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Portugal's Prime Minister Luis Montenegro looks on during the confidence motion at the parliament in Lisbon, Portugal, on March 11, 2025.
Hard Numbers: Portugal will likely vote (again), US markets swoon, A breath of fresh air, Baloch militants seize train, Trump trumpets Tesla
3/4: Portugal’s parliament has voted no-confidence in Prime Minister Luis Montenegro over a planned parliamentary inquiry into his business dealings. The result: Portugal will probably hold its third election in less than four years. A poll published this week found the opposition Socialists with a small lead over the governing center-right party.
214: On Tuesday, armed insurgents, acting on behalf of a separatist group in Pakistan’s Balochistan province, attacked and boarded a packed passenger train near Quetta. The militants claimed they were holding 214 passengers hostage. But local police said the majority of the passengers were believed to be safe and that 35 had been taken hostage.
4 trillion: From its peak in February, a US stock market sell-off has wiped out $4 trillion from the S&P 500. Many economists blame the meltdown on the potential inflationary impact of President Donald Trump’s growing number of tariff threat
7: Only seven countries – Australia, New Zealand, the Bahamas, Barbados, Grenada, Estonia, and Iceland – met World Health Organization air quality standards last year, data showed on Tuesday. The smoggiest five were the Democratic Republic of Congo, Pakistan, Bangladesh, Chad, and India.
50: On Monday, shares in the Elon Musk-owned electric vehicle maker Tesla were down more than 15% for the day and more than 50% from their peak three months ago. Shares recovered a bit on Tuesday, closing up 3.8%. Analysts place much of the blame for the losses on investors spooked by anti-Musk Tesla boycotts. In response, President Donald Trump pledged on Monday that he would buy a “brand new Tesla,” despite his past criticism of electric vehicles.
Staff remove bottles of US alcohol from the shelves of a Liquor Control Board of Ontario store as part of retaliatory moves against tariffs announced by President Donald Trump, in Toronto, Canada, on March 4, 2025.
Canada, Mexico, and China retaliate against Trump’s tariffs
It’s official: The United States is now waging a full-blown trade war against three of its largest trading partners. On Tuesday, Washington imposed tariffs of 10% on energy and 25% on all goods imported from Canada and Mexico and doubled its existing tariffs on Chinese imports from 10 to 20%. All three countries responded with harsh words and retaliatory measures.
Canada imposed an immediate 25% retaliatory tariff on $30 billion worth of US goods, with an additional $125 billion worth of products to be tariffed in 21 days. Provincial liquor stores removed American alcohol and Ontario Premier Doug Ford ripped up a $100 million contract with Elon Musk’s Starlink. Ford alsothreatened a 25% retaliatory tariff on electricity exports. Canadian Prime Minister Justin Trudeau called the tariffs “dumb,” prompting US President Donald Trump to repeat his taunt of “Governor Trudeau” and promiseeven higher tariffs in response to retaliatory efforts.
Mexico’s President Claudia Sheinbaum took a slower approach. “We have said it in different ways: cooperation and coordination, yes; subordination and interventionism, no,” she said. Sheinbaum plans to speak with Trump by phone on Thursday and will announce retaliatory measures on Sunday if no deal is reached.
China, meanwhile, placed an additional 10% to 15% tariffs on imported US goods, including chicken, wheat, soybeans, and beef as of March 10. Beijing says it will “fight to the bitter end of any trade war” but left the door open for talks, advising the US to “return to the right track of dialogue and cooperation before it is too late.”
The tariff war had immediate economic effects.Markets plunged, the price of a Dodge Ram truck reportedly rose from $80,000 to $100,000, and by mid-March American gas prices could rise by as much as40 cents per gallon, while Ford said the auto manufacturing sector in Canada could shut down.
Could Trump change course? We’ll be watching for further market volatility as well as blowback from consumers, businesses, and politicians. But stay tuned for a possible course correction: US Commerce Secretary Howard Lutnick already hinted Tuesday that Trump is considering “relief for USMCA-compliant goods” and “may roll back Canada and Mexico tariffs tomorrow.”
US inflation slows a bit
The Graphic Truth: US inflation slows a bit, but ...
