New Energy Weekly – Sentiment Gauges Are Awful
As we write this, Bloomberg assures us that today’s stock decline was the worst in two months
It feels worse than that. And sentiment gauges are awful. Consumers (that’s us) have the worst long-term inflation views since 1995.
This is what we feared most in 2025. After a decade plus of a hot stock market, some catalyst would come along and scare investors out. Turns out, that scare was Elon Musk.
Steve Cohen, the billionaire founder of Point72 Asset Management, spoke in Miami this week. He addressed the Future Investment Initiative Institute’s summit. All was not sunshine and light…
He reiterated what we’ve told you here repeatedly:
“Tariffs cannot be positive. It’s a tax. And you can imagine tit-for-tat if the US implements a tax on somebody, they’re going to perhaps raise the stakes and raise their tax back.”
He cited several reasons, beyond just tariffs. Sticky inflation, slowing growth, and Elon Musk’s efforts at cutting the government are all reasons to be wary of the stock market today.
And it isn’t just in the U.S. Our neighbors are caught up in the economic downturn as well. Economists predict Canada’s economic growth will slow in 2025 to just 1.6%. That’s down more than 10%. The driver is U.S. tariffs on Canadian goods.
The current administration slapped a 25% tariff on most imports from Canada and even 10% on Canadian oil. The administration signed that order on February 1st, but it was put on hold until early March.
The true risk here is uncertainty. This same administration called the North American Alliance a “partnership with Mexico and Canada and ourselves against the world.”
The North America Alliance was the renewal of the 1990’s era North American Free Trade Agreement. Fast forward just five years and the alliance is broken. Now Mexico and Canada are targets.
For investors, the big risk isn’t the tariffs, it’s the unpredictability. We can work around new taxes. But it’s difficult to build an investment narrative when you have no idea what will be taxed next.
For the Good,
The Mangrove Investor Team
