Week in Review

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Week in Review

02/01/2025

For the week 1/27-1/31

[Posted 4:30 PM ET, Friday]

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Edition 1,345

The United States’ record for air safety has been the envy of the world.  That all changed Wednesday night when an American Airlines regional jet collided midair with a U.S. Army Black Hawk helicopter outside of Reagan National Airport in Washington, D.C.

A streak of more than 15 years without a major fatal airline crash was broken, and with 67 victims – 60 passengers and four crew on the American Airlines jet, three on the Black Hawk helicopter – it was the deadliest aviation disaster in the U.S. in 23 years.

But given all the close-call incidents on the ground and in the air in just the past few years (including one the day before at Reagan National), pilots and air-safety officials knew America’s luck would eventually run out.

As the ‘wait 24 hours’ guy, I am hardly the first person to draw any conclusions, and the National Transportation Safety Board has begun its investigation, having recovered the black boxes from the American Airlines, but not as yet the Black Hawk’s.

For now, however, we do know the air traffic control tower at Reagan National was understaffed on Wednesday evening, with two people handling the jobs of four among other colleagues inside National’s control tower at the time of the collision (one controller handling both the American regional jet and the helicopter, when normally he would focus on either commercial or military air traffic).  The control tower staffing levels, the Washington Post and New York Times reported, were “not normal” for the time of day or the amount of traffic over D.C., where an average of more than 100 helicopters a day zip around and underneath arriving and departing airline flights.

And we also know, from reports, that the Black Hawk may have deviated from its approved flight path, let alone it might have been at the wrong elevation, all of which an investigation will eventually confirm or deny and conclude whether or not these were contributing factors.

Among the victims of the flight originating in Wichita, Kansas, were a group of friends returning from a duck hunting trip and more than a dozen figure skaters associated with U.S. Figure Skating and the Skating Club of Boston, as well clubs in the Philadelphia and Washington areas, including two world champions from Russia (who had settled in the U.S. as coaches).

In an absolutely appalling, irresponsible, cruel, moronic, unhinged and disgraceful news conference from the White House briefing room on Thursday, President Trump, with bodies still being recovered and victims’ families yet to be notified, largely blamed the Army helicopter crew for the crash, who, he said, “should’ve seen where they were going,” and then he pivoted to blame the diversity policies of his Democratic predecessors, arguing that standards for air traffic controllers had become too lax, without providing any kind of evidence.  When asked for same, Trump said: “I have common sense.”

And yet it wasn’t immediately clear whether the DEI programs he cited had been changed by the Biden administration, because during Trump’s first term, the FAA’s website included information about a program aimed at hiring people with disabilities, according to archived versions of the agency’s website.

The NTSB will file a preliminary report as part of its investigation in 30 days.  A conclusion will likely take much longer.

The FAA, today, issued an order significantly restricting helicopter operations in the Reagan National area.

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Just as last June 6, 2024, was the 80th anniversary of the invasion of Normandy, D-Day, and the scenes of the last surviving soldiers from that horrific day that would eventually lead to victory over the Nazis, this past Monday, January 27, 2025, was the 80th anniversary of the liberation of Auschwitz, the Nazi death camp where more than 1.1 million people, mostly Jews, were murdered, and you had a small number of survivors in southern Poland just as in Normandy.

The commemoration Monday came amid a rise in anti-Semitism and nationalism in Germany and several other European countries.

Ronald Lauder, the president of the World Jewish Congress and chairman of the Auschwitz-Birkenau Memorial Foundation, said in an interview that “this is the most important anniversary we are going to have because of the shrinking number of survivors and because of what is happening in the world today.”

“We thought the virus of anti-Semitism was dead,” he said, “but it was just in hiding.”

As Lauder noted, and he could have been speaking of the survivors of D-Day as well, “In five years, there will be very few left.  And those who are still alive won’t have the energy to go.”  [Andrew Higgins / New York Times]

It’s up to the rest of us to make sure the truth is still told, because it is dangerous, people, not to remember.

When you are telling young people about the 1.1 million innocent victims at Auschwitz, for example, for context, this is greater than the populations of Jacksonville, Florida; Austin or Fort Worth, Texas; or Charlotte, North Carolina.

I’ve told this story before, but in 1999, shortly after I started StocksandNews, I went to Treblinka in Poland.  This was an extermination camp where 700,000 more Jews (conservatively) were slaughtered.  I just had to go, and I’ve told you what a spooky moment it was for me and my driver, the lone people there that day, as the old women outside their houses gave us mean looks as we drove into the site (years before they built a formal memorial and a museum).  Years earlier, these same women perhaps had watched full trains go into the forest, and empty ones come out.  [To get into Treblinka when I was there, you literally drove over the actual train tracks.]

And so it was that last Saturday, Elon Musk, with Germany facing a critical election in three weeks, Feb. 23, spoke by video link to an election rally in eastern Germany of the Alternative for Germany party (AfD) that is widely seen as a dangerous throwback to the nationalism that brought Hitler to power.  Musk urged Germans not to feel guilty for the Nazi-era crimes of their grandparents.

“It’s good to be proud of German culture, German values, and not to lose that in some sort of multiculturalism that dilutes everything,” Musk said to the audience of 4,500 alongside party leader Alice Weidel.

Musk added, “children should not be guilty of the sins of their parents, let alone their great grandparents,” apparently referring to Germany’s Nazi past.  “There is too much focus on guilt, and we need to move beyond that.”

Musk spoke of suppression of speech under Germany’s government, having previously attacked German Chancellor Olaf Scholz.

Scholz said he does not support freedom of speech when it is used for extreme-right views.

Musk spoke in favor of voting for the AfD, saying: “I’m very excited for the (party), I think you’re really the best hope for Germany...fight for a great future for Germany,” he told the audience.

Poland’s prime minister, Donald Tusk, said on Sunday that the calls for a “Great Germany,” echoed by Musk, “sounded all too familiar and ominous, especially only hours before the anniversary of the liberation of Auschwitz.”

It’s very troubling how Elon Musk is injecting himself into far-right politics throughout Europe.  If you don’t get it...open your eyes.

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President Trump: Week Two....

--At the Republican policy retreat on Monday at Trump National Doral outside Miami, lawmakers met with the president to discuss how to move his ambitious legislative agenda forward.

Speaker Mike Johnson and GOP members have to decide over the coming days on how to structure their massive, party-line bill covering everything from energy, border security and tax policy, while at the same time working on a separate, bipartisan funding measure that Republicans will have to negotiate with Democrats.

Trump on Monday said, “Whether it’s one bill, two bills, I don’t care,” throwing it back to Johnson and the GOP.

At the same time, Democrats are thinking of forcing a showdown over the debt limit to rein in Trump’s vast plans to reshape the economy and federal government.  This has normally been a Republican move but now Democrats can turn the tables, seeing as Democratic support is likely needed to raise the debt ceiling.

And then at the end of the 3-day retreat, lawmakers were left without a deal as fiscal hawks refused to push forward without assurances that the package would reduce the federal deficit.  Some House GOP members estimate Trump’s tax cuts, border spending and other priorities could add as much as $10 trillion in debt.

At this time, Speaker Johnson’s hopes of uniting the fractious GOP conference around a plan and his timeline appear dashed.

--Donald Trump said back in November he owed his victory to Americans’ anger over immigration and inflation, specifically the rising cost of groceries.

“When you buy apples, when you buy bacon, when you buy eggs, they would double and triple in price over a short period of time,” he told NBC’s “Meet the Press” in his first network television interview.  “And I won an election based on that. We’re going to bring those prices way down.”

But the early focus is clearly on immigration, the president banking on voters giving him a pass on prices and blaming Joe Biden.

What Trump is doing is pushing to reduce regulations and increase the amount of land available for drilling, which he says will lead to lower energy prices, which can have a ripple effect throughout the economy.

Vice President J.D. Vance, in an interview Sunday on CBS’ “Face the Nation,” said: “Prices are going to come down, but it’s going to take a little bit of time, right?”   He added, “Rome wasn’t built in a day.”

Sen. Chris Murphy (D-Conn.) said Trump preferred to distract people from inflation with talk of adding Greenland to the U.S. or seizing the Panama Canal.

“It’s catnip and it causes everybody to stop paying attention to their economic agenda, which has nothing to do with lowering costs and everything to do with rigging the economy to help the Mar-a-Lago crowd,” he said.

--The White House budget office on Monday ordered a pause in grants, loans and other federal financial assistance, according to a memo sent to government agencies on Monday, potentially paralyzing a vast swath of programs and sowing confusion and alarm among the array of groups that depend on them.

The directive threatened to upend funds that impact the American economy daily: Hundreds of billions of dollars in grants to state, local and tribal governments.  Disaster relief aid. Education and transportation funding.

The memo from Matthew Vaeth, the acting director of the Office of Management and Budget, left the scope of the pause unclear.

For one, it wasn’t clear whether President Trump has the authority to unilaterally halt funds allocated by Congress.  Senator Chuck Schumer (NY), the Democratic leader in the Senate, said in a statement that the memo “blatantly disobeys the law.”

“Congress approves these investments and they are not optional, they are the law,” Schumer said, adding that “Donald Trump must direct his administration to reverse course immediately and the taxpayers’ money should be distributed to the people.”

In his memo, Vaeth directed federal agencies to “temporarily pause all activities related to obligation or disbursement of all federal financial assistance,” and any other programs that included “D.E.I., woke gender ideology and the Green New Deal.”

Administration officials have said federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps, student loans and scholarships.

But on Tuesday afternoon, a federal judge temporarily blocked the freeze on federal grants and loans, issuing a pause until Monday.

According to Pew Charitable Trusts, federal grants to state agencies made up more than a third of all states’ revenue in the 2022 fiscal year, the most recent year available.  Nine of the 10 states that Pew calculates as being most dependent on federal grants for revenue voted for Trump in 2024.

