Morning News: March 5, 2026
Posted by Eddy Elfenbein on March 5th, 2026 at 7:05 am

Dubai and Its Neighbors Face a Huge Dilemma Over Iran

Iran’s Drones Cost a Fraction of the U.S. Weapons Shooting Them Down

Oil Tanker Suffers Explosion as Risks Spread Wider Into Gulf

Oil Rises as Iran War Piles Further Stress on Energy Supplies

This Oil Shock Hits Differently for the US

How War in the Persian Gulf Could Spill Into the U.S. Economy

Energy Dominance Won’t Stop US Fuel Costs Pushing Higher

China Tells Top Refiners to Halt Diesel and Gasoline Exports

China Sets Lowest Growth Target Since 1991 as Old Model Falters

America Second, Israel First?

Iran War Punctures Strategy of ‘Sell America, Buy Asia’

How Data Centers Became a Casualty of War

Wall Street Is Betting on Tariff Refunds After Supreme Court Ruling

They Made It Through the 24 Hours That Rocked South Korea’s Markets

What the Extraordinary Market Volatility in Asia Says About Energy and A.I.

World Bank Says $50 Billion Committed to Africa Power Plans

Why EV Chargers Are Booming Despite Slumping New Car Sales

Why Gold Stablecoins Will Not Dethrone “King Dollar”

Private Credit Is Learning All About Liquidity

BlackRock Slashes Another Private Loan Value From 100 to Zero

US Job Cut Announcements Ebb After Jumping at Start of 2026

‘No Tax on Overtime’ Isn’t All It Seems for Some Workers

Anthropic Reopens Talks with Pentagon After Feud Over AI Safety

Wall Street Sees AI’s ‘Creative Destruction’ Coming For Entire Companies

China’s Traditional Businesses Try to Buy Into AI Boom

Musk’s Freewheeling Tweets Land Him in Legal Jeopardy Again

DHL Parent Deutsche Post Expects Earnings Growth Despite Uncertain Conditions

Eli Lilly Launches Program to Help Boost Employer Coverage of Obesity Drugs in U.S.

$2.5 Million Rift Pits Cannabis Pioneer Against Group That Backed Her

Kroger Offers Cautious Sales Forecast as New CEO Takes Over

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Morning News: March 4, 2026
Posted by Eddy Elfenbein on March 4th, 2026 at 7:03 am

The High Stakes of Keeping the Strait of Hormuz Open

Energy Price Fears Ripple Through Global Markets

How the Iran War Is Choking Off the World’s Oil and Gas

Iran Conflict Is Starting to Boost Gasoline Prices

Why American Frackers Aren’t Rushing to Pump More Oil

US to Exempt Rosneft’s German Unit From Sanctions Indefinitely

The Iran War’s Most Precious Commodity Isn’t Oil

How Anonymous Bettors Cashed In on the Iran Strike, Just Hours Before It Happened

Chaotic Prediction Markets Need Reining In

‘Whatever It Takes’ Rattles Global Markets

Stock Crash Wipes Out Leveraged Bets in Korea, Sowing Panic

OECD Sees Rising Refinancing Risk as Bond Sales Surge

Bessent Says Trump’s Tariff Hike to 15% Likely This Week

Top Fed Official, Wary of Inflation, Calls for Extended Rate Pause

Kashkari Says Fed Can Sit Tight as War Clouds the Outlook

Big Lenders’ Risky Loans Are Rattling Wall Street

MrBeast Is Getting Into Financial Services. Parents Should Pay Attention.

American Housing Dream, American Housing Nightmare

Homeowners Stay Put for 12 Years, Stifling the US Housing Market

To Cut Housing Costs, Some States Are Easing Fire Safety Rules

Trump Administration, in Reversal, Tries to Continue Fight Against Law Firms

A Tiny Silicon Valley Startup Envisions Computing Beyond the Semiconductor

How the Digital Age Sparked An Analog Revival

The US Has Enough Missiles for This War But Not the Next One

Claude AI Helped Bomb Iran. But How Exactly?

