainty” a worrisome 18 times. The target range for the federal-funds rate remains at 4.25% to 4.5%, and Fed officials are projecting stagflation – lower growth and potentially higher inflation – for the year.

For the vast majority of 2024, approximately 500,000 barrels per day of crude oil shipments from Mexico to the US were dispatched to US Gulf Coast refiners. It is now expected that some percentage will likely be diverted to Europe or Asia. US Atlantic Coast motor fuel markets are forecast to be hit the hardest, and regional natural gas spreads could also be affected, which would ultimately increase consumer prices.

Over the past two decades, a loss of older, thick ice has created new channels. Before 2018 there were virtually no bulk carriers or gas tankers in the Polar Code area, but the Yamal Gas project and the Mary River Mine in Nunavut have contributed to a swell in activity. Chinese President Xi stated in a visit to Moscow in 2023 that stronger diplomatic relations with Russia were vital to counteract, “a long campaign by the United States to hobble China’s ascent.”

Also known as “shock therapy,” outside observers predicted this campaign fulfillment would result in a rise in poverty. No surprises here but rates this high do risk derailing what could be the region’s biggest turnaround story in decades. Milei and his supporters rightly point out that since Q3, there has been an emerging rise in real wages.6 This has contributed to greater economic activity and some analysts believe the recession likely ended in Q2 2024.7 The President was fully transparent with the electorate during his campaign, communicating frequently that there would be short-term pain and a recession. While some critical welfare programs have been cut, Milei has in parallel expanded the Universal Child Allowance and a popular Food Card program providing support to families in need.

In June, venture capitalist David Sacks held a swanky fundraiser for the former President in his Pacific Heights, San Francisco mansion. Guests paid up to $300,000, with rumored attendees spanning the C-suites of some of the U.S.'s largest crypto and blockchain companies. Meanwhile, it didn’t take much work for Trump’s team to compile a list of the regulatory crackdowns occurring at the hands of the Securities and Exchange Commission Chair, Gary Gensler. A Biden appointee, Gensler has sued crypto companies for violating securities laws and sought to dissuade banks from serving crypto companies.

It is still unclear how many members of the Lebanese militant group Hezbollah were killed when thousands of member pagers exploded simultaneously. Just the next day, Hezbollah walkie-talkies suffered similar malfunctions. Sadly, news of bombings, explosions, and death is commonplace in 2024 in the Middle East. But this latest operation, likely at the hands of Israeli intelligence tacticians, has news outlets and pundits questioning the role of of global supply chains, rightly or wrongly.

Unlike President Biden, the Vice President has little trade policy experience. Some pundits suggest she might consider pushing the US back to a more aggressive international digital trade policy with a particular emphasis on Californian tech company interests, her home base. Optimists are hoping that Harris could introduce some much-needed dynamism to trade negotiations, as the past four years have been uncharacteristically stagnant. Meanwhile, Trump is expected to wield his favorite negotiating stick - the tariff.

In addition to the regulations, banks were also constrained from making further loans to developers. President Xi assumed these short-term band-aids could stave off a pending disaster, but in August 2021, the country’s second-largest property developer, the Evergrande Group, promptly halted construction. Overdue payments were at the core of the stoppage, and the following month, Evergrande missed two offshore bond coupon payments for a total of $131 million.

Washington’s worry is two-fold: expanding Chinese influence in the region and the potential for future military installations. While BRI projects have grown significantly, and the Chinese potential for expanded military presence is vast, to date China operates just one logistics base in Djibouti and a paramilitary outpost in Tajikistan. Yet, a recent RAND report details Chinese interest in Cambodia, Equatorial Guinea, Namibia, the Solomon Islands, the UAE, and Vanuatu. Couple those with a March 2024 Newsweek report of additional interest in Cuba, Pakistan, Tanzania, Sri Lanka, and Myanmar, Washington’s anxiety does not appear irrational.

Borrowing costs are at levels not seen since the former Fed Chairman Paul Volcker era. Since the inflation peak of 9.1% in 2022, the CPI has declined steadily until late 2023 and early 2024. March 2024 CPI numbers revealed month-by-month increases, but not by overly significant margins: food was up by 0.1%, energy up 1.1%, and shelter up 0.4%. While unemployment is low, US consumer sentiment, as some economists believe, strongly correlates with borrowing costs and consumer credit supply, explaining much of the economic unease the country is experiencing.

