This week in the Steady Investor, we focus on the most recent market drivers and the new risks emerging from this week’s data, including:
The Supreme Court Hears Arguments on the Legality of Tariffs – This week was a critical one for a key facet of the Trump administration’s economic policy. In a highly anticipated court case, the Supreme Court heard initial arguments this week on whether the administration lawfully used the International Emergency Economic Powers Act (IEEPA) to levy sweeping, “reciprocal” tariffs. Several justices pressed the government on Congress’s constitutional power over taxation and whether IEEPA’s authority to “regulate” extends to open-ended tariffs. That line of questioning suggests the Court could curb (or overturn) the current regime, but at the same time, the Court has been deferential to executive authority so far in this term. Investors are watching this case closely, as a ruling against the Trump administration would deem tariffs illegal and may result in the refunding of levies collected, a plus for retroactive and future earnings. It’s important, however, not to read too deeply into what a loss for tariffs would do. Which is to say, it would not end tariff uncertainty. Administration officials have already suggested alternative statutes, most notably Section 232 (national security) and Section 301 (unfair trade practices), as other routes they would take to levy tariffs. These are narrower and more procedurally encumbered than IEEPA, but still usable. Put another way, even if the Court clips emergency powers, some form of tariff risk likely lingers with scope and timing dependent on which tools the administration reaches for next.1
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Will Cheaper Financing Not Even Fix the Housing Market? Some builders are turning to lower rate offers to sell newly constructed homes. But early data indicate it’s not moving the needle on demand as much as expected. Indeed, new-home supply is stacking up, hinting that rate cuts alone won’t revive housing demand. Many large builders front-loaded construction for a 2025 rebound, but are now sitting on inventory even as they offer buydowns (e.g., ~4% teaser rates), sizable price incentives, and closing credits to clear lots. Completed-but-unsold new homes have climbed to their highest level since mid-2009. To be fair, this is not a story about the entire housing market, as new homes are roughly one-fifth of transactions. But it does offer a data point on overall demand, since builders must price to move finished units. By contrast, would-be sellers in the resale market can delist or rent rather than accept lower offers, helping keep overall prices elevated even as underlying demand softens.Multiple frictions are at work beyond mortgage rates: more resale competition in some metros, a pullback from foreign buyers (visa uncertainty), softer hiring for higher-pay roles in select regions, and investor caution. The takeaway is that while promotional 4% mortgages and price cuts help at the margin, affordability, jobs confidence, and local supply dynamics are steering the economics. Until mortgage rates make a more durable break lower and labor-market worries ease, we’ll likely see a slow thaw rather than a quick snap-back in new-home sales.3
The Jobs Markets is Holding Up, But Looking Shakier – Private payrolls squeaked out a gain in October, but the details were split. Private payrolls firm ADP reported +42,000 new jobs for the month after a September dip, with hiring concentrated at large firms (250+ employee businesses added ~76,000) while small businesses shed about 34,000. Pay growth stayed steady, with +4.5% y/y wage increases for people who stayed at their jobs.At the same time, Challenger (another private payrolls data firm) reported a sharp jump in announced layoffs (~153,000 in October), led by tech restructuring tied to AI adoption, with cuts also popping up in select consumer areas and nonprofits. Historically, we know that these data reports are volatile and don’t always flow through one-for-one to actual separation. State jobless claims, for instance, are still publishing during the government shutdown and haven’t shown a similar surge.For markets, this points to a labor market that’s loosening, with maybe enough softness to keep the Fed open to further easing.4
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