3/21/2025
Stocks Topping Again
The Dow Industrials topped late in January. The Index declined in a first wave by losing 4,000 points. A counter trend second wave followed to the upside. The peak at 42,250 was recorded yesterday Thursday. This is shown on my free weblog at www.themarketperspective.com. The Industrials have been down over 400 points this morning. All major indexes are in decline. It may be that the correction has ended and the down trend has resumed.
Yesterday I saw anmarket strategist present his take on the economy. With no proof of causality, he claimed the 8% decline in the Industrials was, you guessed it, due to tariff uncertainties. It never occurred to him that perhaps a major social mood change has taken place. Margin debt is at a record, the price earnings ratio are well above normal, yet consumer confidence dropped a full five points in the latest survey. The Magnificent Seven have lost their luster. Increasing interest rates and the crushing debt all around the world are at work here.
Meanwhile in the Permian Basin, oil prices have steadied just below $70 now around $68. But Trump’s tariffs will raise the price of steel pipe, the mainstay of oil production. Lay-offs in agencies working to allow leasing permits will only slow an already frustrating government process. Oil companies are not as sure of Trumps help as they were in post-election November.
The strategist did have some interesting observations about the world demand for energy. He showed photos of Ho Chi Minh City and Bankgog, Thailand in 1985. But today those cities are all aglow at night. Africa and India, photographed at midnight from outer space, lack that kind of lighting. The point is that there is a tremendous demand for energy.
Finally, both the left and right are coming to not just accept but cheer for nuclear energy. Microsoft just re-started a nuclear plant to power a data center. One may invest in either uranium miners URA or the metal itself at sprott.com. France has relied on nuclear plants for some 25% of its energy needs. Angela Merkel shut down Germany’s nuclear plants and that economy now pays some of the highest electric rates in the world.
The move to higher interest rates has been put on hold for the time being. With a $36 trillion national debt, it is hard to see how US rates will do anything longer term but increase.
For now expect the trend to lower stock prices to resume. But the energy sector long term is looking shall we say, brighter.