Anthropic Nears $20 Billion Revenue Run Rate Amid Pentagon Feud

Sahm: Jack Dorsey Is Wrong: Pro-Worker AI Is Possible

Schaeffler Shares Plunge After Guidance Falls Short of Expectations

U.S. Automakers Risk Being Reduced to Niche Producers of Gas Vehicles

ASM International Posts Net Profit Above Market Views

Netflix Won By ‘Losing’ the Battle for Warner Brothers Discovery

Paramount-Warner Deal Promises to Shake Up Streaming

Activist Elliott Invests $1 Billion in Pinterest

Bath & Body Works Reports Lower Profit

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CWS Market Review – March 3, 2026
Posted by Eddy Elfenbein on March 3rd, 2026 at 6:32 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

This weekend, the U.S. military commenced Operation Epic Fury with its mission of toppling the theocratic regime in Iran.

I’m far from an expert on defense issues or geopolitics (although I am a retired PFC), so I have no valuable insights on the efficacy of the mission or its potential outcome.

Around here, our concern is with finance and how the markets are reacting. For now, markets are clearly nervous. On Monday, the U.S. stock market opened lower. At one point, the S&P 500 was down 1.2% on the day. As you’d expect, many defense and aerospace stocks held up well along with energy stocks. Several travel-related stocks were among the losers.

Let me caution you that I see absolutely no reason for investors to sell. If anything, a downturn could present us with a good buying opportunity.

Bear in mind that a lot of successful investing boils down to doing nothing when everybody else is panicking. As the great Jesse Livermore said, “It never was my thinking that made the big money for me. It always was my sitting. Got that?”

Got it.

Despite the market’s weak morning on Monday, the index finished slightly positive by the closing bell. I’m sure a lot of people didn’t see that coming, and it’s a good reminder that the market loves to do what’s not expected.

Today we saw similar action but with even greater swings. At one point this morning, the S&P 500 was down over 2.1% and it briefly reached a three-month low. Like on Monday, the market reversed course and eventually closed lower by 0.9%.

Also today, there was a clear “run for safety.” By that, I mean that much of the losses were concentrated among High Beta stocks while the Low Volatility sector held up far better (still down, mind you, but not as much).

In plain English, the conservative stocks remained calm while the volatile stocks were more…well, volatile.

Check out this chart which shows the S&P 500 Low Volatility Index (in blue) compared with the S&P 500 High Beta index (in red). Since early January, Low Vol has been doing much better. This comes after last year when High Beta thrashed Low Vol.

We can also see this flock-to-safety among size categories. The big guys in the S&P 100 were down just 0.6% today, but the small-cap Russell 2000 was down close to 1.8% today.

Not surprisingly, the price of oil gapped up this week, but it wasn’t a panic move. One-fifth of the world’s oil consumption goes through the Strait of Hormuz. There could be a dramatic price spike, and that would certainly hurt consumer spending.

We saw that happen after Saddam Hussein invaded Kuwait, and that helped tip the economy into a recession. It can take a while before a disruption in the oil market appears as prices at the pump, and the odds of higher prices increase the longer the military operation lasts.

On Monday, we got the ISM manufacturing index report. This is a good report to watch because it usually comes out on the first business day of each month. Monday’s report said that the ISM Manufacturing Index for February was 52.4. That’s down a small bit from January’s number of 52.6. Wall Street had been expecting 51.8.

Any ISM number above 50 means that the factory sector of the economy is growing. This was the second month in a row of expansion, and it comes after 10 months in a row of contraction.

The Federal Reserve doesn’t meet again for another two weeks. It’s very doubtful that the Fed will make any move on interest rates at its upcoming meeting. In fact, it probably won’t make a move in the meeting again after that. The June meeting, however, could see some activity, but those odds have fallen some since the military operation started.

Remember that it’s very likely that Kevin Warsh will take over as the head of the Fed in May. Traders now see a 45% chance that the Fed will cut rates in June. That’s down from 56% a few weeks ago. The consensus on Wall Street is that we’ll have two 0.25% rate cuts before the end of the year.

