Wall Street’s trying to shrug off last week’s concerns

Summary

Marketplace Morning Report: Wall Street’s Trying to Shrug Off Last Week’s Concerns Release Date: February 24, 2025

In this episode of Marketplace Morning Report, hosted by Nova Safo in place of David Brancaccio, listeners are guided through the latest developments in the financial markets, economic indicators, and international affairs. The episode delves into Wall Street’s resilience amidst recent economic worries, the Trump administration’s controversial move to dismantle the U.S. Agency for International Development (USAID), and the unfolding political-economic landscape in Canada following Prime Minister Justin Trudeau’s resignation.

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Wall Street’s Resilience Amid Economic Uncertainties

The episode opens with a discussion on Wall Street’s modest upward movement despite a series of concerning economic indicators released last week. These indicators include a significant decline in service sector business activity reaching a two-year low and a dip in consumer sentiment driven by rising inflation expectations, which experts warn could become self-fulfilling.

Julia Coronado, founder and president of Macro Policy Perspectives, provides expert analysis on these developments:

• Impact on Confidence: "It certainly is a worry that perhaps some of the uncertainty around policies is starting to bite into confidence, both business confidence and consumer confidence." [02:15]

• Consumer Spending Risks: She elaborates on the potential for reduced spending if consumer concerns about inflation and job security persist. "The one tomorrow is going to be more reflective of the job market. Are consumers worried about their jobs? And that tends to be a bigger deal if consumers are really worried about the job market, then you do tend to see some follow through into spending." [05:42]

Coronado emphasizes the importance of upcoming data releases, including Home Depot’s outlook and new consumer confidence statistics, which will provide further insights into the durability of the current market sentiment.

Trump Administration’s USAID Dismantling Sparks Controversy

Transitioning to international affairs, Nancy Marshall Genzer reports on the Trump administration’s decisive actions to dismantle USAID. The administration has initiated significant layoffs, placing most workers on administrative leave and terminating approximately 1,600 employees based in the U.S. working abroad. This move follows a federal judge's refusal to extend a temporary restraining order that would have delayed the plan.

Key points from Genzer’s report include:

• Scope of Layoffs: USAID has placed most of its global personnel on administrative leave, retaining only those deemed essential for mission-critical functions.

• Union Pushback: "Democracy Forward, a nonprofit representing the unions, says it will continue to pursue all legal options." [11:30]

• Voluntary Return Program: The administration is offering a paid voluntary return program for affected employees.

These actions have sparked significant backlash from employee unions and advocacy groups, highlighting the contentious nature of the administration’s policies toward international development efforts.

Canada’s Political and Economic Turmoil Post-Trudeau Resignation

The episode further explores Canada’s current political and economic challenges following Prime Minister Justin Trudeau’s resignation in January 2025. Sam Gru from the BBC provides an in-depth look into how economic frustrations, particularly in the housing market, have influenced political dynamics.

Key Highlights:

• Housing Affordability Crisis: Sha, a Toronto resident, underscores the dire housing situation: "I never expect to own a house. Ever. I know that here in Canada, house prices are astronomical..." [15:50]

• Leadership Contest Focus: Former Bank of England Governor Mark Carney and other leadership contenders are prioritizing economic reforms and addressing the threat of U.S.-imposed tariffs on Canadian automobiles.

• Economic Stagnation: Dr. Stuart Prest, a political science lecturer at the University of British Columbia, comments on the lack of productivity growth: "We don't have a sense that the economy is becoming more productive over time." [19:10]

• Public Services and Immigration: The interplay between rising immigration rates, limited housing, and strained public services is discussed. Realtor Anya Ettinger highlights the connection: "We only have so much land, we only have so much space... so many people coming that our population will grow. But the amount of housing that we have does not." [21:45]

• Cost of Living Pressures: Nazim, an immigrant from Azerbaijan, expresses concerns over a proposed 20% reduction in permanent residency numbers and the ongoing rise in living costs: "The pricing, like with the groceries, like with the renting, all prices are up." [23:30]

The segment concludes with Dr. Prest emphasizing the critical need for the incoming Prime Minister to address cost of living issues: "There is no question that whoever is Prime Minister next is going to have to find a way to deal with concerns with cost of living." [25:00]

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Conclusion

This episode of Marketplace Morning Report provides a comprehensive overview of the current economic landscape affecting both the United States and Canada. From Wall Street’s cautious optimism and the Trump administration’s controversial policy shifts to Canada’s housing affordability crisis and political instability, the report equips listeners with essential insights into the factors shaping the global economy.

For more in-depth analysis and updates on these topics, subscribing to the Marketplace newsletter is recommended.

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Notable Quotes:

• Julia Coronado: "It certainly is a worry that perhaps some of the uncertainty around policies is starting to bite into confidence, both business confidence and consumer confidence." [02:15]

• Democracy Forward Representative: "We will continue to pursue all legal options." [12:05]

• Sha (Toronto Resident): "I never expect to own a house. Ever. I know that here in Canada, house prices are astronomical..." [15:50]

• Dr. Stuart Prest: "There is no question that whoever is Prime Minister next is going to have to find a way to deal with concerns with cost of living." [25:00]

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Disclaimer: All timestamps are approximations based on transcript segments.

