Eye On The Market

Fifty Days of Grey

Here’s the interesting thing about the stock market: it cannot be indicted, arrested or deported; it cannot be intimidated, threatened or bullied; it has no gender, ethnicity or religion; it cannot be fired, furloughed or defunded; it cannot be primaried before the next midterm elections; and it cannot be seized, nationalized or invaded. It’s the ultimate voting machine, reflecting prospects for earnings growth, stability, liquidity, inflation, taxation and predictable rule of law.

While market consensus assumed the administration would carefully balance inflationary, anti-growth policies with pro-growth policies, it has come storming out of the gate with more of the former than the latter. The only surprise is that it’s happening before 50 days has passed since the inauguration.

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Heliocentrism: Objects may be further away than they appear

Solar capacity is booming around the world, both utility scale and residential applications, and is often accompanied by energy storage whose costs are declining as well. Yet after $9 trillion globally over the last decade spent on wind, solar, electric vehicles, energy storage, electrified heat and power grids, the renewable transition is still a linear one; the renewable share of final energy consumption is slowly advancing at 0.3%-0.6% per year. Our 15^th annual energy paper covers the speed of the transition, electrification, the changing planet, the high cost of decarbonization in Europe, nuclear power, the Los Angeles fires, Trump 2.0 energy policies, renewable aviation fuels, superconductivity, methane tracking and the continually wilting prospects for the hydrogen economy.

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From Here to Eternity

From Here to Eternity: tracking Trump’s economic, market and constitutional milestones

Whether you’re elated or despondent about the blizzard of changes taking place in Washington, let me remind you of something: two years is an eternity in US politics. In this month’s note, we include a Trump policy impact tracker, and an assessment of the statutory and constitutional challenges that Trump policies face as the administration explores the outer limits of executive power.

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Inauguruption: the flurry of Trump 2.0 executive orders

Trump 2.0 is a hodgepodge of distinctly American political strains: the bare-knuckled nationalism and anti-elitism of Andrew Jackson, the tariff-loving protectionism of William McKinley, the small-government/pro-business policies of Calvin Coolidge, the unforgiving enemies lists of Richard Nixon, the deportation policies of Dwight Eisenhower, the manifest destiny of James Polk and the isolationism of 1914-era Woodrow Wilson. American First policies announced yesterday create risks for investors since its supply side benefits collide with its inflationary tendencies; there’s not a lot of room for error at a time of elevated US equity multiples.

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Eye on the Market Outlook 2025: The Alchemists

Deregulation, deportations, tariffs, tax cuts, cost cutting, crypto, oil & gas, medical freedom and Agency purges: What could possibly go wrong? Sections include the AI Golden Goose, the invisible nuclear renaissance, DOGE Quixote, the two China traps, Dr. Seuss goes to Europe, a crypto update and the 2025 Top Ten list.

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The Year of Living Dangerously

I was visited by six ghosts recently warning me of dangers related to predictions, allocations, apparitions, legalizations, expurgations and ablations. Here’s what they said.

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"Kamilton": the 2024 election and who tells your story

A reflection on the 2024 election and who tells your story. On Trump’s victory: market implications of a supply side boost from deregulation clashing against inflationary impulses of tariffs and deportations. The ten year Treasury will be the most reliable barometer of all. To conclude, an ode to vaccines and an RFK bibliography.

The Thucydides cap on the China equity rebound trade

For participants in the China equity rebound trade: once you hit your return targets, take the money and run.

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Mind the Gap: a historically polarized US election

Candidate policy comparisons in a historically polarized US Election; China stimulus package

The US is about to conduct its most polarized Presidential election in 100 years. Today’s note looks at candidate policy differences and implications for investors: government spending, taxation, tariffs, trade, immigration, regulation, NATO, energy, price controls and the Electoral College. We conclude with analysis of the China stimulus package, which might have a better chance of succeeding than recent failed efforts.

A severe case of COVIDIA: prognosis for an AI-driven US equity market

NVIDIA and its GPU customers are now a large driver of equity market returns, earnings growth, earnings revisions, industrial production and capital spending.

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