Markets in a Minute - Liberation Day?
By: Zac Martin
Author: Zac Martin, Senior Investment Analyst
Week Ending February 20th – Liberation Day?
The Employment Situation: Nonfarm payrolls for January increased by 130k, with the healthcare sector posting the strongest gains. This report was above the consensus estimate, however, the major news came from the annual 2025 revision. Indeed, the level of nonfarm jobs was revised downward in March by -898k, which changes the number of jobs added into the economy for 2025 to 181k, from 584k. Additionally, Health Care and Social Assistance has been a ballast for nonfarm payrolls over the last 7 months, chart below.
GDP Update: The Advanced Estimate for Q4 2025 Real GDP reported an increase of 1.4%, which was below analyst expectations by 0.5%. The largest detractor was Government Consumption, which is not unexpected given the government shutdown that occurred in November. Personal Consumption was 2.4%, which is a sequential decrease from Q3 but is inline with Q2 and longer running averages.
Tariff Turmoil: Friday morning the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose the tariffs. Therefore, tariffs that were enacted under this law during Liberation Day are invalid, however, President Trump has invoked section 122 in the Trade Act of 1974. This Proclamation imposes a 10% temporary import duty for 150 days. Initial market reaction was positive, however, markets on Monday (2/23) fell as additional tariffs were proposed over the weekend.
The Week Ahead:
- Consumer Confidence (2/24)
- Producer Price Index (2/27)
- Earnings: Several prominent earnings reports, NVDA (2/25) which is expected to report bottom-line YoY growth of ~70%. Additional reports for SaaS companies, CRM & WDAY (2/24) could be a market event given recent SaaS performance. Earnings for several large retailers are also scheduled for this week, HD (2/24), LOW & TJX (2/25).
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