BA sudden change of tune on the trade front — just this hour.
BWalter Bloomberg, the aggregator account, is posting that Trump said Canada has been treating us nicely lately.
ANicely? After the tariffs, the border threats, the whole fifty-first state routine?
BThat's the line. Now, we can't confirm the quote independently — this account's been burned before, once pushed a false tariff-pause headline.
ARight, so treat it as a rumor until a real source picks it up. But if it's true? That's a genuine turn.
BHe's been hammering Canada for months. Called the prime minister 'governor.' Now they're being nice?
AMaybe a deal's close. Maybe someone finally showed him what the auto plants are saying about a parts shortage.
BOr maybe it was just a good phone call. One nice sentence doesn't end a trade war.
AFair. But the market will read it that way if it's confirmed. Watch the Canadian dollar and the autos.
BSpeaking of markets, the Fed meets Wednesday — and the real question isn't trade, it's rates.
BFrankie Financials posted a chart on X: what the S&P 500 did in the twelve months after the first rate cut of every cycle since 1995.
AAnd what'd it show?
BTwo worlds. If no recession followed, stocks averaged roughly 18 to 21 percent higher. If a recession did follow? Much weaker — often negative.
AWell, sure. A recession means earnings fall. A rate cut doesn't save you from that.
BBut here's the thing — the first cut usually comes before anyone knows if it's a recession. So the market's betting blind.
ANo, it's not betting blind. You look at the labor market, credit spreads, what the Fed says. The chart is just hindsight.
BThat's exactly my point! The chart tells you the stakes. If the Fed cuts Wednesday and we dodge a recession, history says stocks did well.
AAnd if we don't dodge it, you're sitting on a loss and the cut didn't help.
BSo what, the Fed shouldn't cut? Is that your argument?
AI'm not saying that. I'm saying the chart is interesting but it doesn't tell you what to do. It tells you what already happened.
BNo, it tells you the distribution. Eighteen percent when it works, negative when it doesn't. That's not noise.
AI'll give you that — the gap is real. But you still have to make the recession call. That's the hard part.
BFine, but the framework gives you the question. Are we in a soft-landing world or not?
AAnd that question's been wrong before. In 2001 and 2007, the first cut came and recession followed anyway.
B2001 had a tech bubble imploding, 2007 had a housing bust. Neither is what we have now.
ANo, now we have AI spending that's starting to worry people and a credit market that's showing cracks.
BOh, come on — the AI buildout is not the same as subprime.
AI'm not saying it is. I'm saying the chart doesn't answer the question it pretends to answer.
BIt answers it better than nothing. Before the cut, at least you know the average outcome.
AAnd you only know which one you got a year later. That's my whole point.
BWhichever way it goes, someone's going to pull out this exact chart and say they saw it coming.
AThat's the safest prediction of all.