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see how the Market's going to take it all major averages we know posting losses in February NASDAQ coming off its worst month here since April of last year we're continuing the selling this morning despite the fears about the impact of tariffs our next guest continues to bet on the resilience of the American economy forecasting growth will slow during q1 perhaps Q2 before accelerating in the back half of the Year joining us is Ed yard Denny our Denny research president you're not worried about some of these data signals we're getting the latest just this morning on ISM new orders with a big slip yeah that was a bit of a setback to my thinking on the economy because the regional business surveys conducted by five of the 12 District fed District Banks actually suggested it would be stronger so uh we've got five Regional surveys looking better than the ism uh so I'm going to go with the the the Regionals because they support my view that the economy underlying it all is resilient look we just had three years where it was widely anticipated that we'd have a recession because the FED raised interest rates significantly and yet the economy remained resilient through all of that and I think uh we have to learn from that experience that perhaps the economy is going to remain resilient I think some of the weakness that we saw in the indicators for January had to be weather related it was the the coldest January since 1988 and so yeah I do think retail sales are going to snap back I think employment could be big up more than the consensus expects Maybe uh 200,000 obviously uh much will depend on how much of the Doge boys uh layoffs in the government are going to start showing up in the February data I think most of it's going to show up in the in the March data uh but all in all uh I think the economy is in fact going to demonstrate its resilience but it uh I think more of it's going to be be showing up in the second half of the year than the first half the first half we just got a lot of volatility around all the uncertainties Unleashed by Trump 2.0 well what about tariffs as they start to play out I mean just as an example Autos right Kelly Blue Book says the tariffs could raise the US average price of a car by $3,000 it's already $49,000 um the price of some full-size pickup trucks could shoot up by $10,000 what about the demand impact of tariffs here well I think we we have a fluid situation as uh the administ administration just characterized the Canada Mexico tariffs we'll see we still have a day before the tariffs go up to 25% on Canada and Mexico and I'm sure there's a lot of negotiations going on uh Mexico's already come back and said that they will slap the same tariffs on China as the United States is slapping on China so uh we may find that the whole situation looks somewhat different uh to tomorrow but I I think a lot of these uh uh tariffs are not retaliatory so much as reciprocal the idea is to to raise tariffs to mostly to match tariffs of our trading partners and then negoti negotiate them down so I think at the end of the day when uh this all settles out there'll be a lot of negotiations that actually lead to lower tariffs uh by our trading partners rather than a retaliatory situation as we had in the early 1930s with smooth Holly but I do wonder what that does for earnings right for companies that either have to absorb it or pass it along what it does for their spending plans as they try to figure out the new cost structure and try to figure out where the tariffs are going to hit next well it's not it's not good if these tariffs obviously are are permanent and persistent rather than transitory kind of reminds me of the discussion we had way back when on whether inflation was transitory don't use that word that's like a jinx word transitory sorry about that uh but uh yeah I think you're right I think in the short term here it creates a lot of uncertainty about earnings and we are seeing analysts lowering their earnings for the for the first quarter so they're obviously reading the newspapers reading the headlines watching you guys and uh recognizing that uh right now the way tariffs are going it's not good for the economy it's not good uh for the uh for earnings we did I would point out have record earnings in the fourth quarter and they were up 14% on a year-over-year basis analysts had first thought they'd be up 8% again showing the underlying surprising strength of the economy and the ability of companies to increase earnings and I think that's going to continue to be an offset to some of these other concerns in other words uh we we tend to pay a lot of attention to what's going on in Washington and Washington matters but we often forget to recognize how well the economy does despite Washington and that's kind of the the thesis I have is that the economy is going to prove to be resilient notwithstanding Washington all right Ed thank you for joining us with that dose of optimism today on another down Market Day Ed yard Denny
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