On Friday, the government will release the jobs report for February. The January report said the economy created 130,000 new jobs that month. This time, economists expect to see a gain of just 50,000 jobs. A weak jobs number could spur the Fed to act, but at this point, it would have to be a dramatic miss. Now let’s look at one of my favorite little-known stocks.

Stock Focus: Allison Transmission

In our premium newsletter, we’ve recently finished all the earnings reports for Q4. (By the way, you can sign up for it here!) There’s one of our stocks in particular that I wanted to share with you, which is Allison Transmission (ALSN). In three-and-a-half months, shares of Allison are up close to 60% for us.

Allison has a market value of about $10 billion. While that may sound like a lot, it’s small potatoes on Wall Street. Only a few analysts cover the stock, which suits me just fine.

On February 23, Allison said it made $1.18 per share. That missed Wall Street’s forecast of $1.46 per share. The good news is that Allison gave reassuring guidance, and the shares rallied 4.4% the day after the report. After that, it closed higher for four straight days until finally closing lower today.

Allison specializes in making vehicle propulsion solutions, primarily fully automatic transmissions and electrified propulsion systems (including hybrid and fully electric options) for medium- and heavy-duty vehicles.

You can find their products in almost any vehicle including buses, motor homes and even the Abrams tank.

I added Allison to our 2025 Buy List, and it was a flop, but we held on and I’m glad we did. Once again, it was our sitting that did the trick.

The big news recently is that Allison completed the acquisition of Dana Incorporated’s Off-Highway Drive & Motion Systems business. This deal helps expands their footprint.

For all of 2025, Allison had sales of $3.01 billion, which matched its forecast. For the year, Allison made $7.33 per share. That’s down from $8.31 per share in 2024.

Let’s look at guidance, which is a little complicated due to the Dana deal. For all of 2026, Allison expects sales between $5.575 billion and $5.925 billion, but sales for the Allison Transmission segment are expected to range between $3.025 billion and $3.175 billion. That’s better than I had expected.

For 2026, Allison expects net income between $600 million and $750 million. That’s compared with $623 million last year. That’s not bad. It works out to net income of roughly $7.25 to $9 per share. If that’s right, then the stock is still going for a decent value. The current Enterprise Value/EBITDA is 11.67.

I also like that Allison increased its quarterly dividend by 7% to 29 cents per share. The new dividend is payable on March 20, to stockholders of record at the close of business on March 9.

In our premium issue, I rate Allison a buy up to $130 per share.

That’s all for now. The next jobs report will be due out this Friday, March 6. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: March 3, 2026
Posted by Eddy Elfenbein on March 3rd, 2026 at 7:06 am

Global Economy Is Facing the Prospect of Another Profound Shock

War, Oil and the World Economy

Trump Doesn’t Want Democracy in Iran or Anywhere. He Wants Puppets

Trump’s War on Iran Has Traders Staring Down an Energy Crisis

Oil Rally Builds as ‘Staggering’ Middle East War Jolts Energy

The US Has to Reopen the Strait of Hormuz as Soon as Possible

Airlines Grapple With Disruptions That ‘Far Surpass’ Previous Middle East Conflicts

‘Black Swan’ Risks Stalk Container Carriers in Avoiding Iran War

Tech Developer Syzygy Signs Deals Targeting Massive Boost in Sustainable Jet Fuel Supply

Coal Power’s Comeback Isn’t Spurring New Investment

Norway Wealth Fund Makes First Investment in US Renewable Energy Assets

Dubai’s Status as a Swiss-Style Haven Is Starting to Crack

Don’t Confuse the Iran War’s MAGA Critics With Most Republicans

What the Iran Strikes Could Mean for U.S. Inflation

Dollar Set for Biggest Surge in a Year as Inflation Fears Mount

Dimon Says Exuberant Market Doesn’t Match ‘Fine’ Economy

Is Free Trade Worth the Cost in Lives Lost?

