Liz Pancotti

Data center CapEx, tariffs, and the Iran war are creating supply-chain strain and commodity price pressure, with aluminum and copper specifically cited as markets already in turmoil from these combined demands.

The AI data center buildout is so large that the economy may be heading back into a 2022-23 style chip shortage because there are not enough memory chips to serve consumer electronics, autos, and data centers simultaneously.

The Iran war has no durable end, so the pressure on oil prices is here to stay, and the effects will flow into plastics, fertilizers, and groceries over the coming year.

The jobs report showed a loss of 92,000 jobs. Simultaneously, gas is approaching $4/gallon, and new 15% tariffs (Section 122) will hit consumer goods in 6-9 months. The consumer is facing a "double whammy": loss of income (weak labor market) and rising costs (energy inflation + tariffs). Discretionary spending power is being evaporated. Short Consumer Discretionary and Retail. The "stagflation" narrative (high prices, low growth) kills retail margins and volume. The Fed cuts rates aggressively to save the labor market, stimulating a consumption rally.

The jobs report showed a loss of 92,000 jobs. Simultaneously, gas is approaching $4/gallon, and new 15% tariffs (Section 122) will hit consumer goods in 6-9 months. The consumer is facing a "double whammy": loss of income (weak labor market) and rising costs (energy inflation + tariffs). Discretionary spending power is being evaporated. Short Consumer Discretionary and Retail. The "stagflation" narrative (high prices, low growth) kills retail margins and volume. The Fed cuts rates aggressively to save the labor market, stimulating a consumption rally.