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August PPI, Courts vs Trump & International Politics ?3

09:20 10-Sep-25

August PPI numbers are out at -0.1% for both the headline and core.  Services were down twice that much while good rose by a tenth.  American equity futures were already positive, and this isn't hurting, but the whipsaw from last month means this report is getting less attention than deserved, as usual.

Courts continue trying to reign in Trump, but the real turning point is likely to come around year end, when the SCotUS should be ready to give its accelerated ruling on two IEEPA tariff cases.  This guess is based on the anticipated trial start in the "first week of November" and the high court responding to the White House request for expedited review in less than a week.  If they are struck down, as I expect, the issue of what happens with already collected funds will be the $130b question.  Again, that is my guess, and it is on the low end.  Some pundits put the total as much as 3x higher.  Also, I doubt the court will provide complete clarity on refunds, but Bessent has stated that nightmare may be necessary.  The administration will likely pursue expanded section 232 and 301 tariffs in this case, but those will be harder to implement.  Finally, note that a lower court also found that Trump can't fire Cook yet, which should come as no surprise.

As another data point compounding the themes pointed out with Argentina, below, note the resignation of France's Prime Minister.

On 9/8/25 10:18 AM, Esekla wrote:

Yesterday's local election in Argentina resulted in a complete rout of Milei's LLA party, which garnered barely above a third of the vote.  This was flagged this as a concern by the main CrowdWisers service a month ago, and now the country's dollar bonds and currency are sinking, reflecting international concern that the leader will be unable to follow through on promises to maintain his economic policies, leading Argentina to reconfirm its historical status as a serial defaulter.  This is an example of the error index investors have been making when selecting European and emerging market selections in an effort to avoid exposure to American fiscal problems. On Friday this service wrote that political differences would continue exacerbating trade wars, and Trump's response to the EU Google fine shows that more granularity is necessary.

The other big news this morning is EchoStar selling the rest more of its spectrum to SpaceX for $17b, in a half cash/stock deal that also includes an extra $2b in interest coverage through November 2027 and use of the latter's satellites for Boost Mobile.  This move was tipped as the second step toward resolving FCC regulatory pressure almost two weeks ago.  It comes as the FCC accelerates the gutting of prior regulation, clearing the way for a wave of telecom M&A that this service has long anticipated.

This week's economic data should be dominated by CPI on Thursday morning, preceded by PPI a day earlier, and that will be the last major input to the Fed decision the following Wednesday.

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