Feb 26, 2025

I recently came across news surrounding the stock valuation of Costco, as discussed by fund manager Christopher Bloomstran. He expressed concerns about the stock being overvalued, with a high P/E ratio of 56.9 for a company with a 2.9% profit margin. Bloomstran compared Costco’s valuation to other stocks in his portfolio, highlighting discrepancies in multiples and expected returns. Additionally, he drew parallels between the current market conditions and the dot-com bubble era, noting expensive valuations of large U.S.-based companies like Eli Lilly and Walmart.

The news also covered various market indicators, including weakening U.S. stock futures, Bitcoin trading below $90,000, and a decline in the yield on the 10-year Treasury. Corporate developments such as strong earnings from Home Depot, financial filing deadlines for Super Micro Computer, and addressing shareholder concerns by Hims and Hers Health were also mentioned. Private equity and venture capital deals, like funding rounds for companies such as Quantum Machines, Ethena, and Flow48, were highlighted, indicating continued activity in the market.

Another news update I came across involved the renegotiation talks surrounding the acquisition of AK Steel by Nippon Steel. The talks have been complicated, with both Nippon and U.S. Steel suing the Biden administration for blocking the deal without conducting a national security review. Former President Trump’s stance on the deal was also mentioned, highlighting the legal challenges and complexities surrounding the acquisition. Additionally, President Trump’s initiation of a second trade war, imposing tariffs on various goods from China, Mexico, Canada, steel, and aluminum, was discussed, raising concerns about its impact on the economy.

Furthermore, I learned about the proposal for “reciprocal tariffs” as part of the U.S. trade policy, which involves retaliating against foreign tariffs or trade barriers based on factors like foreign value-added taxes. The potential implementation of these tariffs on countries like the EU, UK, Japan, and others could significantly impact various industries and supply chains, reshaping trade relationships and raising overall tariff rates. The news also discussed the risks associated with carry trades and basis trades in the financial markets, highlighting challenges faced by hedge funds and non-bank trading firms in navigating market volatility and regulatory oversight.

Stay Well!