In February, Rivian announced it would be cutting 10% of its workforce, prompting Tesla CEO, Elon Musk, to opine over X that the company would go bankrupt in roughly 6 quarters at the current trajectory. Musk then added, for good measure, “They need to cut costs massively, and the exec teams need to live in the factory or they will die.” Although Tesla aims to begin producing a more affordable model, Musk also warned his investors that 2024 Tesla EV sales are likely to be “notably lower.” Tesla reported quarterly revenue of $25.17 billion, falling short of analyst estimates of $25.64 billion.

A 2021 Congressional Research Service report found that steel plays a vital role in critical infrastructure projects, missile systems, and overall defense. Politically, practically no issues achieve bipartisan support in 2024, yet protecting the steel industry is one. Key swing states such as Ohio, Pennsylvania, and Minnesota employ tens of thousands of steelworkers, and both candidates are vying for their support.

President Biden has been trying to have it both ways with energy policy. While simultaneously approving controversial drilling ventures, the President is now flirting with an LNG (liquified natural gas) export ban. In an attempt to appease the environmentalist flank of the party, the administration is taking a “second look” at the criteria employed to approve new LNG export projects. The US began shipping LNG exports in 2016 and now exports more than any other country. The President is in a thorny position as renewables are far from a viable replacement for oil and gas, something a portion of his base remains in wild disagreement with.

In the aftermath of the 2008-2009 recession, interest rates were held down by increased savings from an aging population. Coupled with overall uncertainty, people were reticent to spend. This also resulted in less investment which ultimately ushered in a period of secular stagnation. The term “secular stagnation” initially appeared in the 1930s during the Great Recession. But it was Summers who revived it following the 2008 financial crisis.

One of the biggest wins for many CEOs post-Covid was their ability to clear inventory. This was welcome news to shareholders as companies were grasping for reliable demand models during the roller-coaster pandemic years. The inventory-to-sales ratio has remained steady at 1.30 since May 2023 and firms welcomed an additional win with a 3.1% holiday sales bump compared to 2022. All this suggests that the “just-in-case” hoarding strategy of the pandemic years is over and retailers are easing back into a “just-in-time” strategy.

Approximately 205 million square feet of warehouse space was leased by logistics operators in the second quarter of 2023. This was less than the same period in 2022 (235 million) but eclipsed the second quarter of 2019 – 135 million square feet. Firms are still seeking to expand but 2021 and 2022 are clouding expectations. The sector will not return to the pandemic heights, but companies are actively seeking to offset the supply-chain disruptions that were common during the pandemic by moving inventory closer to their customers.

Congress is enacting a multiyear farm bill, the 20th of its kind since 1933. Farm bills are normally passed every five years and shape not only what kind of food domestic farmers grow, but also how they raise said food and how it ultimately arrives on the consumer’s plate. Farm bills 50 years ago were focused narrowly on farmers and ancillary suppliers/providers. The farm bill that will likely be enacted come 2025 is expected to cover a dizzying array of interest groups that range from helping towns purchase police cars to broadband access. Conservation and environmental groups are omnipresent, keeping a close eye on sustainable farming practices and land use, while rural counties especially have their own integrated market of providers (bankers, insurance agencies, hunters and anglers, and local governmental agencies).

According to a Wall Street Journal analysis, despite some troubling macroeconomic indicators, compensation for the median worker over nearly 300 companies in the S&P 500 index was greater in 2022 (compared to the previous year). The leading company in the analysis was a real estate investment trust that managed casinos and hotels. Vici Properties saw the salary of their median worker rise by 1,373%. Granted, the firm did not include the tens of thousands of workers that are technically employed by casinos working at their properties, but the jump was certainly notable.

The Agriculture Foreign Investment Disclosure Act (AFIDA) was passed in 1978. The act states that all foreign persons (and entities) who acquire, hold, or transfer agricultural land interests must report those holdings and/or transactions to the Secretary of Agriculture (part of the US Department of Agriculture). Those who fail to do so are subject to penalties from the USDA’s Farm Service Agency, the entity tasked with the public inspection. As of December 31, 2020, the Farm Service Agency reported that foreign-held acres numbered 37.6 million. While that might sound like a considerable amount, those who track foreign investments posit this number is severely under-counted. A bipartisan act introduced by Jon Tester, a Democrat from Montana, and Mike Braun, a Republican from Indiana, aims to strengthen AFIDA.