First quarter commentaries are now live!
This quarter, George Droulias talks about the importance of embracing uncertainty to get to Point B, while Frank Mullen discusses what to expect from credit investing at EdgePoint.
This week in charts
Free cash flow yield vs. return on investment capital
High income households investments and spending growth
Headline influence
S&P 500 Index sell side cuts
Chinese imports used in U.S. production
U.S. real GDP growth since 1801
U.S. dollar performance
Foreign investors selling U.S. stocks
U.S. private sector financial assets
Historical asset bubbles
U.S. vs. Global equities
California overtakes Japan to become the world’s fourth-largest economy
The Golden State’s nominal gross domestic product (GDP) reached US$4.1 trillion in 2024, according to preliminary data from the US Bureau of Economic Analysis, edging past Japan’s $4.02 trillion nominal GDP in the same period as recorded by the International Monetary Fund.
That means only the United States, China and Germany have larger economies than California, which outpaced all three countries with growth of 6% last year, according to the release.
“California isn’t just keeping pace with the world — we’re setting the pace,” Newsom said in a news release Wednesday. “Our economy is thriving because we invest in people, prioritize sustainability and believe in the power of innovation.”
But Newsom also warned that the state’s economic prowess is being threatened by “the reckless tariff policies of the current federal administration.”
California, America’s most populous state with some 40 million people, accounted for 14% of the nation’s GDP in 2024, according to government data, driven by Silicon Valley and its real estate and finance sectors.
Last week, Newsom sued Trump over his use of emergency powers to unilaterally enact sweeping global tariffs, which the governor said had hurt Californian families and businesses.
The lawsuit argues that Trump’s invocation of the International Economic Emergency Powers Act to enact tariffs was “unlawful and unprecedented,” and that such expansive action requires approval from Congress.
Through the IEEPA, Congress in 1977 granted the president broad authority to impose sanctions on countries, export controls, regulate financial transactions and freeze foreign assets under national emergency declaration, but it requires the Executive to consult and report to Congress when exercising these powers.
California engaged in nearly $675 billion of two-way trade in 2024, and counts Mexico, Canada and China as its top three trade partners, according to the state. Over 40% of Californian imports came from these countries, accounting for $203 billion of its more than $491 billion in total imports last year.
Twelve more states sued the Trump administration Wednesday for “illegally imposing” tax hikes on Americans through tariffs in a lawsuit the White House called a “witch hunt.”
This week’s fun finds
After the success of the joint intern moai a few weeks ago, Nikki wanted to run one solo on the last day of her internship. She decided to be a "jerk" about it and chose a tasty Jamaican-style meal. Thanks for the great food and all of your hard work!
'Kuchisabishii' Is The Japanese Word That Explains Why We're Eating Mindlessly
Do you find yourself wandering over to the fridge while in quarantine ― even when you’re not all that hungry? Have you been leaning into your favorite comfort foods a little more than usual lately? Sounds like you have “lonely mouth.”
For those unfamiliar, “kuchisabishii” is a uniquely Japanese word that literally means “lonely mouth” or “longing to have or put something in one’s mouth.”