Will Another Wave of Tariff Uncertainty Hold Economy Back?

The Unexpected Winners From Trump’s New Global Tariff

Tariffs Confound Small Businesses Again

Even Before He Reaches the Fed, Warsh’s Path to Rate Cuts Is Getting Tougher

Markets Have Evolved. So Should the SEC’s Disclosure Rules

Blackstone’s Flagship Private Credit Fund Hit by Record Redemptions

BlackRock Says Index Funds Alone Aren’t Enough for US Retirees

Palantir Is Back on Wall Street’s Buy List After a 38% Plunge

Is Europe’s AI Darling Mistral Becoming a Consultant?

Jack Dorsey Blamed AI for Block’s Massive Layoffs. Skeptics Aren’t Buying It.

Automakers’ Dilemma: Invest in New Tech or Stick to Gas Cars?

Toyota’s Buyout Deal is a Bigger Win for Elliott Than for Governance

Best Buy Surges After Results, Outlook Better Than Feared

Target Sales Just Fell Again. Now Its New CEO Plans for Turnaround.

Target Surprises With Upbeat Forecast on Improving Demand

Viking Enters Year With Strong Bookings, Earnings Top Estimates

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Morning News: March 2, 2026
Posted by Eddy Elfenbein on March 2nd, 2026 at 7:02 am

Middle East Conflict Imposes Another Stress Test on Global Resilience

Trump’s Iran Strikes Usher In an Era of Unrestrained American Power

Decades of Presidents Ignoring the War Powers Act Led Us Here

Iran Strikes Won’t Succeed Without a Real Strategy

China Showing Few Signs It Will Directly Supply Arms to Iran

The Big Bet on European Defense Stocks Is Getting Expensive

Oil Prices Jump After Iran Attack, Pointing to Economic Risks

Iran Conflict Puts Oil Shock Back on Asian Central Banks’ Radar

Oil Spikes as Middle East War All But Halts Hormuz Ship Strait

Any Chance of a Fed Interest-Rate Cut In 2026 Is ‘Evaporating Before Our Very Eyes’ with Iran War Set to Stoke Oil Prices

Traders Trim BOE, Fed Rate-Cut Bets as War Spurs Price Fears

Swiss National Bank Reports Annual Profit of $34 Billion

A Guide to the Fault Lines in the Credit Market

Want to Boost U.S. Affordability? Get Rid of Tariffs

Stock Investors Brace for Iran War’s Economic Repercussions

Trump’s SEC Gave Companies More Power Over Investors. Lawsuits Pushed Them Back

Berkshire’s New CEO Lays Out How He Will Pick Up Where the Buffett Era Left Off

Will Stablecoins Strengthen the Dollar, and Stall the Rise of Gold?

Rio Tinto Approves $473 Million South Africa Mine Expansion

Why California is Reconsidering Nuclear Energy After 50-Year Ban

Anthropic’s Claude Chatbot Goes Down For Thousands of Users

OpenAI Steps Over a Red Line Anthropic Refused to Cross

Mobile Chiefs Reckon With AI Boom and Geopolitics at MWC 2026

BlackRock’s GIP and EQT to Buy AES Corp in $33.4 Billion Deal

The Obscure Fee Costing You More to Buy a Car

Asian Manufacturers Show Resilience as Demand Rises

Toyota Bumps Offer for Supplier to $30 Billion, in a Victory for Activist Fund Elliott

Netflix’s Co-CEO Explains Why He Quit the Warner Bros. Fight

China Spent Big on an African Media Empire, But No One’s Watching

In Alysa Liu and Eileen Gu, China and America See a Mirror Image

What to Know About the Live Nation Antitrust Trial

The Third-Largest Coffee Chain in the U.S. Actually Sells Very Little Hot Coffee

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Morning News: February 27, 2026
Posted by Eddy Elfenbein on February 27th, 2026 at 7:03 am

Bombing Iran May Blow Up Trump’s Middle East Plans

US Threatens to Cut Off Swiss Bank Mbaer from Financial System Over Alleged Iran, Russia, Venezuela Ties