Well, the White House then rescinded the order on Wednesday.

--The State Department issued a halt to nearly all existing foreign assistance and paused new aid, according to an internal memo sent to officials and U.S. embassies abroad.  An executive order issued by Trump on Monday called for a 90-day pause in foreign aid pending a review of efficiencies and consistency with his foreign policy.

The United States spent $68 billion on foreign aid in 2023 according to government figures.  The order makes exceptions only for emergency food aid and for military funding for Israel and Egypt.

Secretary of State Marco Rubio has previously stated that all U.S. spending abroad should take place only if it makes America “stronger,” “safer” or “more prosperous.”

--The U.S. will not go ahead with tariffs on Colombia, after Bogota agreed to accept – without restrictions – deported migrants, the White House said over the weekend.

President Trump had ordered 25% tariffs on all Colombian goods after its president barred two U.S. military deportation flights from landing in the country on Sunday.

Colombian President Gustavo Petro had initially responded by saying his country would accept repatriated citizens on “civilian planes, without treating them like criminals.”

Trump then announced “urgent and decisive retaliatory measures” in a post on Truth Social, including tariffs and visa sanctions.

A White House statement then said Colombia has now agreed to accept migrants arriving on U.S. military aircraft “without limitation or delay.” 

The White House hailed the agreement as a victory for Trump’s hard-line approach, after the country’s two leaders traded threats on social media.

Petro responded on X: “Your blockade does not scare me...”

But within hours, the two sides resolved the row. 

Petro not only acquiesced to Trump’s demands, he even offered up the official Colombian presidential plane to help shuttle migrants back to the country.

Colombia’s foreign minister Luis Gilberto Murillo said the country would “continue to receive Colombians who return as deportees, guaranteeing them decent conditions, as citizens subject to rights.”

Colombia actually accepted 475 deportation flights from the United States from 2020 to 2024, according to Witness at the Border, an advocacy group that tracks flight data, including 124 in 2024.

--President Trump defended his firing of up to 17 inspectors general at federal agencies, a sudden late-night purge of independent officials assigned to root out mismanagement and illegal acts in the U.S. government.

“It’s a very common thing to do,” Trump told reporters on Air Force One Saturday.

But it’s not and the law requires that Congress be given 30 days’ notice and detailed reasons for the dismissals. Their terms aren’t synchronized to presidential election cycles so they can maintain their independence.

Trump spared Justice Department inspector general Michael Horowitz in the mass firing late Friday, singling out Horowitz for praise for his report on former FBI Director James Comey, who was fired early in Trump’s first term over his investigation of claims that Trump and Russia colluded to interfere in the 2016 election.

A number of Republicans are not happy with Trump’s move, including key Sen. Chuck Grassley (IA).  Grassley said he wants to know why the 30-day notice wasn’t given and why each is being fired.  “Yeah, I’m working on a bipartisan letter to the president trying to get an explanation,” the senator said.

Grassley says he’s long championed the importance of transparency in government, acknowledging the IGs can be removed by the president, “but the law must be followed.”

--Another executive order President Trump issued Monday concerned the Pentagon, banning transgender personnel from serving in the military (currently 14,000, or roughly 1.0% of active-duty forces), banning diversity initiatives across the department, reinstating personnel who refused to take a Covid vaccine, and the promise to pursue a missile defense system for the U.S. based on Israel’s Iron Dome.

--Staff at the Centers for Disease Control and Prevention have been ordered to immediately stop engaging with the World Health Organization, a move that affects critical work on influenza surveillance and disease outbreaks across the globe, according to emails sent to staff Monday that were reviewed by the Washington Post.

President Trump ordered a U.S. exit from the global health body his first day in office, citing what he described as a mishandling of the coronavirus pandemic and other international health crises. 

Separately, last weekend the CIA issued a statement saying it has now concluded that the Covid pandemic most likely arose from a laboratory leak.

In doing so, the CIA has now joined the FBI and the Energy Department in identifying a laboratory mishap in Wuhan, China, as the probable source of the Covid-19 virus, which has killed more than 1.2 million Americans and over seven million people worldwide.

But the statement from the agency said: “CIA assesses with low confidence that a research-related origin of the Covid-19 pandemic is more likely than a natural origin based on the available body of reporting.”  [Emphasis mine.]

John Ratcliffe, the new director of the CIA, has long said he thought the lab leak theory was the most plausible explanation.

--In a memo from the White House’s Office of Personnel Management sent to federal employees on Tuesday, the Trump administration is offering buyouts to all federal employees who don’t wish to return to work at the office, White House officials confirmed.

The offer would give federal workers eight months of pay and benefits through September if they resign by Feb. 6.

The move comes after President Trump signed an order last week requiring all federal workers to return to in-person work.  Work-from-home policies enacted during the Covid pandemic remain in place for many federal workers.

Elon Musk, who heads Trump’s Department of Government Efficiency, has talked about a drastic reduction of the federal workforce to scale back the size of government.  He then touted the offer on X soon after it hit employees’ inboxes, arguing it was a crucial first step in reorganizing a federal bureaucracy he has long characterized as lazy and disloyal. 

It was not clear how much the voluntary buyout program could cost the government or how many employees might participate.

The federal government employs approximately 2 million people.

The American Federation of Government Employees, the largest federal employee union representing about 800,000 workers, slammed the buyout, noting the federal workforce is about the same size as it was in 1970 even though more Americans rely on government services.

“Purging the federal government of dedicated career civil servants will have vast, unintended consequences that will cause chaos for the Americans who depend on a functioning federal government,” AFGE National President Everett Kelley said in a statement.

“There are two million employees in the federal government.  Overwhelmingly, the career federal service in this country is far left, left wing,” Stephen Miller, White House deputy chief of staff for policy, told CNN on Tuesday.  “The American people voted for dramatic change implemented by Donald Trump.”

--On Wednesday, President Trump said he will order the construction of a mass detention camp that can hold 30,000 deportees at the Guantanamo Bay Naval Base, outlining plans for the largest U.S. facility of its kind.  Trump said the massive camp would “detain the worst criminal illegal aliens threatening the American people” and be “a tough place to get out of.”

--There are multiple reports that Trump administration officials are moving to fire FBI agents engaged in investigations  involving President Trump in the coming days, specifically those individual agents who may have worked on the inquiries into Trump’s efforts to overturn the 2020 presidential election and his hoarding of classified documents, as well as hundreds of criminal cases against rioters who stormed the Capitol on Jan. 6, 2021.

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Wall Street and the Economy...and the Fed

President Trump is threatening to levy 25% tariffs on Canada and Mexico this weekend, though negotiations are ongoing.  An additional 10% could be placed on China, as of Friday afternoon.

The Federal Reserve held the line on interest rates this week, as expected, maintaining the benchmark funds rate at 4.25-4.50 percent after cutting rates 100 basis points (a full point) since last September.

Fed Chair Jerome Powell signaled that he was open to additional rate cuts at some point but also made clear on Wednesday the economy was “strong” and there is a “solid” labor market, which infers the central bank intends to keep rates steady for the foreseeable future, pointing to a number of reasons why he and his colleagues expect to take their time before lowering borrowing costs again.

Chief among them: the wide uncertainty over how President Donald Trump’s policies – in areas such as immigration, tariffs, fiscal policy and regulation – could upend their expectations for the economy.

“The committee is very much in the mode of waiting to see what policies are enacted,” Powell said in his press conference following the Fed’s decision to leave rates unchanged.  “We need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be.”

“The broad sense of the committee is that we don’t need to be in a hurry to adjust our policy stance,” Powell said, a theme he repeated four times.

The Fed chief kept emphasizing the economy is in a “good place” overall and said policymakers wanted to see further declines in inflation before cutting rates, adding unexpected weakness in the labor market could also prompt a move.

Powell said rates are still “meaningfully” above the so-called neutral rate, at which the Fed is neither boosting nor slowing the economy.

The Chair said officials do expect to see further progress on inflation as rent and shelter price growth cools but stressed they will be waiting for that improvement to materialize.

The remarks indicate the Fed could remain on hold for some time.  Policymakers will update their projections on the economy and rates at their next meeting in March (the ‘dot plot’).

Powell knew the Fed’s decision would not be well received in the White House, and President Trump went on Truth Social shortly thereafter:

“Because Jay Powell and the Fed failed to stop the problem they created with inflation, I will do it by unleashing American Energy production, slashing Regulation, rebalancing international Trade, and reigniting American Manufacturing, but I will do much more than stopping inflation, I will make our Country financially, and otherwise, powerful again!  The Fed has done a terrible job on Bank Regulation. Treasury is going to lead the effort to cut unnecessary Regulation, and will unleash lending for all American people and businesses.  If the Fed had spent less time on DEI, gender ideology, ‘green’ energy, and fake climate change, inflation would never have been a problem.  Instead, we suffered from the worst inflation in the History of our Country!”

On the economic data front...the Fed then received key inflation figures, Friday, their preferred personal consumption expenditures index for December...0.2%, 2.6% year-over-year, up 0.2% from November on the latter; and for core, ex-food and energy, 0.2%, 2.8% from a year ago, this last one the money number.

All four figures were exactly as forecast, the 2.8% on core same as the prior month.  In other words, zero progress on the Fed’s target of 2.0%.

Separately, personal income rose 0.4%, in line, and consumption increased 0.7%, stronger than expected.

Earlier, we had our first look at fourth quarter GDP, 2.3%, lower than the 3.1% pace in the third quarter, with the U.S. economy growing 2.5% for all of last year.  [Ironically, the Atlanta Fed’s GDPNow barometer, in its final estimate the day before, lowered their Q4 forecast from 3.2% to 2.3%.  You rock, guys!]

