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Tariffs Redux, Techs Bounce, Inflation Up, Beer Down, Friendships Need Work

  • Writer: Doug MacGray
    Doug MacGray
  • 2 days ago
  • 6 min read

February 22, 2026


TARIFF TURMOILS REDUX: Late in the week, the U.S. Supreme Court struck down the Trump administration's use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs. Immediately thereafter, the Trump administration announced new global tariffs under Section 122 of the Trade Act of 1974 which authorizes the president to address "large and serious" trade imbalances with up to a 15% tariff on imports. The short-term impact of this activity was surprisingly muted in last week's trading, but lingering questions about the effects of all this will continue to be pondered as investors parse buying and selling decisions in the weeks ahead.


FOURTH QUARTER GDP DISAPPOINTS: According to the U.S. Bureau of Economic Analysis, the U.S. economy, as measured by gross domestic product (GDP), grew at an annualized rate of 1.4%, below what economists generally expected. Consumer spending grew at a healthy rate of 2.4%. Business fixed investments, which include equipment, commercial construction, and intellectual property, increased at 3.7%. Government purchases decreased by 5.1%. Federal government purchasing decreased by 16.6%.


U.S. INDUSTRIAL PRODUCTION DOES NOT DISAPPOINT: In January, U.S. industrial production increased by 0.7%, the largest monthly gain in about a year. Industrial production is now up by 2.2% for the past year. Manufacturing, one of the three components of industrial production, is up 2.5% over the past year and was up 0.6% last month. Though seemingly modest, that is the best 12-month growth rate since 2022 after the government reopened the economy. Hi-tech manufacturing was up 8.9% in the past year.


TECH BOUNCES BACK AND STOCKS GENERALLY RISE: Tech stocks have been struggling due to concerns (warranted concerns) about their high valuations. Investors shed those fears last week as Amazon (5.7%), Nvidia (3.8%), Apple (3.4%), Meta (2.5%), and others all had sizeable gains for the week. Since the beginning of November, the S&P 500 has bounced around without much movement at all (up 1.41%). The NASDAQ Composite is down -3.54% since November 1. An index that tracks international stocks generally (the MSCE All Country X US) is up 12.22% since November 1, and the Russell 2000 (small U.S. stocks) is up 7.44%. Last week, the Russell 2000 had another good week, up 1.83%.



LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.



PCE PRICE INDEX GOING THE WRONG WAY: The Fed prefers to watch the Personal Consumption Expenditures Price Index to determine the state of inflation in the U.S. In October, the one-year PCE Index number was 2.7%. In November, it moved up to 2.8%. In December, it rose again to 2.9%. December's PCE Index reading rose by 0.4% from the prior month. Before the next Fed meeting, the January PCE inflation reading is scheduled for release, so traders will be focused on that report to gauge what the Fed might do with interest rates during their March 17-18 meetings.


INCOME AND SPENDING INCREASED IN DECEMBER: In December, income for U.S. consumers increased by 0.3%, and spending rose by 0.4%. Private sector wages ended 2025 with a solid 3.9% gain.


GEOPOLITICAL EVENTS: Generally, such events have a short-term effect on stock and bond markets. But they are important to watch as they can trigger longer-term trends. And so we pay attention. Of course, the potential geopolitical event we are watching carefully is the U.S. and Iran "situation." The most obvious short-term effect would be on oil prices.


THE CONSOLIDATING CRAFT BEER INDUSTRY: The U.S. craft beer industry was on quite a roll until recently. Craft beer volume declined by 4% in 2024, and again by 5% in 2025. This after a smaller decline in 2023 which means three straight years of declining volume. The number of small and independent breweries is at about 9800, but again, for three straight years there have been more closures than openings. But the industry currently employs about 443,000 and contributes about $73 billion to the economy. It represents about 13% of the total beer industry. Most analysts are saying that this is not a decline but a "maturing" of the craft beer industry as it was on a boom for a while. Note that craft beer tends to be the typical mom and pop business. The greater alcohol industry is often under fire, and specifically avoided by faith based mutual funds, because "big alcohol" relies on people who probably drink way too much for a big portion of its profits. England's National Institute of Health reported that 68% of alcohol revenue came from "hazardous" or "harmful" drinkers. A Duke professor recently conducted a study and concluded that the top 10% of U.S. drinkers account from more than half of alcohol consumed. Thus, if you profit from an investment in a large alcohol producer, the argument goes, you are likely profiting from problem drinkers.


IN WHAT ORDER WOULD YOU PUT THESE?: In a recent survey, respondents in Germany, UK, and the USA were asked to rate in order the importance of the following personal values:

  • Family Life

  • Health

  • Making Money

  • Work-life balance

  • Safety-security

  • Freedom/independence

  • Friendships

  • Personal Growth

  • Faith/spirituality


Family life was number one in the UK and the US and number two in Germany. Germany put health at number one. Only the U.S. put faith/spirituality in its top five (number five). Both the US and the UK put making money as number three. Germany had health at number one, and it was number two in the US and the UK. Only the US put personal growth in its top five (number four). Only Germany put friendships in its top five. It makes me a little sad that friendships didn't get to the top five in the U.S. That might be part of our collective problem. My wife and I had dinner with dear, decades long, friends on Friday night. It is worth the effort.


HERSHEY: It was my granddaughter's third birthday, and we celebrated at Hershey Chocolate world. She loved it. I got a picture with Ginny the train conductor. (Hint: She's not real.)



Have a great week!


Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545




[I have more quotes than usual. I usually pull quotes from famous people who have just passed away, and this week we had at least two (see below), and I am doing the presidential quotes throughout this semiquincentennial year.]


"We're all travelers in this world. From the sweet grass to the packing house. Birth 'til death. We travel between the eternities." Robert Duvall (1931-2026)


"We must not measure greatness from the mansion down, but from the manger up. Jesus said that we should not be judged by the bark we wear but by the fruit that we bear. Jesus said that we must measure greatness by how we treat the least of these." Jesse Jackson (1941-2026)


"In time of peace there can, at all events, be no justification for the creation of a permanent debt by the Federal Government. Its limited range of constitutional duties may certainly under such circumstances be performed without such a resort." Martin Van Buren*


"Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions." Luke 12:15 (NIV)


*In commemoration of the 250th anniversary of the United States, I am finding a quote from a president each week, in order. This is the eighth week, and Martin Van Buren was our eighth president. SOURCES:

U.S. INDUSTRIAL PRODUCTION DOES NOT DISAPPOINT: https://www.ftportfolios.com/retail/blogs/economics/index.aspx

THE CONSOLIDATING CRAFT BEER INDUSTRY: brewerassociation.org, forbes.com; daily.sevenfifty.com; acclo.com; file:///C:/Users/Doug/Downloads/Refusing%20to%20Profit%20from%20Misery%20Eventide%20Report%20on%20Alcohol.pdf


(c) 2026 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.


SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.


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