OPEC+ Looks Willing to Defy Oil Bears’ Warnings Again

Taiwan and TSMC Make the World Safer by the Day

Japan’s Takaichi Takes a Page Out of Trump’s Central Bank Playbook

Trade Remains ‘Challenging’ for Eurozone Amid Volatile Policy, Says ECB’s Lagarde

Under Siege from Politics, Central Bankers Fight Back – At a Cost

New Credit Blowup in London Has Wall Street Chasing Billions

The Buyers Behind Gold’s $5,000 Breakthrough

Kalshi and Polymarket Are Economic Oracles

Trump Says Prices Are Falling. Here’s Why That Would Be Bad

Trump’s Retirement Proposal Already Failed — Under Obama

The Redistricting War Spells Doom for Congress’ Last Moderates

Even States With No Income Tax Are Flirting With Taxing the Rich

Mortgage Rates Fall Below 6% for the First Time Since 2022

Netflix Backs Out of Bid for Warner Bros., Paving Way for an Ellison Takeover

Paramount Wins Bidding War for Warner Discovery After Netflix Drops Out

Tech, TV, Movies and News: Ellisons on Brink of Colossal Empire

What I Learned In Business School Wasn’t Reflected In the Real World

Raves, Debt and Deaths: How a Wall Streeter Came to Own New York’s Biggest Club

Brink’s to Acquire NCR Atleos in $4 Billion Deal in Combo of ATM Players

Nebraska’s Most Feared Man: The Auditor Who Busts State Workers for Running Errands

No Such Thing As ‘Free Bus Fares’ In Any City

A World Where All Is Free? That’s Elon Musk’s Theory of ‘Sustainable Abundance.’

The Web of Companies Owned by Elon Musk

Bad Bets: Massive EV Subsidies Not Paying Off

Nvidia’s Huang Confronts an Investor Audience Demanding the Next Big Thing

Anthropic Rejects Latest Pentagon Offer, Escalating AI Feud

Tech Has Never Caused a Job Apocalypse. Don’t Bet on It Now.

How Jack Dorsey Explained Cutting Almost Half of Block’s Staff

The Rise and Fall of a 3-D Printing Empire

The $3,000 Minipig Powering Europe’s Drug Pipeline

Bloomingdale’s Is Defying the Demise of Department Stores

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Morning News: February 26, 2026
Posted by Eddy Elfenbein on February 26th, 2026 at 7:06 am

World Economic Forum Chief Steps Down After Epstein Probe

Capital Formation Is Elemental To Economic Growth

Brazil Goes From Big Loser to Winner in Trade Showdown With Trump

The 6-3 Supreme Court Tariff Vote Calls for Term-Limited Judges

Shipping Industry Sends Strong Consumer Demand Signal For The Year

Wall Street Traders Are Pouncing on the Tariff Refund Chaos

Auditing the IRS: The Future of America’s Most Critical Agency

For America’s 250th, Should the Coin of Trump’s Realm Be Gold?

Why Young Men Are Abandoning Trump

Janus Bidding War Begins as Victory Capital Tops Trian Offer

Marathon’s Richards Fears 15% Direct Loan Software Defaults

Kalshi Says ‘MrBeast’ Employee Violated Insider Trading Rules

The Rising Price Danger of Surveillance Pricing

Trump Proposed a New Retirement Plan With Up to a $1,000 Match. How Might It Work?

New A.C.A. Plans Could Increase Family Deductibles to $31,000

‘Leverage.’ ‘Reach Out.’ ‘Circle Back.’ The Corporate Jargon We Hate the Most.

Fintech Plaid Nabs $8 Billion Valuation in Latest Funding Round

Nvidia Beats Back Bubble Fears With Record $68 Billion in Sales in Fourth Quarter

Nvidia’s 75% Margin Gives AI Rivals Something to Aim For

Nvidia’s Upbeat Sales Forecast Gets Lackluster Investor Response

I Thought I Understood A.I. Companies. I Couldn’t Have Been More Wrong.