December durable goods orders fell 2.2%, when a gain of 0.8% was expected, but ex-transportation the figure was basically in line, +0.3%.

December new home sales came in at a better than expected 698,000 annual rate.

The Case-Shiller home price index for November showed the 20-city index rising 0.4% over October and 4.3% year-over-year.

And a first look at manufacturing for January, the Chicago PMI, was a putrid 39.5, the 14th consecutive month below 50, which is the dividing line between growth and contraction.

Freddie Mac’s 30-year fixed-rate mortgage was 6.95% this week.

Next week, readings on manufacturing and the service sector, as well as the January jobs report.

--Randall W. Forsyth / Barron’s

“The Department of Government Efficiency, or DOGE, led by Elon Musk is unlikely to make a dent in the deficit.  Consider that in 2024 almost 60% of the $6.75 trillion in federal spending went for Medicare, Medicaid, and Social Security; while 13% went for interest on the national debt, and about the same amount for defense expenditures.  Discretionary nondefense spending, the likely target for cuts, accounted for only 13% of expenditures.

“The Congressional Budget Office projects the deficit to total 6.2% of GDP in 2025, shrink to 5.2% by 2027, then climb again to 6.1% by 2033....

“The CBO’s outlook embodies optimistic assumptions. It assumes no recessions in the coming decade.  It is based on current law, notably the expiration of the Tax Cuts and Jobs Act of 2017, the signature tax measure of the first Trump administration.  Renewal of the tax law, a major objective of Trump’s, would add another $4 trillion to the debt over the next decade.  And that is before adding goodies like exempting tips and taxes from overtime pay, as he promised on the campaign trail.  No one knows how much tariffs will offset the shortfall at this point.

“The CBO also assumes bond yields will be lower over the course of the next decade.  It forecasts a 4% average 10-year Treasury yield for 2025, falling to 3.9% in 2026-29, then 3.8% for 2030-35.”

Boy, I sure don’t believe this long-term rate forecast.  And as Mr. Forsyth notes, it’s the biggest risk facing both bonds and stocks.

Europe and Asia

The European Central Bank announced a 25-basis-point interest rate cut on Thursday, its fifth one since the central bank began easing monetary policy in June last year.

The reduction brings the ECB’s deposit facility, its key rate, to 2.75%, as expected by the market.

The ECB is grappling with balancing a re-acceleration of euro area inflation in recent months with sluggish economic growth in the region.

Following the announcement, ECB President Christine Lagarde said that the euro area economy “is set to remain weak in the near term.”

Speaking of the EA20 economy, we had a flash reading on GDP in the eurozone for the fourth quarter, unchanged over the previous quarter, and 0.9% vs. the same quarter of the prior year. [Eurostat]

2024Q4 vs. 2023Q4:

Germany -0.2%, France 0.7%, Italy 0.5%, Spain 3.5%.

Eurostat also reported on euro area unemployment for December, 6.3%, which compares with 6.5% a year earlier.

Germany 3.4%, France 7.8%, Italy 6.2%, Spain 10.6%, Netherlands 3.7%, Ireland 4.3%.

PMI readings for the eurozone next week.

Germany: The German economy is in deep crisis, with GDP likely to contract 0.1% this year, the BDI industry association said on Tuesday, putting it on track for three years of declining growth for the first time since reunification.

“The situation is very serious: Growth in industry in particular has suffered a structural break,” BDI president Peter Leibinger said in Berlin.  East and West Germany were reunited as a single sovereign state in the 1990s.

Increasing competition from abroad, high energy costs, still elevated interest rates and uncertain economic prospects have taken their toll on the German economy, which contracted in 2024 for a second year.

The dire economic situation is reflected in the storied auto industry as Volkswagen undertakes steep cost cuts to remain relevant.

The economic crisis is more than just a consequence of the pandemic and Russia’s invasion of Ukraine, Leibinger said.

The problems are home-made and the result of structural weakness since 2018 that governments have failed to tackle, he said.

Public investment in modern infrastructure, in the transformation and the resilience of our economy, is urgently needed, Leibinger said, calling for a reduction in bureaucracy, lower energy prices and a clear strategy for strengthening the German innovation and research landscape.

In a nutshell, Germany hasn’t had a Plan B and the people have lost their confidence.

Turning to Asia...China celebrated the Lunar New Year this week.  But the government last Sunday released the January PMI data a little early, manufacturing at 49.1 vs. 50.1 prior, and non-manufacturing 50.2 vs. 52.2 in December, both figures below expectations and not real good.

In Japan, a preliminary reading on industrial production for December was down 1.1% year-over-year, with retail sales for the month up 3.7% Y/Y and the unemployment rate at 2.4%.

Street Bytes

--It was a rather volatile week, starting off Monday with the DeepSeek carnage in some of the Mag Seven and other AI-related stocks.  And now the market could be faced with a tariff issue come Monday.

But for this week the major averages were mixed...the Dow Jones adding 0.3% to 44544, the S&P 500 losing 1.0%, and Nasdaq falling 1.6%.

Next week, among the earnings reports we’ll see are those from Alphabet/Google and Amazon.

--U.S. Treasury Yields

6-mo. 4.30%  2-yr. 4.23%  10-yr. 4.58%  30-yr. 4.83%

Little change following the Fed meeting and the PCE today.  But next week could be different.

--Crude oil prices continued to fall with West Texas Intermediate closing the week at $72.50.  There has been uncertainty over whether President Trump, should he enact tariffs on Canada and Mexico this weekend, will exempt oil, the two the largest crude exporters to the U.S., especially Canada.

There is also an emergency OPEC+ meeting on Monday, as Trump pressures the group to lower oil prices.

--Exxon Mobil on Friday beat Wall Street’s estimate for fourth-quarter profit as higher oil and gas production offset lower oil prices and weaker refining margins.

Adjusted profit was $7.39 billion or $1.67 per share, beating analyst estimates of $1.56.  The No. U.S. oil producer reported earnings of $33.46 billion for 2024, down from $38.57bn the year earlier.

Production reached 4.6 billion barrels of oil equivalents per day, growing from 4.58bn in the third quarter.

But earnings from producing gasoline and diesel were $323 million, a large fall from $3.2 billion a year earlier. The startup of new oil refineries by other companies in Asia and Africa led to higher global fuel supply, even as demand for gasoline and diesel lagged expectations.

The refining business remains under pressure as the additional supply enters the market, CFO Kathryn Mikells said in an interview.

Meanwhile, the second-largest U.S. oil producer, Chevron Corp., reported fourth-quarter net income of $3.24 billion.  The company said it had adjusted earnings of $2.06 per share, the latter short of the Street’s $2.19.

Revenue was $52.23 billion in the period, topping Wall Street forecasts of $46.96 billion.

For the year, the company reported a profit of $17.66 billion, or $9.72 per share. Revenue was reported as $202.79 billion.

CEO Mike Wirth said the downtrend in refining margins is set to continue this year.

Both Exxon and Chevron closed the day down sharply.

--Viral reports that a Chinese company DeepSeek had recreated OpenAI’s artificial intelligence prowess for less than $6 million ($5.6 million, to be exact), a fraction of the billions U.S. tech companies spend ($100 million to $1 billion, as cited by Dario Amodei, CEO of AI developer Anthropic), slammed markets on Monday, with Nvidia tumbling 17%, wiping out nearly $600 billion from the company’s market cap, the largest single-day loss in market history. The tech-heavy Nasdaq sank 3.1%. 

DeepSeek topped iPhone download charts over the weekend with users praising its transparency in explaining how it answers prompts.

Users of DeepSeek’s latest flagship model, called V3 and released in December, have noticed that it refuses to answer sensitive political questions about China and leader Xi Jinping.  In some cases, the product gives responses in line with Beijing’s official propaganda rather than including the perspective of government critics, as ChatGPT does.

At the same time, AI models from the company zoomed to the global top 10 in performance, according to a popular ranking, suggesting Washington’s export curbs are having difficulty blocking rapid advances in China.

DeepSeek said its AI model performed on par with OpenAI’s reasoning model, using less advanced chips, but the cost given was totally misleading and false.

An Nvidia spokesperson did call DeepSeek “an excellent AI advancement,” noting that “inference requires significant numbers of Nvidia GPUs and high-performance networking.”

DeepSeek introduced R1, a specialized model designed for complex problem-solving.

“DeepSeek’s R1 is one of the most amazing and impressive breakthroughs I’ve ever seen,” said Marc Andreesen, the Silicon Valley venture capitalist who has been advising President Trump, in an X post on Friday.  Andreesen also called it a “Sputnik moment,” referring to the Soviet Union’s 1957 launch of the first artificial satellite, named Sputnik, which shook the U.S.’s view of its technological dominance over its geopolitical rival.

China has announced it would spend $137 billion on AI over the next few years, debunking the idea that its technology is cheaper to produce.  China also has a key challenge that the U.S. doesn’t: DeepSeek founder Liang Wenfeng reportedly said American export restrictions on AI GPUs remained a “bottleneck,” according to the Wall Street Journal.

Specialists said DeepSeek’s technology still trails that of OpenAI and Google.  But it is a close rival despite using fewer and less-advanced chips (so it says) and in some cases skipping steps that U.S. developers considered essential.

DeepSeek said R1 and V3 both performed better than or close to leading Western models.  As of Saturday, the two models were ranked in the top 10 on Chatbot Arena, a platform hosted by University of California, Berkeley, researchers that rates chatbot performance. A Google Gemini model was in the top spot, while DeepSeek bested Anthropic’s Claude and Grok from Elon Musk’s xAI.

Microsoft and OpenAI are investigating whether data output from OpenAI’s technology was obtained in an unauthorized manner by a group linked to DeepSeek, according to reporting from Bloomberg.

