The major averages finished a week on the road to nowhere. After large losses Friday turned the week’s gains into a mixed bag of little real change. Despite excellent earnings and revenue data, as the first quarter reporting season winds down. Concerns about the economy and the war with Iran continue to haunt the minds of traders on the street.
Economic Concerns
Persist despite the overall fairly positive trend. Since Trump 2.0 three of the most significant economic concerns have been employment, real estate and tariffs. Employment in particular has given the pundits a lot of ammunition for the argument that Trump has mis managed the economy. Historically the consensus is that the US economy needs to produce 150,000-175,000 new jobs every month just to keep up with demographic demand. Since Trump 2.0 employment growth based on BLS Data has averaged an anemic 50,000 new jobs each month, while the federal workforce has shrunk by some 300,000 positions to levels not seen since the mid 60’s. All of which should have caused a significant rise in the unemployment rate. A notable decline in real wages and economic activity. Yet the economy chugs along, the unemployment rate remains fairly low at 4.3% and real wage growth remains robust. Cue immigration policy and a secure southern border. Items that go a long way to explaining why the perennially wrong pundits have started to begrudgingly describe the labor market as “weird”.
Real Estate
Remains another significant cause for concern, hence all the tension over interest rates between the Whitehouse and Federal reserve Chairman Powell. After the huge Covid run up in prices and mortgage rates stuck in the 6-7% range housing affordability became a real issue in the post Covid period of Trump 2.0 for both renters and homeowners. Inventory for sale has reached 10-year highs in the existing single family market as the 2026 spring selling season looks to be another “dud” following the pattern of the last few years. With sales bouncing along the lows seen during the GFC 2008-2012. While prices have so far resisted declining. Inventory levels such as this add considerable pressure. Something that is starting to show up in previously hot markets, following the usual pattern. Putting chairman Powell on the hotseat to lower interest rates and boost affordability. At the same time a considerable quantity of new construction has been completed of late with some 1.4 million units coming online. Further inflating inventory numbers. Trends that will lead to broad and noticeable price declines at some point.
Where’s My Trade War
The courts have repeatedly struck down the tariffs since March of 2025 with the Supreme Court Ruling 6-3 against in February on the “Liberation Day Tariffs”. While the U.S. Court of International Trade ruled 2-1 in May that across the board tariffs were illegal as well. There have been a number of lower court rulings against tariffs as well. From a historical perspective tariffs provided about 85% public funds to the US government from the late 1700’s through the inception of the income tax. After the 1913 passing of the 16th amendment following the now infamous meeting on Jekyll Island by the nation’s banksters and other financial luminaries. A story for another day.
Have a great weekend folks, see you soon. Caleb
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