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Treasury yields showed little movement on Wednesday as investors anticipated further economic data and analyzed recent comments from U.S. President Donald Trump. The 10-year Treasury yield remained nearly unchanged at 4.568%, while the 2-year yield slightly decreased by about 1 basis point to 4.27%. Trump's actions on his first day included signing over 40 executive orders, notably withdrawing from the Paris Climate Agreement, pardoning individuals involved in the January 6 Capitol attack, and ending diversity programs. Additionally, Trump hinted at imposing significant tariffs on Mexico, Canada, and China, which has traders on alert for potential economic shifts. Investors are particularly interested in whether Trump will follow through with the pro-business policies he promised during his campaign. Meanwhile, the week's economic calendar includes housing data, and the World Economic Forum in Davos is currently addressing global issues.
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The U.S. housing market, already strained by high mortgage rates, low inventory, and soaring home prices, faces further challenges due to new tariffs on building materials. President Trump's 25% tariffs on goods from Canada and Mexico, key suppliers of softwood lumber and gypsum respectively, are set to increase construction costs significantly. The NAHB has highlighted that these tariffs could add $3 to $4 billion to construction costs, potentially pushing up home prices and making housing less affordable, particularly for first-time buyers. Despite a slight delay in the implementation of tariffs on Mexican goods, the threat of increased costs remains. The situation is compounded by a labor shortage in construction, exacerbated by immigration policies, and the potential for rising interest rates if inflation increases due to these tariffs. This could severely impact the spring housing market, affecting both new construction and the existing home market as potential buyers might have less disposable income for down payments.
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The concept of retirement is undergoing a transformation, particularly among millennials who are increasingly prioritizing living in the moment over traditional retirement goals. According to Michael Liersch from Wells Fargo, the focus has shifted from the end goal of retirement to enjoying life now. A 2024 report by Edelman Financial Engines highlights that 37% of Americans envision a retirement different from past generations, with many desiring an active and adventurous lifestyle, and 32% believing they will never fully retire. Despite their financial growth, with the median wealth of younger generations quadrupling and a 400% increase in seven-figure retirement accounts, millennials face immediate financial pressures like student loans, housing, and child care costs. This shift in priorities reflects a broader change in how younger generations view work and retirement, moving away from the traditional notion of stopping work entirely to seeking flexibility and the ability to choose their work in later years.
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Amundi, Europe's leading fund manager, announced that its quarterly inflows met expectations, driven by a robust demand for risk-averse investment products. In the last quarter of the year, the company saw net inflows of 20.5 billion euros, which helped push its total assets under management to a record 2.24 trillion euros, marking a 10% increase from the previous year. Notably, there was a significant influx into safe investment options like medium and long-term assets through ETFs and ETCs, with these products alone bringing in 10.5 billion euros in net inflows. This surge led to a 30% increase in ETF AUM, reaching 268 billion euros. CEO Valerie Baudson highlighted Amundi's strategic position in the market, expressing openness to acquisitions and noting the company's role as a potential consolidator in the industry. Amundi's financial performance was strong, with a 20.5% rise in adjusted net income to 377 million euros, surpassing analyst expectations. The company also achieved its 2025 strategic goals a year early, reflecting confidence in its future growth and market position.