Microsoft’s security researchers in the fall observed individuals they believe may be linked to DeepSeek exfiltrating a large amount of data using the OpenAI application programming interface, or API, said the people, who asked not to be identified because the matter is confidential. Software developers can pay for a license to use the API to integrate OpenAI’s proprietary artificial intelligence models into their own applications.

Such activity could violate OpenAI’s terms of service or could indicate the group acted to remove OpenAI’s restrictions on how much data they could obtain, the people said.

OpenAI has promised to work closely with the U.S. government to prevent rivals from taking its technology.

According to CNBC, the U.S. Navy has sent an email to its staff warning them not to use the DeepSeek app due to “potential security and ethical concerns associated with the model’s origin and usage.”

Speaking on Fox News, the recently appointed “White House AI and crypto czar,” David Sacks, also suggested that DeepSeek may have used the models developed by OpenAI to get better.

“I think one of the things you’re going to see over the next few months is our leading AI companies taking steps to try and prevent distillation... that would definitely slow down some of these copycat models.”

OpenAI echoed this in a later statement that said Chinese and other companies are “constantly trying to distill the models of leading U.S. AI companies.”

U.S. officials are also probing whether DeepSeek bought advanced Nvidia Corp. semiconductors through third parties in Singapore, circumventing U.S. restrictions on sales of chips used for AI tasks, people familiar with the matter told Bloomberg.

DeepSeek went quiet as it entered “holiday mode” for Lunar New Year.

China’s state broadcaster CCTV reported a massive cyberattack targeting DeepSeek originated in the U.S.  The attack started on January 3 and reached a peak on Monday and Tuesday with a massive brute-force attack from U.S. IP addresses, Yuyuan Tantian, a social media account affiliated with CCTV, said on Wednesday.

Suddenly, a rally predicated largely on U.S. AI dominance turned into a question of whether the hundreds of billions in AI investments* would ever lead to profits large enough to justify the rich valuations afforded the Megacap stocks.

*Such as the “Stargate Project” involving OpenAI, SoftBank and Oracle that aims to spend as much as $500 billion on AI infrastructure.

Separately, OpenAI is in early talks to raise up to $40 billion in a funding round that would value the ChatGPT maker at $340 billion.  SoftBank would lead the round and is in discussions to invest between $15 billion and $25 billion, the Wall Street Journal reported Wednesday.

OpenAI was last valued at $157 billion in October, when it raised $6.6 billion.  The funding will be used to help OpenAI fulfill its roughly $18 billion commitment to Stargate.

But back to Nvidia, the next test then came after the market closed on Wednesday with earnings reports from Microsoft and Meta Platforms.  Microsoft has already committed to $80 billion in spending on AI-enabled data centers in its current fiscal year, and Meta has said it plans to invest $65 billion in the technology in 2025.

--Wednesday, Nvidia shares slid another 4% after Bloomberg reported that Trump administration officials are “exploring additional curbs” on Nvidia’s chip sales to China.  The company said it was “ready to work with the Administration as it pursues its own approach to AI.”

--Microsoft’s flagship cloud computing business experienced a slowdown in growth last year, as constraints on data center supply prevented it from meeting booming demand from AI companies.

Revenue for the tech giant’s Azure cloud computing division grew 31%, at the low end of the company’s projections.  Analysts were expecting it to grow 32%, after a 34% pace in the prior quarter.

The company’s overall revenue rose 12% to $69.6 billion with net income up 10% to $24.1 billion, $3.23 a share.  Both revenue and EPS were ahead of analysts’ expectations.

Capital expenditures including leases, most of which goes toward building AI data centers, totaled $22.6 billion last quarter, up from $20 billion in the September quarter.  Microsoft previously said it plans to spend $80 billion on capital in the current fiscal year ending in June, with most going to AI infrastructure.  Last fiscal year it spent $55.7 billion.

The company said revenue from its AI businesses is now more than $13 billion when extrapolated on an annual basis.  AI services contributed 13 percentage points of Azure’s revenue growth.

Microsoft’s close partner OpenAI announced the above-mentioned Stargate venture.

In addition to selling cloud computing to OpenAI and other developers, Microsoft has been investing in its Copilot AI assistant for businesses and consumers, for which it doesn’t break out revenue.  Analysts are hoping that by later this year, the company will start showing more significant revenue from Copilot.

Guidance was tepid and the shares fell 5%, after a 2% tumble Monday on the DeepSeek news.

--Meta Platforms Inc. reported fourth quarter earnings that beat expectations, but the company forecasted a slowdown in revenue growth in the current quarter and said expenses in 2025 would grow faster than last year.

The social media giant reported it earned $20.83 billion, or $8.02 per share, in the October-December quarter, up 49% from $14.02 billion, or $5.33 per share in the same period a year ago.  Revenue grew 21% to $48.4 billion, up from $40.11 billion. 

Analysts expected earnings of $6.76 per share on revenue of $47 billion.

For the full year, the company’s net income totaled $62.4 billion, up 59% from the $39.1 billion seen last year.

In the first quarter, however, the company sees revenue coming in between $39.5 billion-$41.8 billion, reflecting 8%-15% growth from the prior year period.  In the fourth quarter, revenue rose 21% over last year. For the full year 2024, revenue totaled $164.5 billion, up 22% over last year.

Meta also declined to offer a full-year revenue forecast, saying “we expect the investments we are making in our core business this year will give us an opportunity to continue delivering strong revenue growth throughout 2025.”

Wednesday’s report came less than a week after CEO Mark Zuckerberg announced Meta plans to spend between $60 billion and $65 billion on AI infrastructure projects this year, including the construction of a data center that the executive says is so large its footprint would cover a large chunk of Manhattan.

The company had previously projected $38 to $40 billion in capital expenditures in 2024, up from prior estimates of $37 billion to $40 billion.

In its release Wednesday, CFO Susan Li said expenses for 2025 should be in a range of $114 billion-$119 billion, up from $95.1 billion in 2024.

“We expect the single largest driver of expense growth in 2025 to be infrastructure costs, driven by higher operating expenses and depreciation,” Li said.

“We continue to make good progress on AI, glasses, and the future of social media,” said Zuckerberg in a statement.

For the current quarter, Meta said it expects revenue of $39.5 billion to $41.8 billion, with analysts expecting revenue at the high end of that range - $41.68 billion, a sign that the company’s bets on pricey AI-powered tools were struggling to attract additional digital ad dollars to its social media platforms.

Daily active people (DAP), a metric Meta uses to track unique users who open any one of its apps in a day, rose about 5% from a year earlier to 3.5 billion.

The shares rose 3%.

--Apple Inc. reported surprise sales declines for both the iPhone and its China business during the pivotal holiday season, marring an otherwise strong quarter for the world’s most valuable company.

Revenue from China plunged 11% to $18.5 billion in the fiscal first quarter, which ended Dec. 28, Apple said in a statement after the market closed on Thursday.  Analysts had anticipated a gain to $21.6 billion.  Sales of the iPhone, meanwhile, dropped less than 1% to $69.1 billion, with the Street at $71 billion.

The results renewed concerns about China, one of Apple’s biggest markets, where it’s struggled to fend off competition from local brands.  The poor performance for overall iPhone sales also suggested that the company didn’t get much of a lift from the rollout of a new AI platform, Apple Intelligence.

Total revenue rose 4% to $124.3 billion in the period, helped by growth in services revenue.

Profit rose to $2.40 a share, beating the average estimate of $2.35. Like the revenue figure, that number was a record high. Apple didn’t provide formal guidance for the current quarter.

The latest iPhones aren’t markedly different than the prior models – a factor that may have led some customers to hold off on upgrades.  But Apple is planning a larger iPhone refresh this year.

The services division, which includes the App Store and Apple Music, was a bright spot, bringing in an all-time record of $26.3 billion and growing 14%.  Wall Street had been looking for $26.1 billion.

Apple shares rose 4% on the earnings and profit beat.

--Boeing on Tuesday reported an annual loss of $11.83 billion, its largest since 2020, as it grappled with problems at its commercial and defense units and the fallout from the strike by West Coast factory workers.

The loss illustrates the challenges faced by CEO Kelly Ortberg in turning around the planemaker as it cedes more ground to Airbus in the delivery race and comes under the crosshairs of regulators and customers following a series of missteps.

Ortberg, who took the reins in August, said the company was making progress in restoring stability to its production lines after the mid-air accident in 2024 raised real concerns about the safety of its jets.

The company reported a loss of $3.86 billion in the fourth quarter due to issues in its defense programs, primarily.

Revenue for the December quarter fell 31% to $15.24 billion from a year ago. Cash burn was $14.3 billion in 2024, compared with a positive cash flow of $4.43 billion in 2023.

Ortberg reiterated the company’s four-part plan to turn the business around including undertaking a “multi-year journey” to fix Boeing’s culture, “perhaps the most important change we need to make.”

After record profits in the 2010s, Boeing has bled more than $20 billion since 2019 after the two fatal crashes of its best-selling 737 MAX jet triggered production quality and safety concerns and worries that it had misled regulators during the plane’s certification process.

The pandemic hurt and then you had last year’s mid-air panel blowout on a nearly new 737 MAX.

The company’s Defense, Space & Security business lost $5.41 billion in 2024.

Ortberg said BA has made progress with its supply chain and has returned to an output rate of five 787 jets per month at the end of 2024, despite delays in areas like seats.

But Ortberg was guarded in his message about the status of solving problems with anti-icing systems on some of the 737 models.

--Related to the above, Irish budget airline behemoth Ryanair said it expects to fly fewer passengers than hoped in fiscal 2026, cutting its passenger growth target yet again due to Boeing’s plane delivery delays.

The company cut its target for a second time to 206 million passengers. It had trimmed its passenger growth guidance in early November to 210 million from 215 million and warned at the time that the risk of further delivery delays from Boeing remained high.

Ryanair said it expects to fly almost 200 million passengers in fiscal 2025.

