Markets are lower this morning, in part due to the president’s threatening new tariffs on any country that opposes his Greenland ambitions. President Trump has also announced that he will impose a 25% tariff on any country “doing business” with Iran. Per the Wall Street Journal, 96% of the costs of current tariffs are being borne by Americans and American importers – which contributes to the cost problems facing American families. Although overall inflation is at about 2.7% (annualized), housing costs have risen 3.6% over the past year and coffee is up 19.8% over the same period. And it’s important to remember that these current rising prices come on top of years of inflation. The rate of inflation is slowing down but is certainly not going negative.
Another reason for today’s sluggish markets is the fact that two of the three major stock-market indices are heading for psychologically important breakpoints, and investors are taking profits while thinking that stocks will stall at those levels. The Dow Jones Industrial Average, for instance, is nearing 50,000, while the Standard & Poor’s 500 is almost at 7,000. Last week those two indices danced up and down but didn’t quite cross the thresholds. Markets are still up for the year-to-date, even though it’s only been about three weeks. Markets were higher last year too of course.
According to Fortune Magazine, the United States’ national debt is now $38 trillion. The interest costs of carrying this amount of debt are approaching $1 trillion per year and will soon be larger than the annual cost of Medicare. Analysts are becoming concerned that interest rates on our Treasury debt, which are set by auction, will climb upward as we alienate the foreign countries which usually buy our debt. Last week the yield on the ten-year Treasury Note rose from 4.171% to 4.231%. Good for savers, bad for borrowers – like the U.S.
Alphabet, parent company of Google, has just joined the club of businesses worth $4 trillion each. Apple selected Google’s Gemini to power the iPhone’s AI features, including Siri. Optimism about Alphabet’s AI business helped Alphabet grow in capitalization.
Who is buying the fancy new iPhones that come with Google Gemini? Well, those at the top end of the K-shaped economy. The same people who are now paying the average new-car loan of $1,000 per month. The same people who have driven Delta’s premium-ticket sales UP by 9% while coach-seat sales have fallen by 2%. Those who are lucky enough not to care about the cost of coffee. And especially those who have not lost their Obamacare subsidies and are facing exponentially higher health-care premiums, or even no health insurance at all.
But here’s good news for all Americans: the 30-year standard mortgage cost has fallen to 6.06%. The last time mortgage rates were this low was September 2022. One year ago, the mortgage rate averaged 7.04%. Home sales rose 5.1% in December, even while finishing one of the worst years in decades for home sales.
There is concern about the falling American birthrate. And surely it is at least tangentially related to how expensive life has become. But in China, the population is shrinking, as deaths outnumber births for the third year in a row. China recorded 7.92 billion births in 2025, according to Newsweek, which was its lowest birth rate since record-keeping began in 1949.
If you’ve heard about how AI data centers are going to increase your electric bills, you may have wondered why YOU are paying for THEIR usage. But it’s not that simple. U.S. power demand in 2030 is expected to be 25% higher than in 2023, largely due to data centers. That means that utility companies will have to pay to expand their capacity, and all consumers pay for that. President Trump has made a proposal that the AI companies will have to take on a large part of the projected $1 trillion investment by utilities between now and 2029. Fingers crossed.
Coldwell Banker and the Wall Street Journal have projected that over the next ten years, more than $38 trillion (globally) will be passed down by 1.2 million individuals worth $5 million or more apiece. I wish I were one of the recipients, but I’m not. You?
For the week ending on January 16th, the Nasdaq Composite Index finished at 23,515, the Dow at 49,359, and the S&P at 6,940. The yield on the ten-year Treasury Note closed at 4.231%. U.S. crude oil cost $59.43 per barrel, N.Y. gold cost $4,685.15 per ounce, and one Euro was worth $1.17.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Yahoo Finance, Morning Brew, Barron’s, Franklin Templeton, USA Today, The Wall Street Journal, CNBC, Newsweek, Fortune, CNN, Bloomberg, Axios, The AP, 1440 Digest, ABC News, and Reuters. If you have questions, please call Diastole at 203.458.5220, or email ecook@dwinvest.com to reach me, Liz Cook.
The owner of the Los Angeles Rams, Stan Kroenke, is now America’s largest private landowner after he bought almost one million acres of New Mexico ranch land in December. That brings his holdings to 2.7 million acres, an area larger than Yellowstone National Park, or even the Dutton ranch (IYKYK). That amounts to roughly two million football fields. Going forward I am going to report the size of my lot in terms of football fields. Or fractions thereof. Anyone else?