Let me start by saying, it is hard to believe a storm named “Fern” would have such a big impact on over 200 million people ranging from Texas to the Northeast. It’s been quite some time since we’ve had this much snow, and the sub-zero temperatures make me envious of those living in warmer climates. I’m looking at those of you who live in Florida! However, it appears the markets are also feeling a little chilly, as the major indexes were mostly flat this week. The earnings announcements aren’t to blame, but investors are nervous nevertheless and are taking some profits.
Before we get to the heart of this week’s stories, let’s discuss social media for a minute. Trials are getting underway regarding the role some of the largest tech companies have played in allegedly addicting minors to their platforms. There are over 3,000 lawsuits pending in California alone and another 2,000 federal lawsuits against Meta, Tik Tok, Snap, Instagram, and YouTube. They are drawing comparisons to the class-action lawsuits against Big Tobacco and Big Pharma companies that knowingly concealed the risk of cigarettes and opioids. France, Britain, and Egypt are considering banning social media for those under 16 while Australia already took the first step in December.
Now back to the economy and earnings. We learned this week that consumer confidence fell to its lowest level since 2014. If you watched any news or browsed social media in the past few weeks, you’ll understand the issues and perhaps the concerns. It appears the consumers… are not confident. Respondents often cited the cost of gas and groceries, while mentioning politics, the labor market, and health insurance costs as additional concerns. And they’re not to be blamed. Economists and analysts project that the labor market will stay stagnant in 2026. Yet despite the drop in confidence, the economic numbers don’t reflect this level of pessimism. To quote Fed Chair, Jerome Powell, at the January 28 press conference, “The consumer is filling out surveys that are really negative and then spending (anyway).
”As for trade, it seems the U.S. isn’t the only country negotiating deals. We recently learned Canada cut a deal with China to allow EVs further access into Canada while granting Canada significantly lower tariffs on its agricultural exports. Also, this week the “mother of all trade deals” between the European Union (EU) and India is pending ratification. Leaders from both sides have created a free trade zone of 2 billion people representing 25% of global GDP and nearly 33% of global trade. In the face of continued tariffs, and in some cases threats of new tariffs, countries around the world are beginning to reassess trading partners and decades-old behaviors. What was set in motion last year is gaining momentum in surprising ways. While this shift could result in unexpected consequences, it may also present opportunities for investors.
For the story of the week, I turn to the Olympics. It is that time again. What caught my attention this week was a story with a potentially happy ending. It seems Ross Stevens, a financier and billionaire, is giving a generous $100 million gift to athletes this Olympics. Every U.S. Olympic and Paralympic athlete, regardless of sport or performance, will receive $200,000 just for participating. This may be the best participation trophy I’ve heard of yet. Now you know.
Bruce J. Mason, MBA
