Absorbing less light than anything on Planet Earth, pure water is our planet’s clearest substance. It’s all about H20’s molecular structure, which frees light to shine through absent distortion. Outside of nature, credit for developing the next most transparent material goes to University of Colorado Boulder Professor of Physics Ivan Smalyukh. SiCellA, an aerogel, is 97-99% transparent, which compares to glass’ roughly 92%. Often described as “frozen smoke” or “solid air” because they’re incredibly light and porous, aerogels are also effective insulators. What makes Smalyukh’s SiCellA unique is it can be added to windows to boost thermal insulation, increasing a building’s overall efficiency. With it’s bonus of transparency, the Guinness Book of World Recordsrecognized as the clearest ever engineered: Incorporation into windows doesn’t impair the natural light that renders spaces bright and inviting.
What’s patently unclear is the global economy’s fate. Per policyuncertainty.com, what happened next in Uncle Sam’s neighborhood was so uncertain, it registered a normalized z-score of +3.0 last month. As recently as October, this stood at -0.5. Distinct policies elicit more uncertainty than the aggregate: Fiscal +3.7, Taxes +3.9, Health Care +3.4, Entitlement Programs +3.2, Regulation +3.9, and of course, Trade Policy at +10.0!
Even more predictable than polling is retailers pinning their missing the mark on sinking consumer sentiment. Consider yesterday’s gem from Target CFO Jim Lee “…declining consumer confidence impacted our discretionary assortment overall.” His counterpart at Best Buy, Matt Bilunas, echoed with: “consumer confidence…is showing a little sign of weakness at the moment.”
As for consumers, they’re keener to price swings in the wake of nearly $15 trillion in stimulus spending, a free-for-all that kicked off with Trump 1.0’s signing of March 2020’s Cares Act. Given this month’s University of Michigan (UMich) preliminary survey won’t hit until the 14th, RealClearMarkets (RCM)/TIPP Economic Optimism index will have to act as a stand-in. After brandishing optimism, north of the 50-line denoting expansion from November through February, March’s RCM/TIPP figure fell 4.2% month-over-month (MoM) to 49.8 making the 7.8% pullback since December the largest three-month decline since 2023 (green line).
Because RCM/TIPP poses forward-looking queries on the Economic Outlook, Personal Finances and Government Policies, it’s most comparable to UMich’s Consumer Expectations (orange line). Though there’s been some post-reopening divergence between the two series, prior co-movement flags a downward bias when UMich hits. Of course, consumers don’t always follow through on what they say they will do. This said, our conviction that they’re serious about their bout of reluctance was bolstered by a second straight miss on U.S. vehicle sales.
What’s unique to RCM/TIPP is that it surveys investors and non-investors separately. As of a few days ago (pre-tariff-announcement), the views of the two cohorts were moving in opposite directions. Investors’ interim peak was marked in December; subsequent volatility through February moved in tandem with vehicle sales (light blue line). Non-investors’ local high occurred in November, making the four-month move through March the largest on record (fuchsia line). If we had to guess, the wealth effect delayed investors’ moods souring, especially as the survey was conducted February 26-28, by which time non-investors were already paralyzed with fears over prices resuming their ascent.
We know we can’t start a trading day without donning our neck braces for fear of headline whiplash (“Now you see tariffs, now you don’t!”). Still, we’re shrewd enough to follow the lead of Detroit’s Big Three. They’ve had a taste of post-Covid profit manna – average transaction prices (ATPs) for new vehicles rose sharply post-supply-chain disruptions (blue line). That gets this year’s 3% giveback nowhere near its pre-pandemic trend line, 20-percentage-points of gains ago (dashed blue line), which suits Barra and her C-Suite (almost) equals just fine. This said, February’s 16.0 million seasonally adjusted annual rate (SAAR) is miles away from the 17.2 million SAAR pace that prevailed from 2015 to 2019 (red line).
With used car prices resuming their descent and tax refund season quickly slipping through their fingers, Detroit’s captains welcome any excuse to cut production. But wait! Threatened auto tariffs notwithstanding (apparently “imposing” ain’t what it once was when you’re about to slam the world’s 9th largest economy, a.k.a. Texas, into recession), autos are not (yet)oversupplied. Per Ward’s, U.S. light vehicle days’ supply edged down in February to 55 from January’s post-COVID high of 63. We hear you, but despite relatively benign supply, if tariffs cause a buyers’ strike, an imbalance in demand would be quickly evident.
Detroit’s CEOs lining up for a bailout any time this decade would likely prompt their replacement. They’d be in good company. Early Tuesday, Challenger, Gray & Christmas reported that the CEO exodus continued at 2025’s outset, with January clocking in at the highest for the month since Challenger began tracking CEO turnover in 2002. Smoothing CEO turnover to quarterly rates (pink bars) reveals the sharp uptick has been accompanied by rising household fear, specifically UMich Higher Unemployment Expectations for those with a college degree (purple line). In 2024, median weekly earnings for those with bachelor’s or advanced degrees were $1,543 and $1,901, respectively, compared to $1,056 for some college, $930 for high school graduates and $738 for high school dropouts. Should the former’s worries be realized, the multiplier effect on consumer spending vis-à-vis those down the income stack poses an appreciably clearer downside risk to both the U.S. domestic and, by extension, the global economy.