An 'absence of bids'  followed The White House affirmation tariffs planned still, to be implemented; and now they say on Saturday, or Tuesday. Traders scampered to the sidelines; unwilling to support prices, irrespective of being month-end. It's simple to say: Friday went up; wanted to go up; paused; tried for an afternoon resumption higher; then POTUS became a spoiler. And everyone retreated.

So .. retaliatory tariffs or not.. more likely some sort of negotiated settlement if Trump wants to proclaim success while allowing important face-saving to our close 'Allies and trading partners'. He has to be difficult (I get that) because all our partners learned about how everything is a transaction, during Trump 1. ... So he has to at least appear to be heavy-handed, whether or not it's reality.

Now the Labor Market will be watched next week. I don't see it very relevant; as nothing is likely from the Fed until March (if then); however there are a few evidences of both contraction and of expansion; depending where you look. It is the same for the stock market; and almost like the weather, which has seen great contrasts; or especially California; alternating between fires and floods.

Traders have tried to protect against geopolitical uncertainty (including tariffs) and the Oil market. And they even ponder what happens if a Middle East deal that involves a U.S./Saudi/Israeli 'security pact', follows the weakening of Iran, destruction (mostly) of Hamas; and narcissism of the Saudi leadership, which is a highly dangerous partner to rely on in a likely deal. (A so-called 'Prince' who imprisons opponents, and murders reporters just for disagreeing; is not a suitable partner; but as the saying goes 'those are the cards to deal with'.)

At the same time, 'search' (particularly as relates to ChatGPT) being newly vulnerable, was and remains key to certain aspects of big-cap technology. In our view small-cap AI is preferable to risks in big-cap tech; though both are in a series of swings .. while for the smaller it tends to be accumulation or just consolidation; while for the bigger it's often simply vulnerable toppy behavior.

I suppose I should note reports of compelling most Venezuelans living in the United States to return. That is somewhat ridiculous. Probably intentionally we have that story... so that a U.S. envoy there now, has some leverage (Maduro doesn’t want thousands returning). Think about it. However, talking to Maduro is almost recognizing him; which The White House says they're not doing.. so a mistake.. we will have to see what Sec'y. Marco Rubio has to say when he weighs in on this, given his 'prior' constituency support in Miami/Dade.

Market X-ray: bids just dried up; volume wasn't dramatically heavy on the downside; it was just an 'evacuation' of tenacious bidding.. with a bifurcation that's known.. such as negative breadth while the S&P is up... something we saw a couple times this week.

So is the threat of tariffs worse than the reality? We'll find out; and probably. But late on a Friday ahead of finding out; there was no reason for traders to be particularly aggressive in the market. We probably get a rebound almost regardless how Monday starts; but we'll have to see.. and it will be February.

Trump says there's no way to avoid tariffs; and he's tying that to lower drug prices too. We'll see how this goes; for now it's about AI, China and tariffs. It also out to include the overall solution to the Washington airspace situation. Of course it awaits the investigation; which in the end comes down to the US Army helicopter being in the wrong place; and 'visual separation' requested, rather than mandated, during the entire flight in a terminal control area.

So yes, the D.C. metro area is literally swarming with low-altitude military and civilian helicopters. The solution could be a 'bullet train' to take passengers to Dulles Airport (20 miles away) at high-speed; and restrict DCA (Reagan) only to military and Government air operations. Dulles should be the primary; with no 'airport of convenience' at DCA, because it just can't handle the traffic. So if the politicians insist on keeping it 'commercial'; then military has to move to another location; they won't do that willingly, given proximity to the Pentagon.

As to the market, at the moment it is being reactive to tariffs, news of which of course aborted the effort at finishing January on a strong note. It's that basic.

Swinging headlines; whether about tariffs this weekend; Walgreen's dividend cutting; Chevron tanking (both in Indexes); or the wave of earnings which for the most part were 'mixed'; you had trading wrap-up on Friday without much indication about February; although I still think part will rotate and dynamics be trickier.

As to the start; that depends on reaction to tariffs...probably not a huge cudgel on the market; while they are sort of 'moving targets' from every perspective. I suspect a lot of it is Presidential 'shooting from the hip', which is why he says a lot of 'heavy-handed stuff', and then the final result is often less cudgel and more light-touch, if not a feather. But it creates alternating 'yellow flags' more or less frequently; plus you have a toppy-looking S&P, if not broader market.

The late 'stall' of Oil tariffs until February 18th; sort of cooled things just a bit. So maybe market gets choppy rather than tanks; sort of a 'reprieve' without a resolution is feasible; but defensive... unless of course POTUS makes a deal; which is broadly presumed what he wants (and that actually makes it dicier).

This Administration wants 'drill baby drill', and this year won't be dramatic in that regard (more talk about it than significant production increases); thus Oil prices shuffle emotionally; but supply/demand equations shift little for now of course unless Trump makes a deal with Ottawa, and Canadian Oil flows in... separately from Exxon and Chevron tanking late in the day (on earning not so much the tariff-line-of-fire). CVX still has the Hess and power-plant deals to contend with; a little bit more high-beta behavior than usually seen in Oils. Of course a lot of their Oil may come from Canada for refining here; even as Washington will 'say' we don't need or use Canadian Oil (that's inaccurate).

And I suppose I should warn about GLP1 drugs; with pills and compounded drugs on-tap. FDA approved more use-cases this week; but that was 'in' the share prices; so they came down. More approved uses 'with pills' will also be increasing numbers of people using these (somewhat risky side effects must be noted) drugs, but pharma profit margins at least, will be coming down at the same time more insurance formularies will cover the prescriptions.. we'll keep an eye on semaglutides but not prescribe any of the particular stocks. (I noted that Lilly talked of lower sales; so maybe same for Nova Nordisk, but of course that's rear-view mirror before increased cardiovascular approvals.)

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