--JetBlue Airways Corp. on Tuesday reported a loss of $44 million in its fourth quarter, an adjusted loss of 21 cents per share, which beat expectations.

The airline posted revenue of $2.28 billion in the period, which also beat consensus.  For the year, the company reported a loss of $795 million, or $2.30 per share, with revenue of $9.28 billion.

But the stock fell 15% as JetBlue’s projected first-quarter unit revenue was well below what analysts are forecasting.  The carrier also expects to operate fewer flights in the first three months of the year, guiding for capacity to fall between 2% and 5% year-over-year.

--Southwest Airlines reported record fourth-quarter revenue on Thursday, but investors didn’t appear too impressed by other parts of its earning report.

South reported fourth-quarter earnings of 56 cents a share, as revenue rose 3.3% from a year ago to $6.93 billion – a record for the final three months of the year.

But the Street was expecting even more revenue: Analysts had forecast earnings of 46 cents on revenue of $6.96 billion.

The Dallas-based airline’s unit revenue guidance also looked a little light.

--I noted last time that investigators looking into last month’s fatal Jeju Air crash in South Korea that killed 179 people found bird remnants in both engines, but the transport ministry’s preliminary report this week said it remains unclear how much damage each sustained before the plane crashed into a concrete-reinforced embankment.

The investigation is also attempting to find out how pilots handled the cockpit emergency following the bird strike, and whether pilots inadvertently shut down the wrong engine after at least one suffered significant damage.  Or birds may have taken out both engines.

In the coming months, investigators will tear down the engines to examine the components.

--TSA checkpoint numbers vs. 2024

1/30...137 percent of 2024 levels
1/29...86
1/28...71
1/27...118
1/26...101
1/25...80
1/24...124
1/23...134

--General Motors continued its strong run of quarterly performance last year on Tuesday, with full-year profit that came in at the high end of its range and upbeat forward guidance.

But challenges remain, such as with its electric vehicle business under threat from new White House regulations.

For the fourth quarter, GM posted revenue of $47.70 billion, compared with the $44.46 billion the Street expected.  That’s 11% more than the $42.98 billion the company reported a year ago.

Adjusted earnings per share of $1.92 were vs. consensus of $1.83.  Profit was $2.5 billion, up 42.8% from a year ago.  For full-year 2024, GM earned $14.9 billion, adjusted.

GM sees 2025 profit coming in at a range of $13.7 billion to $15.7 billion, with adjusted EPS of $11.00 to $12.00 for the year.

The automaker credited its better results on improvements in its EV business and China operations.

Earlier in January, GM reported that Q4 sales jumped 21% from a year ago and were up 4% in 2024 to 2.7 million vehicles.  It said full-size pickup sales were up for the fifth straight year, hitting their highest level since 2007. 

But the company sees headwinds in North America, including a potential decline in pricing this year.

--Tesla reported fourth-quarter profit rose 3% on growth in its energy and serve businesses, helping it regain some momentum in the final months of what has been a roller coaster year for the world’s most valuable automaker.

Net income was $2.5 billion for the October-December period.  The company reported earnings per share of 73 cents, missing the Street’s forecast of 77 cents.

Revenue rose by 2% to $25.7 billion overall but slipped for its automotive business. Tesla leaned heavily on promotional deals in the fourth quarter to drive a rebound in sales in the last three months, resulting in an 8% decline in automotive revenue for the quarter.

For the full year, Tesla’s global vehicle deliveries fell 1% over 2023, its first annual decline in more than a decade.

Tesla’s energy business, which includes residential and industrial battery products, also stood out, more than doubling revenue to $3 billion in the fourth quarter and helping to offset a decline in selling prices for many of its core vehicle models.

Overall, Tesla’s closely watched operating margin was 6.2%, down from 8.2% a year earlier.  The gross profit margin of 16.3% in Q4 was lower than estimates of 19%.  Tesla posted a profit margin of 19.8% in the third quarter.

President Trump’s policy objectives, while backed by Elon Musk, present some obstacles for Tesla’s car business. The president has pledged to roll back Biden-era subsidies for EVs, including a $7,500 tax consumer tax credit that has helped boost Tesla’s sales over the years.

Trump is also threatening to impose a 25% tariff on Mexican and Canadian imports as soon as Saturday. While Tesla builds most cars it sells in the U.S. in Texas and California, it is reliant on suppliers in the two neighboring countries for parts. For instance, 20% to 25% of parts that are used in U.S.-built cars come from Mexico, according to federal data.

But Tesla stock rose because of Musk’s usual bullish comments on the conference call with investors and analysts, reiterating plans for a low-cost EV launch later this year as well as the first fully-autonomous Tesla cars on the road by this spring.

“We’re setting up for what I think will be an epic 2026 and a ridiculous 2027 and 2028...ridiculously good,” Musk said.

“Very few people understand the value of self-driving and our ability to monetize the fleet,” he added.  “Some of these things I’ve said for quite a long time, and I know people have said, ‘Well, Elon, the boy who cried wolf several times.’  But I’m telling you, there’s a damn wolf this time and you can drive it.”

Tesla also said it expects to see a return to growth for its auto business, although Musk did not repeat his earlier estimates of a 20% to 25% gain in deliveries.

--IBM surpassed analysts’ estimates for fourth-quarter profit on Wednesday, driven by demand in its high-margin software unit as businesses ramped up IT spending, sending its shares soaring 10%.

The company’s software segment recorded its biggest revenue jump in five years, as customers prioritized spending on cloud infrastructure amid a rush to adopt the data-intensive generative artificial intelligence technology.

IBM’s AI Book of Business – a combination of bookings and actual sales across various products – stood at more than $5 billion inception-to-date, up about $2 billion from the third quarter.

The company made its “Granite” family of AI models open-source in May, in contrast to rivals such as Microsoft, which charge for access to their models.

IBM’s AI book is dominated by consulting, which currently makes up about 80% of it.

Revenue from the consulting segment fell about 2% to $5.2 billion in the quarter, more than analysts’ expectations of a 1% drop.

Total revenue was relatively flat at $17.55 billion for the quarter and largely in line with the Street’s forecasts.

Adjusted earnings per share of $3.92 for the quarter ended December, compared with consensus of $3.75.

--Dutch company ASML’s report Wednesday that orders for its lithography machines – which are crucial for making advanced chips – were above expectations, helped lead European stocks to record highs.  The company reported bookings of 7.09 billion euros ($7.39 billion).

“The growth in artificial intelligence is the key driver for growth in our industry,” ASML CEO Christophe Fouquet said in a statement.

ASML’s biggest customer, TSMC, manufactures most chips designed by Nvidia and the software firms.

But some analysts caution this is old news and what if we are in a new, DeepSeek era, which would then call into question whether tech giants will need to follow through on plans for huge investments in AI chips.

--Intel announced its fourth-quarter earnings on Thursday, beating estimates on the top and bottom lines but falling short on Q1 guidance. Still, the company said its nascent foundry business is expected to produce meaningful external revenue by 2027.  The shares rose a bit in response.

The report is Intel’s first since it ousted CEO Pat Gelsinger over frustrations related to his enormous turnaround plan for the company.

Intel is currently led by co-CEOS David Zinsner and Michelle Johnston Holhaus. The company is searching for a permanent CEO to revitalize the storied chipmaker.

Intel, however, said it expects revenue between $11.7 billion and $12.7 billion in the current quarter.  Analysts were looking for $12.85 billion.

The company is working to build out new facilities to research and construct chips across the U.S., but the company is dealing with a relatively flat PC market despite promises that AI PCs would help buoy the space in 2024.

For the quarter, Intel reported EPS of $0.13 on revenue of $14.3 billion.  Analysts were at $0.12 on revenue of $13.8 billion.  The company EPS of $0.54 and $15.4 billion in revenue in the same quarter last year.

--Caterpillar warned of a slight sales drop in 2025 as dealers scale back purchase of equipment due to weak demand driven by high borrowing costs and persistent inflation, sending its shares down on Thursday.

The company, which is viewed as a bellwether for global economic growth, also said it expects adjusted operating profit margin in the first quarter to be lower than a year ago.

Contractors are adopting a wait-and-see approach to buying new machinery against the backdrop of growing uncertainty over government spending under the Trump administration.

The initial surge in demand from government projects under former President Joe Biden’s 2021 infrastructure law, a $1 trillion push to upgrade roads and bridges, has also tapered off.

Sales in CAT’s construction industries segment fell nearly 8% to $6 billion.  China’s struggling real estate market has also weighed on infrastructure spending, leading to a decline in its sales in the region over the past quarters.

And higher interest rates have compelled dealers to scale back purchases to better align with demand trends.

For the fourth quarter, Caterpillar reported an adjusted profit of $5.14 per share, beating expectations of $5.02.  Sales and revenue for the quarter fell 5% to $16.22 billion, compared with the Street’s forecast of $16.39 billion.

--United Parcel Service shares fell sharply Thursday after the company forecast downbeat 2025 revenue as it cuts back deliveries for its largest customer, Amazon.com, and grapples with stubbornly soft demand for lucrative overnight service and commercial shipments.

Shares in the world’s largest parcel delivery firm suffered after the company said it had reached an agreement to cut transported Amazon volumes by more than 50% by the second half of 2026.

The move surprised some analysts.  UPS and rival FedEx are grappling with how to fill their networks and shelter profits from a shift toward lower-margin deliveries.

UPS forecast 2025 revenue of $89 billion, compared with analysts’ average estimate of $94.88 billion.  It also forecast full-year consolidated operating margin at 10.8%, an increase from the 9.8% it reported for 2024.

Fourth-quarter revenue of $25.3 billion missed estimates of $25.42 billion.  Adjusted profit of $2.75 per share for the quarter ended Dec. 31, beat estimates of $2.53.  But it’s about 2025, not Q4 2024.

