The Week in Charts (2/19/25)

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The most important charts and themes in markets and investing…

1) Eggflation Is Back

The price of a dozen eggs in the US spiked to a new record high of $4.95 in January. Over the last 4 years, egg prices have increased 238%, the largest 4-year increase in history.

Here’s a look at the cumulative price increases over the past 4 years in other major categories…

2) Fed on Hold

The latest CPI report showed a 3% overall increase in prices in the last year, the highest reading since last May.

Core inflation of 3.3% was the 45th consecutive month above 3%, the longest period of elevated inflation in the US since the early 1990s.

Inflation expectations have been rising as well, with the 5-year breakeven rate moving up to 2.66%, its highest level since March 2023.

And the 3.5% increase in Producer Prices was the highest PPI reading since February 2023.

Actual inflation continues to drift further away from the Fed’s 2% target, with CPI since the start of 2020 running at a 4.2% annualized rate.

All the evidence of higher inflation is forcing the Fed to hold steady, with the market now pricing in a 97% probability of no change in rates when the Fed meets again in March.

3) Another Record High for Earnings

With 75% of companies reported, S&P 500 operating earnings are on pace to hit another record high (TTM), up 10% over the last year.

Helping propel earnings higher were Google and Amazon, who both reported record revenues and earnings:

• Google Q4 Revenues increased 12% over the last year to a new record high of $96.5 billion. Net Income increased 28% YoY to a record $26.5 billion. Operating margins moved up to 32% from 27% a year ago.

• Amazon Q4 revenues increased 10% over the last year to a new record high of $188 billion. Net Income increased 89% YoY to $20 billion, the highest quarterly profit to date. Operating margins increased to a record 11% from 7.8% a year ago.

4) Everything Is Up

Stocks, Bonds, Commodities, Real Estate, and Crypto. Everything is up so far in 2025…

There are now 9 US companies with a market cap above $1 trillion: Apple, Nvidia, Microsoft, Amazon, Google, Meta, Tesla, Broadcom, and Berkshire. Seven years ago there were none.

5) Why Home Price Appreciation Is Slowing

There are now 1.8 million active listings of US homes for sale, the highest inventory since June 2020.

Many homes are staying on the market longer as they are simply unaffordable to the average buyer. The monthly mortgage payment needed to buy the median priced home for sale in the US has nearly doubled over the last 5 years.

The combination of rising supply and collapsing demand due to a lack of affordability is leading to a slowdown in Home Price Appreciation, with prices increasing 3.8% over the last year. If affordability remains stretched and supply continues to increase, we should expect this rate to continue to moderate throughout 2025.

6) Cutting the Deficit

The US Federal Budget Deficit was -$2.1 trillion over the last year, the highest in 18 months.

In the 2020s we’ve been running deficits of over 8% of GDP, an unsustainable trend.

How did we get here?

With massive increases in spending that have widely outpaced the increases in tax revenue.

And how do we reduce the deficit?

By aggressively cutting spending, starting with waste, fraud and abuse.

On that front, in less than a month DOGE has already reported $55 billion in savings, with a new tracker that details each line item that has been cut.

7) A Few Interesting Stats…

a) The combined revenue of the Big 4 US tech companies hit a record $1.65 trillion over last 12 months:

• Amazon $AMZN: $638 billion
• Apple $AAPL: $396 bil.
• Google $GOOGL: $350 bil.
• Microsoft $MSFT: $262 bil.

That’s larger than the GDP of all but 15 countries.

b) Amazon’s AWS revenue in 2024 ($108 billion) was higher than the revenue of 468 companies in the S&P 500.

c) Auto insurance rates in the US have increased by 55% over the past 3 years. That’s the biggest 3-year spike since 1975-78.

d) The personal savings rate in the US averaged 4.7% in 2024. History since 1959…

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Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.

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