Claude Code and the Great Productivity Panic of 2026

Anthropic’s Pentagon Showdown Is About More Than AI Guardrails

Anthropic Vs. the Pentagon Is a Fight for AI’s Future

Women Are Falling in Love With A.I. It’s a Problem for Beijing

Satellite Images Expose Trump’s Claim of ‘Easy’ Victory in Iran

Aramco Starts Giant Jafurah Gas Field in Bid to Boost Cash Flow

BlueScope Says $11 Billion Steel Dynamics, SGH Takeover Offer Insufficient

Blaming Tariffs, Aston Martin Will Trim 20% of Its Work Force

Warner Bros. Posts Lower Sales, Profit Amid Takeover Fight

Shake Shack Profit Rises as Deals Draw Customers

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Morning News: February 25, 2026
Posted by Eddy Elfenbein on February 25th, 2026 at 7:03 am

Waging War With Iran Is In No One’s Best Interest

What’s at Stake for Oil If Iran-US Tensions Escalate

Attack of the Zombie Tariffs

China’s $112 Billion Cargo Gap Shows Record US Tariff Evasion

Trump Finally Gave an Affordability Speech

Trump Brushes Off Affordability Worries in State of Union Speech

The Trump 1 Percent Fan Club Has a Lot of New Members

US Mortgage Rates Reach Lowest Since 2022, Spurs Refinancing

The Birthrate Obsession: A Sign That Keynes Still Pollutes Economics

Fed Independence Is Sacred, or So We’ve Been Told

Trump Administration Weighs Requiring Banks to Collect Citizenship Info

JP Morgan Raises Long-Term Gold Price Forecast 15% to $4,500 an Ounce

Circle Internet’s Quarterly Profit Surges on Stablecoin Demand

Why This Investor Says You Can Make Good Money Off Software Stocks — If You Trade Them Like Telephone Directories

Sorry FTC, the First Amendment Trumps Antitrust Law

Mamdani’s New York Is Flirting With Fiscal Nihilism

Court Rules Against Justice Dept. Search of Reporter’s Computers

Abu Dhabi’s State Oil Company Looks Beyond Oil

Korean Memory Makers Pursue Next Breakthrough With HBF Idea

Pentagon Gives A.I. Company an Ultimatum

Bleak Research Report Stokes A.I. Debate on Wall St.

Deutsche Bank, Goldman Look to AI to Flag Trader Misconduct

Nvidia Earnings Loom as Risk Factor for AI-Obsessed Stock Market

Softbank’s Ohio Power Plant Delivers an AI Sticker Shock

Why the Tab for Powering Data Centers Will Keep Rising — Despite Trump’s Pledge

A Divided $377 Billion Tech Giant Reveals the Perils of AI

Wayve, an A.I. Driverless Car Start-Up in Europe, Raises $1.2 Billion

Lowe’s Signals Muted Housing Demand In Weak Full-Year Forecast

How United’s ‘Act of God’ Expectations Help It Hit Financial Targets

Paramount’s Newest Bid Could Open Door to Beating Netflix Deal, Warner Says

Harvard’s Decades-Long Expansion Dream Meets Harsh Real Estate Reality

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CWS Market Review – February 24, 2026
Posted by Eddy Elfenbein on February 24th, 2026 at 6:36 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

For the 44th trading day in a row, the S&P 500 closed within 1.5% of 6,900. It doesn’t seem to matter what the news is – the S&P 500 can’t get the strength to stray very far from 6,900. While on the surface, the market appears to be calm, that can be misleading. There are strong currents just below the surface.

The most important change is that since late October, defensive stocks have started to act much better, especially compared with the overall market. By defensive stocks, I mean companies whose businesses tend to prosper no matter what the rest of the economy is doing. Principally, I think of consumer staples and healthcare stocks as the best examples of defensive stocks.

