Monthly Market Debrief

Market Snapshot

Well, US inflation continued its upward trend in January 2025 (reported in February). This sent all the indexes into the red for February. The only red we like here at the Dollar Debrief is our branding (thank you, Jules). Market volatility also increased with constantly changing reports and statements from the White House regarding tariffs. The 25% tariffs on Canada and Mexico were on and off again like the couples on Love is Blind. They are currently on, kind of. 

Then, Trump admitted Americans “may have short term some little pain” during this trade war. This is a pretty different tone then his repeated claims that they are taxes on foreign governments, not US citizens.

On February 28th, the Personal Consumption Expenditures Price Index (PCE) came in at a cooler 2.6%, in line with analysts expectations. This matters because the PCE is the “Fed's preferred inflation indicator.” The PCE varies from CPI in what data they collect, how they collect it, and what model they use to determine the rate of inflation. The Fed prefers the PCE because it includes more items and better reflects consumer spending and trends. This bolstered the stock market on Friday after a brutal last week of February, and it increased investors' expectation for another rate cut this year, something we think would be a horrible idea.

From tariffs to last year’s rate cuts, I am not even going to try to predict what will happen in 2025. Having said that, I am going to predict that CPI will not come down below 3% for all of 2025. There are too many factors keeping it high. I would be willing to bet (not a lot) that there will be another rate increase before a rate decrease. As always, I hope I am wrong.

Company Highlight - Palantir

This section is dedicated to my friend who sold his stake in Palantir in February 2024 for a profit at $22 per share (it is now trading at ~$90). 

Palantir was the S&P 500’s best performing stock in 2024 with 340% growth. Founded in 2004, Palantir provides data analytics to companies and governments. They have been on the leading edge of AI, at least that’s what they want me to say. 

In September of 2020, Palantir listed on the New York Stock Exchange with a $20 billion valuation. By 2024, Palantir switched to the NASDAQ exchange with a $134 billion valuation. In the same year, Palantir was also welcomed into the S&P 500 replacing American Airlines. As a fan of Delta, I was thrilled to see American Airlines continue its decline. As a fan of capitalism, I hate seeing competition decrease in airline travel. 

Like every good tech company, Palantir is a master of saying many words that collectively mean nothing. For example: we make products for human-driven analysis of real-world data; we meet the problems where they live; we go where we’re needed most. 

So what does Palantir actually do? They apply their four platforms to support modernization efforts for governments, militaries, and companies. They have an AI Large Language Model (AIP) and three different operating systems (Gotham, Foundry, and Apollo). They essentially upload their software to analyze massive data sets to support their customer’s decision making. Governments (United States specifically) love the buzz words of Palantir. Nearly 60% of Palantir’s revenue is from government agencies.

The CIA’s In-Q-Tel venture fund is an early investor in Palantir. The CIA, NSA, and FBI have infamously large amounts of data on every human. Palantir helps them analyze it… I will let you ponder to what ends.

In December, the federal government upgraded Palantir’s rating for cloud computing services. This unlocks additional sensitive data that US government agencies can upload to Palantir’s servers. Investors were very happy with the news sending the stock up 7%.

Palantir has postured itself as a vital piece of the government’s modernization and AI efforts. Analysts see Palantir not as a victim of cost cuts but a beneficiary. Nevertheless, many believe the stock is far overvalued as it’s trading at 450 times historical earnings compared to the NASDAQ average of 42 times earnings. With DOGE on a tear cutting government spending and contracts, will Palantir fall victim or be spared?

Current Event - Department of Government Efficiency (DOGE)

This month’s news was dominated with DOGE in full swing slashing “fraud” (which is apparently defined as anything Trump and Elon don’t like). Don’t worry though, if Elon has a conflict of interest “he won’t be involved” according to Trump. The White House also clarified that Elon is not a part of DOGE… a claim exactly no one believed because Trump repeatedly says DOGE is “headed up by Elon.” The White House had to clarify (contradicting Trump) because Elon has a conflict of interest with nearly every government agency. The Office of Government Ethics states criminal statute 18 USC 208 “prohibits Government employees from participating personally and substantially in official matters where they have a financial interest.” So thank god Elon is not a part of DOGE. Otherwise, that would be illegal. 

It would be illegal if the CEO of a space internet company (Starlink) that was competing for a contract with the FAA, was able to see non-public information regarding a $2.4 billion contract to upgrade communications infrastructure at the FAA. Thank god Elon is not a part of DOGE. 

Elon had to correct himself because it is L3Harris technology that is failing, not Verizon.

It would be illegal if the CEO of a social media company (X.com) that has partnered with VISA to begin payment processing as a financial institution, cut the Consumer Financial Protection Bureau (CFPB) responsible for regulating, on behalf of consumers, financial institutions. Thank god Elon is not a part of DOGE.

It would be illegal if the CEO of a car company (Tesla) attempting to create the first driverless car, cut employees at the National Highway Traffic Safety Administration (NHTSA) investigating autonomous vehicles. Thank god Elon is not a part of DOGE. 

I am all for cutting government spending, but, call me radical, I would just prefer it be done by someone who dissolved themselves of conflicts of interest and sat before our elected officials to be confirmed. I don’t know, maybe like every other cabinet official. I guess I keep forgetting that Elon is not a part of DOGE. 

DOGE and DOGE JR look a lot like Elon Musk and his son. Weird. 

The “hard work” of DOGE cutting government spending is just for show though after the House passed a spending bill that will allow for $2.8 TRILLION in deficit spending. DOGE is using a spoon to bail water out of the boat while Congress uses dynamite to fix the holes in the boat. The Babylon Bee factually reported, “Republicans Clarify That Deficit Spending Only A Problem When Democrats Do It.” A lone Republican, Thomas Massie, actually cares about fiscal responsibility and voted against the bill. You go, Thomas Massie.

I know many of you (*dad*) are saying, “if this is so illegal, why aren’t there any lawsuits against DOGE?” There are already over 20 lawsuits with more inevitable.

Debrief on Deck

Next week, we will talk about Unilever. In the meantime, next time you pick up a bottle of anything, look for the Unilever label on the back. I’d bet you average 4 products per day from Unilever.