Transcript

[Ryan Reynolds]

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See full terms@mint mobile.com Wall Street's trying to shrug off last week's concerns for Marketplace. I'm NovaSafo in for David Brancaccio. Markets opened slightly higher this morning after a spate of worrisome economic numbers caused a tumble on Friday. Those include a decline in service sector business activity to a two year low and consumer sentiment showing rising inflation expectations which can be self fulfilling. Joining me to discuss all of this is Julia Coronado, founder and president of Macro Policy Perspectives. Good morning, Julia. Good morning. So are you concerned about the data that's come in so far? Yes, it certainly is a worry that perhaps some of the uncertainty around policies is starting to bite into confidence, both business confidence and consumer confidence. Confidence isn't always a leading indicator of what firms and consumers actually do. Sometimes they keep spending, but it is certainly a risk. Another source of worry last week was that some consumer facing companies were also sort of suggesting that consumers were backing off a little bit on the back of these worries. Yeah, and we did get that muted outlook from Walmart last week. Tomorrow we hear from Home Depot and then we're also going to get consumer confidence data tomorrow. What are you going to be looking for in all these points of data that are coming in? The one we got Friday is most centered on inflation. And as we saw, consumers are very worried about inflation. The one tomorrow is going to be more reflective of the job market. Are consumers worried about their jobs? And that tends to be a bigger deal if consumers are really worried about the job market, then you do tend to see some follow through into spending. So we'll see if tomorrow's number holds up better. That will be an important signal. Julia Coronado, founder and president of Macro Policy Perspectives and a professor at the University of Texas, Austin, thank you very much. My pleasure. The Trump administration is moving ahead with the dismantling of the U.S. agency for International Development. It sent out a notice to the agency's workers yesterday. Marketplace's Nancy Marshall Genzer has the details. The USAID notice says as of 11:59 Eastern Time last night, most workers around the world would be put on administrative administrative leave with exceptions for designated personnel the agency says are responsible for mission critical functions, core leadership and or specially designated programs. USAID is also firing about 1,600 workers who are based in the US for agency employees stationed abroad, there's a voluntary return program paid for by usaid. This all comes after a federal judge ruled against the workers unions. They wanted him to extend a temporary restraining order delaying USAID's plan, but the judge refused. Democracy Forward, a nonprofit representing the unions, says it will continue to pursue all legal options. I'm Nancy Marshall Genser for Marketplace. This economy can be complicated. That's why the Marketplace newsletter makes understanding it all simple. Get smart takes on the week's biggest stories delivered to your inbox every Friday. No jargon, no hype, just economics you can use. Sign up [e-mail] subscribe Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month that I've been enjoying. It's not just for celebrities, so do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do. @mintmobile.com Switch upfront payment of $45 for 3 month plan equivalent to $15 per month Required intro rate first 3 months only, then full price plan options available, taxes and fees, extra default [e-mail] Canada's Prime Minister Justin Trudeau announced his resignation in January, paving the way for a party leadership contest ahead of a general election later this year. From Toronto, the BBC's Sam Gru has been looking at some of the economic forces behind the political drama. For Canadians like Sha, being able to buy a house tops the list of what he wants from Canada's next leader. I'm 39 years old. I never expect to own a house. Ever. I know that here in Canada, house prices are astronomical and I think that if we have a problem finding housing and jobs, I think it's a problem created by people running the country. Frustrations like these led to Trudeau's popularity sinking after nine years in charge and a calculation by some in his party that a fresh start was needed before the election. For the leadership contenders, like former bank of England Governor Mark Carney, the economy is front and center. Center, as is the threat of tariffs imposed by the US. We don't need their cars. You know, they make 20% of our cars. We don't need that. I'd rather make them in Detroit. But Canada's economic issues have deeper roots with a sluggish economy, squeezed incomes and falling productivity. Dr. Stuart Prest is a political science lecturer at the University of British Columbia. We don't have a sense that the economy is becoming more productive over time. Canadian industry leaders and Canadian political leaders continue to grapple with this question about how to reignite the economy in ways that can compete on a global scale. Public services are also under pressure, with long waiting lists for healthcare and pressure on housing. The population has been rising thanks to welcoming immigration policies, which are now resented by some, like these people in Toronto. We don't have enough housing for people as it is to begin with, and I don't think we need more people in this country. I think we just have to be more discreet about who we let in. Anya to reception, please. Anya. At the Toronto office of Anya Ettinger, the realtor describes how the two issues have become connected. Everyone's wanted to move here. So many people want to come here because it is the biggest city in Canada and with that demand, we aren't. We only have so much land, we only have so much space. So there's so many people coming that our population will grow. But the amount of housing that we have does not. Many new immigrants join the gig economy as delivery or taxi drivers like Nazim, who came to Canada from Azerbaijan a year ago. Now they say that they will cut the immigration numbers, and now I'm worried about that. The government wants to cut permanent residency numbers by 20% this year. Then there's the cost of living. The headline inflation rate has been falling, but people are still feeling the squeeze. The pricing, like with the groceries, like with the renting, all prices are up. Like if you see the economical difference between the pandemic and after, there are a lot increase in the pricing. Here's Dr. Stuart Prestigen. There is no question that whoever is Prime Minister next is going to have to find a way to deal with concerns with cost of living. Who that will be will be decided in March. In Toronto, I'm the BBC's Sam Grouet for Marketplace. And I'm Nova Safo with the Marketplace morning report from apm, American Public Media.