When times get tough, defensive stocks hold up much better. Or, more accurately, defensive stocks tend to fall the least in bear markets. Before October, defensive stocks got absolutely clobbered by traders. Beginning in April 2025, the market soared, but our defensive friends barely budged. The gap between defensive stocks and everybody else grew enormously wide.

I knew something had to give, and it finally happened.

Since October 29, the S&P 500 Consumer Staples ETF (XLP) is up by 17.6% and the S&P 500 Healthcare ETF (XLV) is up by 10.4%. Meanwhile, the S&P 500 ETF (SPY) is up by a scant 0.3%.

As a general rule, defensive stocks will slowly lag the market for a long time; then all of a sudden, they massively outperform. Think of defensive stocks as the lifeboats of stock picking.

The time to buy defensive stocks is when the economy gets wobbly. The big question is, if defensive stocks are leading the market, does this mean that Wall Street is worried about the economy? Utilities are also defensive and they also do well when the economy is weak and rates are coming down.

The U.S. Economy Hit a Small Bump Last Quarter

On Friday, the Commerce Department finally released its long-delayed Q4 GDP report. Bear in mind that this is dated info. Q4 began five months ago and ended two months ago.

Unfortunately, the news wasn’t very good. According to the government, the U.S. economy grew in realized annualized terms of 1.4% during Q4. That was well below economists’ estimate of 2.5%. Some folks were expecting 3% or more.

The Commerce Department said that the government shutdown shaved about 1% off growth for Q4.

Consumer spending increased at a slower pace for the period while government spending tumbled sharply in a quarter marked by the record-length shutdown. The department estimated that the shutdown subtracted about 1 percentage point from growth, though it added that the exact impacts “cannot be quantified.”

For the full year in 2025, the U.S. economy grew at a 2.2% pace, down from the 2.8% increase in 2024.

The shutdown ran for most of the first half of Q4. Except for Covid, last year the U.S. economy had the worst year for economic growth of the last nine years. I think it’s interesting that nominal GDP grew by 44% over the last five years. Of course, inflation had a lot to do with that, as did the sharp rebound from Covid.

There were some positive details within the report:

Another key Fed metric, called final sales to private domestic purchasers, posted a 2.4% increase for the quarter, half a percentage point lower than the prior quarter but still indicative of solid underlying demand in the $31.5 trillion U.S. economy.

Also, gross private domestic investment rose 3.8% after being flat in Q3. On the downside, government spending and investment slid 5.1%, slammed by a 16.6% tumble at the federal level that was only partially offset by a 2.4% increase from state and local entities.

We also got the PCE data which is the Fed’s preferred measure for inflation. During December, the PCE rose by 0.4%, and it’s up by 2.9% over the last year. That was a little higher than expected. In December, the core PCE rose by 0.2%, and it’s up by 3% over the last 12 months.

Where does this leave the Federal Reserve? Probably no change. The Fed doesn’t meet again for another three weeks and it’s very doubtful the Fed will make any changes to interest rates at its March or April meetings. There is a decent chance, although far from absolute, that the Fed will make a move in June. Of course, this would be after May when Jerome Powell’s tenure comes to an end.

If you want to see a sneak preview of what the Fed is up to, checking out the two-year Treasury is often a good predictor. If you look at the chart below, the blue line (the two-year yield) often runs just ahead of the Fed’s policy (the red line).

The Fed currently has interest rates pegged between 3.5% and 3.75%. The two-year Treasury is currently at 3.47%. This tells me that the Fed probably won’t make any big moves soon.

Stock Focus: Graco

If you’ve followed me for a long time, then you know I’m big fan of little-known stocks that have great long-term track records. I’m always amazed that investors waste so much energy trying to find the “next Nvidia” instead of the current Church & Dwight (CHD).

This week, I want to bring Graco (GGG) of Minneapolis to your attention. I can’t say that Graco is completely unknown, but it isn’t well known. Graco turns 100 years old this year.

The company describes itself:

Graco Inc. supplies technology and expertise for the management of fluids and coatings in both industrial and commercial applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and spray fluid and powder materials. A recognized leader in its specialties, Minneapolis-based Graco serves customers around the world in the manufacturing, processing, construction, and maintenance industries.

