SHOCKING REVERSAL: White House SLAMS Bloomberg, Confirms MASSIVE Tariffs on Mexico, Canada, and China!

BREAKING: White House contradicts Bloomberg and says that 25% tariffs on Mexico and Canada, and 10% tariffs on China, will start Feb 1

Welcome to KPA Wealth Weekly, your source for the latest in financial and mortgage markets. Each week, we share economic updates, rate trends, and tips to build a strong financial foundation.

Let’s dive into this week’s highlights!

• Mortgage Interest Rates

• Stock Market Update and Trends

• Financial Numbers This Week

• Real Estate: Buy or Sell?

• This Week’s Wealth Strategy

Mortgage Interest Rates

Stock Market Update and Trends

The White House confirmed that 25% tariffs on Mexico and Canada and 10% on China will take effect on Feb 1, contradicting earlier reports of a delay. Markets are reacting sharply, with stocks plunging and the Mexican peso and Canadian dollar tumbling.

This week, the stock market experienced significant volatility, primarily due to the emergence of DeepSeek, a Chinese AI company that introduced an advanced, cost-effective language model. This development led to a substantial sell-off in technology stocks, with Nvidia's market capitalization dropping by 17% and the Nasdaq index experiencing notable declines. Investors expressed concerns that DeepSeek's efficient AI model, which utilizes older Nvidia GPUs, could disrupt the current AI hardware market and challenge the dominance of established tech giants. In my opinion, this is all BULLONI. China has lied before for their benefit, and it is highly expected that this is also some more China lies.

Key Takeaway: Buy stocks when they dump on these whacky news

Notable Earnings This Week:

This week’s earnings reports brought a mix of wins and challenges across industries. Here's a quick summary:

Apple Inc. (AAPL): Reported record quarterly revenue of $124.3 billion, a 4% increase year-over-year, despite a slight decline in iPhone sales. Shares rose 4% following the announcement.

Microsoft Corporation (MSFT): Surpassed Q2 expectations with earnings per share of $3.23 and revenue of $69.6 billion, driven by significant growth in its AI and cloud services. The stock climbed 4.2% post-earnings.

Meta Platforms Inc. (META): Announced a 10% rise in Q4 revenue, fueled by strong advertising sales and an AI user base reaching 700 million. Shares increased 3.5% after the report.

Tesla Inc. (TSLA): Posted a 20% increase in Q4 revenue, attributed to higher vehicle deliveries. Despite the positive results, shares declined 3% amid concerns over narrowing profit margins.

Chevron Corporation (CVX): Reported a rise in quarterly revenue to $52.226 billion, but missed profit estimates with adjusted earnings of $2.06 per share. The company logged its first refining loss in four years, leading to a 3.9% drop in stock price.

Even solid results weren’t always enough to satisfy investors, showing how forward guidance can heavily influence market reactions.

Financial News This Week

Here’s a concise summary of this week’s financial news:

Housing Market:

• The average rate on a 30-year mortgage decreased for the second consecutive week, now at 6.95%, offering minimal relief to prospective homebuyers.

• PulteGroup reported robust quarterly results, exceeding expectations and projecting stability for 2025, despite challenges in the U.S. housing market.

Personal Consumption Expenditures (PCE):

• The PCE price index, the Federal Reserve's preferred inflation measure, increased by 0.3% in December, bringing the annual rate to 2.6%. The core PCE, excluding food and energy, rose by 0.2%, maintaining a 12-month rate of 2.8%.

Federal Reserve Meeting:

• On Wednesday, the Federal Reserve maintained its benchmark interest rate between 4.25% and 4.50%, removing the reference to progress towards the 2% inflation goal. Fed Chair Jerome Powell emphasized a "wait and see" approach, indicating that the central bank is monitoring policy impacts on inflation, employment, and the broader economy before making further adjustments.

The housing market remains tight, inflation shows modest increases, and the Federal Reserve is adopting a cautious stance, awaiting further economic data before deciding on future policy actions.

Real Estate: Buy or Sell?

Reasons Real Estate Looks Solid:

Strong Demand:

• December existing home sales rose 2.2%, showing steady buyer interest.

• Homebuilders remain optimistic, with PulteGroup reporting strong quarterly results despite affordability concerns.

Tight Inventory:

• Inventory remains well below pre-pandemic levels, limiting supply.

• Median home prices continue to rise, supported by low housing stock.

Positive Trends:

• The 30-year mortgage rate declined slightly to 6.95%, offering some affordability relief.

• Homebuilder earnings suggest market stability heading into the crucial spring selling season.

Red Flags to Consider

Mortgage Rates:

• While rates have eased, they are still elevated compared to pre-2022 levels, keeping affordability tight.

Economic Uncertainty:

• The Federal Reserve held rates steady this week and signaled a “wait and see” approach, delaying potential rate cuts.

• The Core PCE inflation measure ticked up slightly to 2.8% YoY, keeping pressure on borrowing costs.

Conclusion

The real estate market remains stable due to low inventory and steady demand, but affordability challenges persist. Future conditions will depend on rate movements and broader economic trends in the coming months.

This Week’s Wealth Strategy

Most people think building wealth is about saving and investing in stocks, but smart investors use a strategy called “Capital Stacking” to multiply their money faster. Here’s how it works:

1. Use Smart Debt to Buy Assets

• Instead of saving for years, use low-interest loans to buy income-producing assets like rental properties, dividend stocks, or businesses.

• Example: A $50K down payment lets you control a $250K rental property, generating cash flow, tax benefits, and appreciation.

2. Use Cash Flow to Fund More Investments

• Reinvest profits from your first investment into another. One asset should help fund the next.

• Example: A rental property’s income covers a second down payment or stock investments.

3. Minimize Taxes to Keep More Money

• The wealthy don’t just make money—they keep more of it by using tax advantages.

• Example:

  • Real estate depreciation can reduce taxable income.

  • Roth IRAs grow tax-free.

  • Cash-value life insurance allows tax-free borrowing.

4. Invest in Overlooked Income Streams

• Wealth isn’t just stocks and real estate—alternative income sources are hidden gems:

  • Turo (Car Rentals) – Buy cars, rent them out for passive income.

  • Private Lending – Lend money for real estate deals at 8-12% returns.

  • Digital Assets – Buy cash-flowing websites or automated businesses.

5. Compound & Scale Wealth

• Reinvest, don’t spend. The key to long-term wealth is using compounding and leverage:

  • Borrow against life insurance to invest tax-free.

  • Use dividends from index funds to buy more shares.

  • Leverage seller-financing to buy real estate with little upfront cash.

Final Takeaway

Most people only use one method to build wealth. The rich stack income streams, reinvest smartly, and use tax advantages. Start small, reinvest often, and scale up!

Thank you for reading! If you found this newsletter helpful, please share it with anyone who might benefit. Stay tuned for 1-2 posts every week with the latest market updates and insights.

Kyle Allgair
CEO of KPA Home Loans
📞 (279) 977-8149 | ✉️ [email protected]
🌐 KPAhomeloans.com

Kyle Allgair is the CEO of KPA Home Loans, with years of experience helping clients build wealth through real estate and strategic financial planning. Contact him for personalized advice on achieving your financial goals.