--Starbucks shares rose sharply Wednesday even as earnings fell in the December quarter compared with a year earlier and same-store sales continued to decline, but results were still better than expected.  The coffee chain is moving quickly and seeing “a positive response” to its turnaround efforts, CEO Brian Niccol said.

Quarterly net revenue of $9.4 billion and net income of $781 million were above expectations.  Earnings fell 23% to 69 cents a share, but also beat expectations.  Starbucks café visits fell 2.9% in the quarter, and U.S. transactions fell 8%, according to Placer.ai.

U.S. and global same-store sales fell 4% from a year ago, including in China, the fourth straight quarterly decline.  As it upgrades existing stores, Starbucks also opened 377 new ones.

As part of Niccol’s efforts to become a more welcoming coffeehouse, Starbucks brought back the condiment bar, handwritten names on cups, more ceramic mugs, and more comfortable seating.  And as previously noted, the company changed its code of conduct to only allow paid guests to use its bathrooms.

Starbucks said that its morning business improved during the most recent quarter, and many lapsed customers returned to its cafes. 

Niccol also said he was working to simplify operations and aimed to trim food and drink options by 30% by the end of the company’s fiscal year.  And he said he expects to announce layoffs of corporate employees by March.

--Royal Caribbean shares surged over 10% Tuesday to an all-time high as the cruise operator forecast a profit for 2025, above Wall Street expectations, betting on higher cruise bookings to private destinations as well as premium voyages to the Mediterranean and the Alaskan region.

The popularity of sea-based vacations has surged lately with cruise operators investing millions of dollars in introducing new ships and private-destination travel itineraries packed with excursions, beaches, bars and restaurants.

Analysts noted that Royal Caribbean in particular has seen strong demand for CocoCay, an amusement park-like private destination in The Bahamas.

“2025 is shaping up to be another great year, with expected adjusted earnings growth of 23%,” Royal Caribbean Group CEO Jason Liberty said.

The company expects full-year adjusted EPS of $14.35 to $14.65, compared with consensus of $14.41.

Fourth-quarter revenue rose to $3.76 billion from $3.33 billion a year earlier.  RCL posted quarterly adjusted EPS of $1.63, topping estimates of $1.50.

--After I posted my quarterly housing update over the weekend on my “Wall Street History” link, using the National Association of Realtor’s existing-home price data, my friend Jimbo, who hails from next door Chatham, NJ, a wealthy community, noted his daughter and son-in-law put their house on the market in Chatham and “received 16 offers, 15 above the asking price.”  They are now under contract with an older couple who offered 18% above ask and waived all inspections.  There were higher offers, but price and limited contingencies were attractive for Emily and Grant.  I know the street and the location is fantastic...can walk to everything...schools, a good downtown with ample interesting restaurants, and the train station into New York, aka Gotham.

But it also points to the nationwide issue that is driving prices higher despite 7% mortgage rates, that being a severe lack of inventory in so many regions of the country.

--AccuWeather, using its proprietary model, now estimates the total expected damage and economic loss from the Los Angeles fires will be between $250 billion and $275 billion.  That includes the costs of damage, loss of life, healthcare, business disruptions and other economic impacts.  Total ‘insured losses’ have been estimated at $30 billion, minimum.

--New York State’s coffers are starting to get a boost from marijuana sales after a slow start.

The Empire State is expected to generate $161.8 million in tax revenues from its legal weed business for the fiscal year ending March 31 – or four times what it raked in last year.

Gov. Kathy Hochul’s budget released last week also projects generating $248 million in revenue from the state-licensed cannabis industry for the next fiscal year running from April 1 to March 31, 2026.

That’s not a small amount.

On the other hand, New York’s flailing Metropolitan Transportation Authority (MTA) estimates that deadbeat drivers racked up $5.1 billion in unpaid MTA tolls and violations over four years – a number likely sent skyrocketing since “cashless” systems replaced the old payment booths, records reveal.

The MTA estimated total uncollected “toll violations” at more than $1.4 billion in 2024 alone.

And the annual loss in toll revenues could eventually surpass $2 billion in upcoming years when including non-payment of tolls for the new $9 congestion pricing toll to enter Manhattan south of 60th Street, the MTA estimates.

--Some Super Bowl ad spots are reportedly selling for a record $8 million and even $8 million+ for 30 seconds.  Fox Sports declined to comment on the specific price tag for 30 seconds.  But in an earnings call in November, Fox CEO Lachlan Murdoch said ad space had sold out at “record pricing.”  Last year, a 30-second spot went for around a reported $7 million.

Why would advertisers pay such a price?  Because the live viewing audience is so large.  Last year, an estimated 123.7 million tuned into the game, according to Nielsen.

Foreign Affairs

Russia-Ukraine: President Volodymyr Zelensky appointed a new commander in Ukraine’s east, after Russia captured another town.  Maj. Gen. Mykhailo Drapatyi, commander of ground forces, will take over for Brig. Gen. Andriy Hnatov, following an announcement that Ukrainian forces had withdrawn from Velyka Novosilka in the country’s eastern region of Donetsk.

It’s the third time in a year that Ukraine has replaced the commander of forces in the eastern hub of Pokrovsk.

In September, Zelensky said that the winter months would prove critical for Ukraine. “I believe that this winter is a turning point, and it can lead to the rapid de-occupation of Ukraine,” he said.  “If we were a little stronger with weapons we would de-occupy faster.”

Editorial / The Economist

“The final battle for the small Donbas town of Velyka Novosilka dragged on for six days, though the outcome was obvious long before. Things became critical in the new year, when Russian troops took over villages immediately to its northeast and west, pinching the Ukrainian defenders on three sides.  By Thursday 23rd, the narrow corridor to what has become a nearly-isolated pocket had become impassable. The order to retreat came as soon as a mist descended. It was a nightmarish task that had to be completed on foot, under drone-filled skies, and across a river. The evidence of triumphant Russia propaganda channels suggests that many failed to make it.

“Russia’s small victory in Velyka Novosilka (population just 5,000 before the war) followed a familiar pattern: relentless infantry assaults, devastating casualties, collapsing Ukrainian defenses, and their eventual retreat.  The immediate focus for the units that had been fighting there will now probably shift back to Pokrovsk to the north, a much-bigger logistical hub that Russia has been attacking at various intensities for the past six months. The fighting there has already prompted the Ukrainians to shut a crucial coking-coal mine – one that previously provided half the needs of the domestic metallurgy industry.  Russian forces are also advancing nearby towards the site of useful lithium-ore deposits....

“The modern battlefield – dominated by drones that spy, stalk and strike – is rapidly changing the nature of the fighting.  In Velyka Novosilka, for example, armored vehicles played a minimal role.  ‘One of our tanks crept out near the front lines,’ says Captain Ivan Sekach, an officer with Ukraine’s 110th brigade defending the town.  ‘Ten drones attacked, setting it alight almost immediately.’  The fighting instead was done by infantry – small Russian groups of three, four, five, sent forward in waves.  Most met a swift and bloody end. But some managed to establish new positions and move the fight closer, forcing the Ukrainians to retreat.

“The Russian tactics are not dynamic, but are causing Ukraine no end of bother.  Put simply, Russia has the infantry and Ukraine does not.  Issues with mobilization and desertion have hit Ukraine’s reserves hard.  ‘We struggle to replace our battlefield losses,’ says Colonel Pavlo Fedosenko, the commander of a Ukrainian tactical grouping in the Donbas.  ‘They might throw a battalion’s worth of soldiers at a position we’ve manned with four or five soldiers.’  The brigades that make up the Donbas front line are consistently understaffed, under pressure, and cracking. The front line keeps creaking back....

“The world’s focus has shifted to negotiations that have yet to happen; on the contradictory signals from the Trump administration that one day look positive for Ukraine, and the next day less so.  For those doing the fighting, the agenda is less abstract.  As long as the front line keeps moving, Mr. Putin appears to have little reason to compromise.  The Russians will not run out of weapons any time soon, says the intelligence officer Cherniak.  ‘They have at least a year, possibly two, to continue fighting as they have been.’”

George Will / Washington Post

“All wars end.  This one will, either with negotiations or with a Ukrainian collapse presaging another war.  Michael McFaul, former ambassador to Russia (2012-2014), now at Stanford and the Hoover Institution, correctly says (in Foreign Affairs) that Putin will negotiate seriously only when his forces no longer have the capacity to seize more territory. McFaul thinks that for the negotiations to achieve more than an interval between Putin aggressions, Ukraine needs ‘the credible deterrence that only NATO can offer.’

“NATO membership might be unattainable.  More military muscle for Ukraine is not.  Aid sufficient to produce a durable stalemate, and unendurable costs for Putin’s regime, is the way for the United States and its NATO allies to avoid being penny wise and pound foolish.

“Success, such as it might be in Ukraine, will be unsatisfying but much less costly than failure to achieve it.  And defeat in Ukraine is a choice.”

At week’s end, Russian forces were continuing to tighten the noose around Pokrovsk, encircling it, and its fall will put Russia in a strong position to mount attacks in several directions in the east and increase pressure on Kyiv at a critical juncture in the war.

Out of a pre-war population of 60,000, 7,000 residents remain in Pokrovsk, with Russian troops within artillery and drone range of a crucial highway that runs east to west along the entirety of Ukraine.  Moscow’s forces have also reached the main rail line into the city from the important logistical hub of Dnipro.

--Last weekend, Ukraine launched another attack on three areas of Russia, including the Ryazan region, home to one of the country’s largest oil refineries, according to Moscow officials.

Russia’s Defense Ministry said a total of 15 unmanned aircraft were shot down in the regions of Ryazan, Kursk and Belgorod.

Unverified videos from local residents in Telegram channels show that the Ryazan oil refinery might have been targeted for the second time in three days.  One video showed a spectacular explosion at Ryazan.

