Moe’s Market Memo

By Hightower St. Louis on February 7, 2025

Weekly data-driven insights on the markets and economy

First Week of February

Tariff tensions

In recent days, multiple central bank policymakers have noted the uncertainty surrounding tariffs and highlighted their potential impact on inflation. Chicago Fed President Austan Goolsbee cited supply chain threats, including “large tariffs and the potential for an escalating trade war.” Economists generally see tariffs as having one-time impacts on prices, but President Trump’s extensive tariffs could generate the underlying inflation the Fed fears. Federal Reserve officials, who usually avoid commenting on fiscal policy, are now speaking out due to these looming threats.[i]

December job openings decline

In December, job openings fell to 7.6 million, the lowest since September, while hiring, quits, and layoffs remained steady, according to the Job Openings and Labor Turnover Survey. The decline left the ratio of open jobs to available workers at 1.1 to 1. Despite a net gain of 256,000 nonfarm payrolls, openings dropped by 556,000, with significant decreases in professional and business services, private education and health services, and financial activities. Major stock market averages rose following the news, indicating a relatively healthy labor market as 2024 ended.[ii]

Amazon’s massive milestone

As of today, Amazon is projected to surpass Walmart in revenue, a key metric that Walmart has led for more than a decade. Analysts expect Amazon to report $187 billion in revenue for the latest quarter while Walmart is projected to announce $180 billion. Amazon’s growth is driven by its cloud business, Amazon Web Services, and a surge in online shopping. This marks the first time Amazon’s annual revenue will exceed $600 billion.[iii]

Trump fund eyes TikTok and infrastructure

President Donald Trump signed an executive order on Monday to create a government-run sovereign wealth fund for economic development and to potentially buy TikTok. The fund will focus on infrastructure projects and extending U.S. influence in regions like Panama and Greenland. Treasury Secretary Scott Bessent said the fund will monetize U.S. assets within 12 months. The order aims to promote fiscal sustainability, reduce tax burdens, and enhance U.S. economic leadership internationally.[iv]

Vanguard slashes fees

Vanguard announced on Tuesday its largest-ever expense ratio reduction, estimating savings of more than $350 million for its investors in 2025. The fee cuts, effective February 1, lower costs across 87 funds, including bond mutual funds, ETFs, U.S. equity, international equity, and money market funds. Lower fees mean investors can keep more of their returns, and the compounding benefits of these savings can accumulate over time.[v]

Grammys give back

The music industry united for a Los Angeles fire relief effort during the week of the Grammys, raising more than $120 million. Of that, $9 million was raised during the Grammys telecast, with host Trevor Noah encouraging donations. An additional $15 million came from Grammy-related events, including Clive Davis’ pre-Grammy gala. The funds will be split between MusiCares, Direct Relief, and other foundations to support ongoing initiatives and wildfire recovery efforts. ^[vi]

Mohammad Abouchleih, MBA, CIMA®

Investment Analyst

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[i] Cox, Jeff. “Fed officials are raising concerns about the impact Trump’s tariffs could have on inflation.” CNBC, 5 Feb. 2025, https://www.cnbc.com/2025/02/05/fed-officials-are-raising-concerns-about-trumps-tariffs-and-inflation.html. Accessed February 6, 2025.

[ii] Mutikani, Lucia. “US job openings decline as labor market steadily slows.” Reuters, 4 Feb. 2025, https://www.reuters.com/markets/us/us-job-openings-fall-sharply-december-layoffs-low-2025-02-04/. Accessed February 6, 2025.

[iii] Hum, Robert. “Amazon set to pass Walmart in revenue for first time.” CNBC, 6 Feb. 2025, https://www.cnbc.com/2025/02/06/amazon-set-to-pass-walmart-in-revenue-for-first-time.html. Accessed February 6, 2025.

[iv] Cox, Jeff. “Trump signs order establishing a sovereign wealth fund that he says could buy TikTok.” CNBC, 3 Feb. 2025, https://www.cnbc.com/2025/02/03/trump-signs-order-to-establish-a-sovereign-wealth-fund-that-he-says-could-buy-tiktok.html. Accessed February 6, 2025.

[v] Reuters. “Vanguard slashes fees; expects its investors will save $350 million in 2025.” Reuters, 3 Feb. 2025, https://www.reuters.com/business/finance/vanguard-slashes-fees-expects-its-investors-will-save-350-million-2025-2025-02-03/. Accessed February 6, 2025.

[vi] Wagmeister, Elizabeth. “Grammys and FireAid concerts expected to raise over $120 million for LA fire relief.” CNN, 4 Feb. 2025, https://www.cnn.com/2025/02/04/entertainment/grammys-fireaird-proceeds/index.html. Accessed February 6, 2025.