The session began with a lot of bluster and chest-thumping from both sides of the border but ended with niceties and deals.

Mexico stepped to the plate first with a comprehensive package that includes 10,000 national guards to prevent drug trafficking.

Canada needed a second phone call to decide whether to raise $1.3 billion for the border and 10,000 frontline personnel.

In these overtures, Mexico and Canada agree to a 30-day extension on tariffs.

Friends Making Nice

The Art of Caving

Mexico blinked first, and as a result, its market outperformed the rest of the world. We’ll see if Canada rebounds today.

Rocky Session

Yesterday, six sectors were higher when the dust settled at the closing bell, but Technology (XLK) and Consumer Discretionary (XLY) weighed heavily on the S&P 500.

Market breadth was ugly, but volume was light. It was a session that could have been much worse.

Manufacturing Breakthrough

After twenty-six consecutive months of contracting, manufacturing has rebounded into expansion in America. And nobody was whining about tariffs.

Turning the corner on manufacturing would be huge. All the key components moved in the right direction, especially employment, which surged from 50.3 to 45.4 in the prior month.

In addition, Prices Paid at 54.9 from 52.5 is a red flag.

Now, the Atlanta Fed sees first quarter Gross Domestic Product (GDP) at 3.9%.

Palantir

Palantir Technologies (PLTR) reported results that blew the cover off the ball. The company delivered records across the board, and the shares surged more than 20% in after-hours trading:

• 36% year-over-year (YoY) GROWTH IN Q4
• 31% YoY GROWTH GUIDE FOR FY25
• 52% YoY GROWTH IN US REVENUE
• 81% RULE OF 40
• $5.2B IN CASH & NO DEBT

“We are still in the earliest stage, the beginning of the first act, of a revolution that will play out over years and decades.” — Palantir CEO Alex Karp

Today’s Session

We are taking a massive profit on Palantir Technologies Inc. (PLTR) in the Hotline Model Portfolio (we would buy back under $90) and looking to redeploy.

Today’s reason to hide under the blankets is China which announced higher tariffs on US oil and gas exports. It’s the proverbial drop in the bucket.

• 4 million metric tons of natural gas out of 87 million exported in 2024.
• China is the tenth importer of oil from the United States. 

Bejing is also probing big US tech companies.

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