And then Wednesday, Ukraine says its forces successfully hit an oil refinery in the Russian town of Kstovo, around 800km (500 miles) from the front lines in eastern Ukraine.

Four drones hit a Lukoil company depot, Ukrainian media said, adding that the facility suffered significant damage.

The regional governor said drone debris had fallen over the industrial zone.

Separately, the governor of the region of Smolensk said on Telegram that a “massive” drone attack against “civilian infrastructure” had occurred in his region, although no casualties were immediately reported.

The governor, Vasily Anokhin, said a drone had been shot down when attempting to hit a nuclear power facility, which was not independently verified.

Russia claims it brought down more than 100 Ukrainian drones in the strike on Kstovo, Smolensk and also Belgorod.  It was one of the largest Ukrainian operations of its kind during the war.

--Thursday, a Russian drone attack on a residential block killed nine people, including three elderly couples, in the eastern Ukrainian city of Sumy, officials said.

“This is a terrible tragedy, a terrible Russian crime.  It is very important that the world does not pause in putting pressure on Russia for this terror,” President Zelensky wrote on social media.

--South Korea’s military announced last weekend that North Korea is on the brink of sending more troops to Russia.  An assessment from South Korea’s spy agency says that North Korea has lost 300 troops and seen 2,700 wounded of the 11,000 sent to Russia.]

But the New York Times reported today that North Korean soldiers have been pulled off the front lines after suffering heavy casualties, according to Ukrainian and U.S. officials.  Apparently, they haven’t been seen at the front for about two weeks.

While Ukrainian generals and troops have described the North Koreans as fierce warriors, the Times reports “disorganization in their ranks and a lack of cohesion with Russian units have quickly driven up casualties, a Ukrainian official said.”

--NATO dispatched ships to another damaged undersea cable in the Baltic Sea on Sunday. There, they found three Russian ships, and all three “are now being investigated as part of a probe into suspected sabotage of the fiber optic cable,” the Wall Street Journal reported Monday.

NATO announced a new Baltic observation mission for these kinds of scenarios just last month.

One of the Russian ships was detained Sunday by the Swedes for further investigation, the Journal reports. The ship’s owner blamed bad weather and said his crew is innocent.  The owner of one of the other ships agreed to have it towed into port for further inquiry.

But a Barbados-registered tanker known as Pskov did not comply, and its “captain has declined requests to halt its course,” vowing to continue on to its destination in St. Petersburg.  The ship is under U.S. sanctions for allegedly transporting Russian oil and gas.

Israel-Gaza-Hezbollah: Tens of thousands of Palestinians returned to the most heavily destroyed part of Gaza on Monday as Israel lifted its closure of the north for the first time since the early weeks of the war with Hamas. In accordance with the ceasefire, massive crowds of people on foot stretched along a main highway running next to the coast in a stunning reversal of the mass exodus from the north at the start of the war.  Gazans who have been living in tent camps and schools-turned-shelters for more than a year are eager to return to their homes – though they are likely destroyed.

More than 375,000 people had returned to northern Gaza since Monday.

--Israel said eight of the remaining 26 hostages due to be released by Hamas during the first phase of the ceasefire are dead.

Government spokesman David Mencer told reporters that Israel had received a list from Hamas that provided information on the status of the hostages.

“The list from Hamas matches Israel’s intelligence, so I can share with you that... eight have been killed by Hamas,” he said, without naming them.  “The families have been informed of the situation of their relatives.”

Seven women have already been freed alive (four last Saturday) in exchange for more than 290 Palestinian prisoners held in Israeli jails since the ceasefire began on January 19.

Sunday night, Prime Minister Netanyahu’s office announced Hamas had agreed to release three more hostages on Thursday.

And then Thursday, eight were released, including five Thai nationals, in exchange for another 100 Palestinian prisoners, including 30 serving life sentences for involvement in deadly attacks against Israelis.

But Hamas has been turning the release of hostages into a spectacle in an attempt to send the message it is still in charge in Gaza.

More hostages are to be released on Saturday.

--Israel and Lebanon agreed to extend their ceasefire until Feb. 18 to give Israeli troops more time to withdraw.

Last Sunday, at least 22 people were killed in southern Lebanon and more than 100 injured, according to Lebanese authorities, as hundreds of residents, some carrying Hezbollah flags, attempted to return to villages despite warnings by the Israeli army to stay out of parts of the country where its soldiers are still deployed.  The Israeli military said it fired warning shots and apprehended some suspects.

--President Trump said he would like to see Jordan and Egypt house Palestinian refugees from Gaza in order to “just clean out” the enclave he described as a “demolition site.”  Speaking to reporters aboard Air Force One on Saturday, Trump said: “You’re talking about probably a million and a half people, and we just clean out that whole thing and say, ‘You know, it’s over.’”

Trump said the relocation of the population could be temporary or long-term. 

But neither Jordan nor Egypt are willing to take on more refugees than they already have.

--Wednesday, Israeli Defense Minister Israel Katz said Israel has “declared war on Palestinian terrorism in Judea and Samaria,” referring to the West Bank.  “After the operation is completed, the [Israel Defense Forces] will remain in the camp to ensure that terrorism does not return,” he added, referring to the refugee camp in Jenin.

Syria: Russian officials arrived in Damascus on Tuesday for the first time since the collapse of the Bashar Assad government last month, as Russia looks to negotiate the future of its military bases in Syria with the country’s new leadership.

Among those in the delegation were deputy foreign minister Mikhail Bogdanov.

In an interview last month, Ahmed al-Shara, the leader of the rebel coalition that ousted Assad, called Russia “an important country” and said he did not want Russia to leave Syria “in the way that some wish.”

“We don’t want Russia to exit Syria in a way that undermines its relationship with our country,” al-Shara said, noting that Syria depended on Russia for all its weapons and to manage many of its power plants.

But it’s really all about Russia’s naval base at Tartus and the Khmeimim air base near Latakia.  Having to close the bases would be a serious blow.

This is a confusing topic, as other reports earlier in the month had the new government in Damascus booting out Russia, but al-Shara never commented on those reports.

Wednesday, al-Sharra then abolished the country’s constitution and declared himself president during a meeting of armed factions in Damascus.

The former rebel leader will “assume the duties of the Presidency of the Syrian Arab Republic and represent it in international forums,” commander Hassan Abdelghani said, according to Syrian state news agency SANA.

Abdelghani said Sharaa will be president during “a transitional phase,” without clarifying further.

Syria’s parliament was also dissolved, Abdelghani said, adding that the president will form a temporary legislative council until a new constitution enters into effect. He gave no time frame for that to occur.

Abdelghani said Bashar Assad’s Baath Party will be dissolved.

China: Secretary of State Marco Rubio held a phone call with his Chinese counterpart Wang Yi last Friday, affirming Washington does not back Taiwan independence, according to China’s foreign ministry, a detail omitted from the American side’s readout.

“The United States does not support ‘Taiwan independence’ and hopes that the Taiwan issue will be peacefully resolved in a way accepted by both sides of the Taiwan Strait,” Rubio said in a call that he requested, according to Beijing’s foreign ministry.

However, in the State Department’s telling, Rubio “stressed the United States’ commitment to our allies in the region and serious concern over China’s coercive actions against Taiwan and in the South China Sea.”

South Korea: Impeached and arrested President Yoon Suk Yeol was formally indicted on Sunday on charges of leading an insurrection last month when he briefly imposed martial law.

Yoon’s indictment means that his trial is likely to start soon.  It follows the indictments of a former defense minister and several military generals and police chiefs, all of whom face criminal charges of helping Yoon to commit the same crime.

He is the first president in South Korean history to face criminal charges while still in office.

From his jail cell, Yoon has vowed to fight to regain office.  A majority of South Koreans approved of his impeachment and consider him guilty of insurrection, according to public opinion polls, but Yoon’s die-hard supporters have called his impeachment “fraud.”

Prosecutors said that Yoon committed insurrection during the short-lived imposition of martial law when, they said, he banned all political activities and ordered military commanders to break the Assembly’s doors down “with axes” or “by shooting, if necessary” and “drag out” lawmakers.  They said Yoon sent the troops there to seize the Assembly and detain political leaders.

Congo-Rwanda: This isn’t a market-moving event, but there is chaos and war in eastern Congo, and anger at foreign allies has been rising there over their inability to stop an assault on the key eastern city of Goma by M23, a militia that the UN and the U.S. say is controlled by Rwanda.

Analysts say Rwanda is seeking to occupy Congolese territory and plunder its vast mineral wealth.

Thirteen soldiers serving with peacekeeping forces in the Democratic Republic of Congo were killed in clashes with M23, with South Africa saying nine of its soldiers died helping to push back a rebel advance on Goma.

French President Emmanual Macron said he had spoken to the leaders of both Congo and Rwanda amid the global calls for the violence to end.

The M23 group has called on Congolese troops in Goma to surrender in order to avoid bloodshed.  The DR Congo has severed diplomatic ties with neighboring Rwanda, accusing the country of being behind the rebellion.  Rwanda denies this.

Protesters in Congo’s capital of Kinshasa have been targeting foreign embassies there.

The African Union (AU) called on M23 to lay down its arms.

Secretary of State Marco Rubio condemned the M23 attack in a call with Congolese President Felix Tshisekedi.

Random Musings

--Presidential approval rating....

Gallup: We have our first reading, with Donald Trump receiving the approval of 47% for his job performance, while 48% disapprove.  Forty-six percent of independents approve (Jan. 21-27). 

Every other president since Dwight Eisenhower has had an initial job approval rating of 50% or higher.  Trump was at 45% approval, initially, in Jan. 2017.

Rasmussen: 52% approve of Trump’s job performance, 45% disapprove (Jan. 31).