Sexy, right? Management of fluids! Sure, I know it’s a little boring, but look at the stock. According to this chart, shares of GGG are up 70-fold over the last 40 years.

That doesn’t include dividends. If we add in dividends, then GGG is up more than 440-fold over the last 40 years. Not bad for managing fluids.

But there’s another reason why I like Graco. I love to follow the Dividend Aristocrats. These are companies that have increased their dividends every year for at least 25 years. There’s an ETF focused on the the Aristocrats (ticker symbol: NOBL).

One pet peeve I have is that too many Dividend Aristocrats give their dividends a token increase just so they can keep their dividend streaks going.

That’s where Graco comes. First, GGG can’t officially be a Dividend Aristocrat because it’s not in the S&P 500. It’s in the Mid-Cap S&P 400. What I like about Graco is that the company consistently raises its dividend by sizable amounts. It’s rare that you’ll see Graco hike its dividend by less than 7%.

From Graco’s Investor Relations page, you can see a long history of Graco’s dividends. Not many companies provide that level of detail. The current quarterly dividend is 29.5 cents per share. Over the last 20 years, Graco has increased its dividend at an average rate of 9.5% per year, and that comes on top of a healthy increase to its stock.

As much as I like Graco, the company has missed its earnings forecast several times recently. I can’t say I’m a buyer yet – I’d prefer to wait on Graco until its business improves. That’s the great thing about investing. We can wait and wait and wait until we get the patch we want.

That’s all for now. The next jobs report will be due out on March 6. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: February 24, 2026
Posted by Eddy Elfenbein on February 24th, 2026 at 7:02 am

Russia’s Invasion of Ukraine Has Already Changed the World

China Hits Japanese Firms With Export Bans

The Looming Taiwan Chip Disaster That Silicon Valley Has Long Ignored

Trump’s 10% Levy Takes Effect as US Rebuilds Tariff Wall

Trump Says Economy Is His Now, Faces a Tough Job Selling It

Has Trump Delivered on His Promises? What These 12 Metrics Tell Us

The State of the Union for Small Business Is Dismal

Bad Economics Isn’t Necessarily Unconstitutional

There Is a Debt Crisis, But It’s Unseen and Not Even Discussed

European Style Corporate Strangulation Hardly Works In the U.S.

I.R.S. Tactics Against Meta Open a New Front in the Corporate Tax Fight

Why the I.R.S. Wants $15 Billion From Meta

Meta to Spend Billions of Dollars on AMD Gear, Buy Stock

Dimon Sees Pre-Crisis Parallels as Rivals Do ‘Dumb Things’

Private Markets Hiring Defies Gloom With $2.5 Million Pay Deals

The End of the Federal Government’s Debit Card ‘Inflation’ Scapegoating

How Prediction Markets Polymarket and Kalshi Are Gamifying Truth

Binance Employees Find $1.7 Billion in Crypto Was Sent to Iranian Entities

FedEx Sues for Refund of Trump Tariffs Rejected by Supreme Court

Home Depot Profit Falls As Home Improvement Downturn Continues

Pentagon Summons Anthropic Chief in Dispute Over A.I. Limits

AI Image Pioneer’s Startup Unveils Technology to Speed Up Chats

Paramount Submits Higher Offer for Warner Bros.

Roku’s New Ad Deals and Cost Cuts Help It End a Three-Year Profit Slide

The New Head Of Xbox Is Worried About Birthrates, But Says AI Will Save Us

Europe’s Biggest Business Lobby Calls for Carbon Market Overhaul

Fresenius Medical Care Shares Drop After Outlook Underwhelms

Keurig Dr Pepper Sales Rise on Higher Prices

America’s Love of Ube Is Straining Supplies in the Philippines

Planet Fitness Posts Higher Profit, Revenue

Saks Owner Says He Saved Department Stores. Never Mind the Bankruptcy.

The Luxury Resale Market Is Booming. Brands Are Struggling to Cash In.

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