The US inflation rate for August was released on Tuesday and the figures are sure to cause anxiety in the White House. Overall, the consumer price index, which measures a range of consumer prices, rose 8.3% from the same time last year – 0.2% more than many economists anticipated – though it’s down from 8.5% in July and 9.1% in June.
Indeed, the latest findings surprised many analysts who predicted that the drop in US gas prices in recent months – down from $5 a gallon in June to a current national average of $3.70 – is a sign that the economy is cooling across the board.
But that doesn’t seem to be the case. The ongoing war in Ukraine and related global supply chain issues have meant that food and energy prices remain sky-high. The US Department of Labor’s food index rose a whopping 11.4% in August year-on-year, up 0.8% since July – marking the largest increase since Sony introduced the walkman.
While Americans opting for alternative transportation (carpooling, public transport) may be contributing to weaker demand and lower gas prices, families have fewer options when it comes to food consumption. Even prices of no-frills staples like flour, butter, and potatoes are still on the rise.
What’s more, core inflation – which excludes notoriously volatile food and energy prices – continues to surge, suggesting that Americans are still grappling with too-high prices for commodities like medications, furniture, and new cars. Meanwhile, energy markets remain volatile as European efforts to ditch Russian natural gas have caused shortages and price shocks around the globe.
The CPI report shocked the markets, sending the Dow down nearly 1,300 points amid concern that the US Federal Reserve would continue to raise interest rates in order to cool the economy, resulting in investors pulling money from the markets. The Fed will hold its monthly policy meeting next week, and it is expected to again raise rates by 0.75 points, which would be its third three-quarter point hike in recent months.
Federal Reserve Chair Jerome Powell said in a keynote address last month that efforts to curb inflation would not be painless. He explained that the Fed would continue with its aggressive strategy despite fears that too much belt-tightening could lead to mass layoffs and recession.
Inflation has thwarted the US’ post-pandemic recovery for months and fueled President Joe Biden’s tanking poll numbers ahead of midterm elections this November. Things were starting to look a little better for the Democrats in recent weeks after Biden enjoyed several legislative successes. But more bad economic news could be a boon for Republicans who already have the strategic advantage of not belonging to the same party as the incumbent president.- Podcast: Inflation nation: How Larry Summers predicted skyrocketing prices in the US - GZERO Media ›
- Inflation nation: What’s driving US prices higher? - GZERO Media ›
- Larry Summers: Rising inflation makes society feel "out of control” - GZERO Media ›
- Why "cheap money" is worrying billionaire US investor Ray Dalio - GZERO Media ›
- No optimism after Austrian leader’s meeting with Putin on Ukraine - GZERO Media ›
- Want to help poor countries now? Open your markets to their farmers, World Bank chief tells wealthy nations - GZERO Media ›
- Are we in a recession? - GZERO Media ›
- Ask An Economist: How to lower inflation - GZERO Media ›
Retail investors playing key role in driving market volume
Betty Liu, Executive Vice Chairman for NYSE Group, provides her perspective:
What's been the role of the retail investor over the past few months?
So, US equity market volumes have been pretty high, remarkably high since the end of February 2020, and much of that is being attributed to the rise in retail investment activity. In fact, on peak market days, retail investors can account for up to a quarter of all market activity.
Is this the case for the options market as well?
So, absolutely. In fact, the options market has seen a spike in individual investment activity. That has driven volumes to record highs. So, eight of the top ten multi list options volume days have occurred in the first six months of 2020. So, pretty remarkable indeed.
Why more companies are going public now
Betty Liu, Executive Vice Chairman for NYSE Group, provides her perspective:
Over the past few weeks, more companies have been going public. Why is that?
Well, as you might recall, back in March, when we first saw the pandemic erupt, the markets were extremely volatile. And in fact, we triggered the market wide circuit breakers a total of four times between March 9th to 18th. At that time, you had some companies tap the capital markets to raise funds for short term funding needs, but there weren't a lot of IPOs. Now the markets are a little bit more calm, so to speak, and that means that the IPO window is opening. You've seen companies like Albertson's, Dun & Bradstreet and Lemonade go public in just the last few weeks.
What is the IPO window?
So, some analysts refer to this as the open window when private companies can tap the capital markets and go public. So, this window is usually at a time when the market conditions are more conducive to a company raising funds and going public. And that is exactly what is happening right now.
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