--I posted last week before Friday night’s Senate confirmation of Defense Secretary Pete Hegseth, which for the record was 51-50, Vice President J.D. Vance needing to break the tie after Sens. Lisa Murkowski of Alaska and Susan Collins of Maine were joined in dissent by Sen. Mitch McConnell (Ky.), the former Senate Republican leader.

McConnell, in a statement, gave a blistering critique of Hegseth:

“Mere desire to be a ‘change agent’ is not enough to fill these shoes,” he wrote.  The U.S. “faces coordinated aggression from adversaries bent on shattering the order underpinning American security and prosperity.  In public comments and testimony before the Armed Service Committee, Mr. Hegseth did not reckon with this reality.”

Hegseth is now in charge of the largest federal agency, one that leads three million troops and civilians and has an $800 billion-plus budget.

The new secretary then set about on Monday eliminating “wokeness,” saying such efforts as diversity, equity and inclusion programs had distracted the military from its core war-fighting mission.

Secretary Hegseth then decided to remove retired Gen. Mark Milley’s security detail, suspended his security clearance, and ordered an inspector general inquiry into his behavior as the Pentagon’s top officer, senior defense officials said Tuesday, taking extraordinary action against a frequent target of President Trump.

The move comes after years of Trump criticizing Milley for perceived disloyalty and Milley acknowledging in congressional testimony that he had served as a source for several unflattering books about the first Trump administration.

--The Senate confirmed Scott Bessent on Monday to serve as Trump’s next treasury secretary, 68-29.

--The Senate voted on Saturday to confirm Kristi Noem as Homeland Security secretary, 59-34.

Noem has served as governor of South Dakota since 2019 and is a former state legislator and four-term congresswoman.

“The mission and the success of DHS is more critical than ever,” Noem told senators during her confirmation hearing on Capitol Hill.  “We must secure our borders against illegal trafficking and immigration. We must safeguard our critical infrastructure to make sure that we’re protected against cyberattacks, respond to natural disasters, and also terrorism.”

--Former New York Rep. Lee Zeldin was confirmed by the Senate Wednesday as the new Environmental Protection Agency administrator in a 56-42 vote, Democratic Sens. Mark Kelly and Ruben Gallego of Arizona, as well as John Fetterman (Pa.) giving their approval alongside all 53 Republicans.

--Caroline Kennedy warned senators Tuesday about Robert F. Kennedy Jr., calling her cousin – ahead of his confirmation hearings to lead the Department of Health and Human Services – a “predator” whose victims have included family members and the parents of sick children.

The former ambassador said of RFK Jr. that he discouraged parents from vaccinating their children while vaccinating his own. She alleged that his “crusade against vaccination” has also served to enrich him.

She commended RFK Jr. for “pulling himself out of illness and disease” but lamented that “siblings and cousins who Bobby encouraged down the path of substance abuse suffered addiction, illness, and death while Bobby has gone on to misrepresent, lie, and cheat his way through life.”

Confirmation hearings for Kennedy, Kash Patel (FBI director) and Tulsi Gabbard (director of national intelligence) were contentious and as I go to post, they were inconclusive re any full Senate votes on same.

Separately, Doug Burgum was confirmed by the Senate on Thursday to lead the Interior Department by a vote of 79-18.  Burgum will be leading the “drill baby, drill” efforts on behalf of the administration as he oversees nearly 500 million acres of public land, for starters.

--Michigan Sen. Gary Peters, who led the Democrats’ Senate campaign efforts the past two election cycles, announced he will not seek a third term in 2026, which means another hotly contested Senate race in the battleground state.

Having lost Michigan in the presidential race, Peters’ decision forces Democrats to defend a critical Senate seat without the advantage of an incumbent, with Republicans having a 53-47 advantage. 

Expected to be among the names circulated for the position is Pete Buttigieg, the former transportation secretary who moved to Michigan in recent years.

This is the second consecutive cycle in which Democrats must navigate the challenge of defending an open Senate seat in Michigan, a state won by Trump last fall.

Longtime Sen. Debbie Stabenow shocked many in her state by announcing she would not seek a fifth term in 2024, but Democrat Elissa Slotkin held the seat by a very narrow margin.

--Former New Jersey Senator Bob Menendez was sentenced to 11 years in prison Wednesday after being convicted of 16 felony counts in a high-profile bribery scheme.  He resigned from the Senate in August, after months of maintaining his innocence and resisting calls from other top Democrats to step down.

Two New Jersey businessmen convicted of paying bribes to the senator were sentenced to 7 and 8 years.

Nadine Menendez faces trial in March on many of the same charges as her husband after spending the last year battling breast cancer.

--Addressing reporters on Air Force One on Saturday, President Trump said he believes the U.S. will gain control of Greenland, after showing renewed interest in acquiring the autonomous Danish territory.

“I think we’re going to have it,” Trump said, adding that the island’s 57,000 residents “want to be with us.”

Danish Prime Minster Mete Frederiksen reiterated Greenland was not for sale in a contentious phone call with the president last week.

“I don’t really know what claim Denmark has to it, but it would be a very unfriendly act if they didn’t allow that to happen because it’s for the protection of the free world,” said Trump.

Greenland’s PM Mute Egede said use of the territory’s land was “Greenland’s business,” though he did express a willingness to work more closely with the U.S. on defense and mining.

And that’s where this will end up.  As I wrote before, the U.S. should be able to expand its base in the northwest, add one the east coast, and work with Greenland on mining issues.

An opinion poll indicated that 85% of Greenlanders do not want their island to become part of the United States, with nearly half saying they see interest by Donald Trump as a threat.  The survey, which was conducted by pollster Verian, commissioned by a Danish newspaper and a Greenlandic daily, showed only 6% of Greenlanders are in favor of their island becoming part of the U.S., with 9% undecided.

--The Trump administration declared last week that the Gulf of Mexico had been renamed the Gulf of America, and on Monday, Google said it would update its maps to display Gulf of America as soon as the U.S. government updated its official maps.  Google will do the same with Mount Denali in Alaska, renaming it Mount McKinley, an earlier name.

--White House press secretary Karoline Leavitt said Tuesday that the drones that spooked New Jersey residents last month were “not the enemy” – reading aloud President Trump’s assessment that many were doing “research,” generating new questions.

“After research and study, the drones that were flying over New Jersey in large numbers were authorized to be flown by the FAA for research and various other reasons,” Leavitt said, reading Trump’s dictation at her first briefing.

“Many of these drones were also hobbyists, recreational and private individuals that enjoy flying drones. In time, it got worse due to curiosity. This was not the enemy.”

Then-House Foreign Affairs Committee chairman Mike McCaul (R-Texas) said last month that he believed many of the aircraft were “spy drones” from China.

“We’re not getting answers and I think it’s because our government does not know who is behind them and that is very disturbing to me.”

I personally didn’t make a big deal of the drone issue in this space, nor did I ever see one myself, and I have a terrific view from my perch of air traffic heading into and out of three airports (Newark, Teterboro, and Morristown).

But why did federal officials not say anything to us if their actions were so innocent?  What was the research and “other studies?”  The FAA, after all, issued flight restrictions across the state, but they were then lifted everywhere except over Trump’s Somerset County golf club until Jan. 31.

--Los Angeles received some much-needed rain last weekend, but officials said the region needs 2 to 4 inches to comfortably ditch the ongoing wildfire threat and the storm dropped a half-inch to 1.5 inches across the L.A. Basin.  The mountains did receive substantial snowfall, which helps with the reservoirs, and more rain is expected next week.  There were mudslides but from what I’ve seen, not as bad as feared and the rain did help considerably in fighting the existing fires.

However, officials cautioned that the fire ash and mud that flowed through streets in the L.A. area on Monday was a toxic mix of incinerated cars, electronics, batteries, building materials, paints, furniture and other household items.  It contains pesticides, asbestos, plastics and lead.  Residents were urged to wear protective gear while cleaning up.

In other words, don’t start cleaning up your lot without protective gear, plus the EPA is cleaning up property at no cost to residents.  Once a property is cleared of toxic debris, the agency will place a sign noting the work is complete...but this will take months to finish the work.

And then comes Phase Two: the removal of all other debris.  The Army Corps of Engineers is offering a voluntary and free private property debris removal program to residents who opt in.

But last week in terms of rebuilding I noted that 41% of construction workers were immigrants, so with the Trump administration’s focus on deportations, a real concern for builders.

And this week the Los Angeles Times noted that California has an estimated 162,000 farmworkers and more than half of them are undocumented, according to federal data.  And so for good reason, immigrant communities in the Central Valley and beyond are on heightened alert.

In recent weeks, news organizations have reported that many Central Valley farmworkers are not showing up for work, fearing they’ll be arrested or deported.

As California braces for a promised blitz of raids and deportations, farmers in the state are expressing fears that targeting their workforce could lead to lost harvests and higher food prices.

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We pray for the victims and their families in the American Airlines tragedy, as well as for the First Responders, who are working in incredibly dangerous and toxic conditions to recover all the bodies.

God bless America.

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Gold $2827...new weekly all-time high
Oil $72.46...3:30 p.m. ET close, but moving a bit higher after market

Bitcoin: $101,620 [4:00 PM ET, Friday]

Regular Gas: $3.11; Diesel: $3.66 [$3.14 - $3.93 yr. ago]

Returns for the week 1/27-1/31

Dow Jones  +0.3%  [44544]
S&P 500  -1.0%  [6040]
S&P MidCap  -1.1%
Russell 2000  -0.9%
Nasdaq  -1.6%  [19627]

Returns for the period 1/1/25-1/31/25

Dow Jones  +4.7%
S&P 500  +2.7%
S&P MidCap  +3.8%
Russell 2000  +2.6%
Nasdaq  +1.6%

Bulls 47.5
Bears 29.5

Hang in there.

Brian Trumbore

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