February Charts of Interest: Tariffs, Uncertainty, Eggs and More

Tariffs remain a hot topic for corporate executives. I show you just how much in this month’s charts of interest. Among the other charts I highlight are those focusing on how uncertainty affects stock prices, the shrinking number of “pure growth” stocks and rising egg prices. I hope you find this month’s charts of interest to be all it is cracked up to be.

Unsurprisingly, Companies Are Discussing Tariffs a Lot More

The term “tariff” or “tariffs” was cited by half of the S&P 500 index companies that reported earnings between December 15, 2024, and February 6, 2025. At 146 companies, “this marks the highest number of S&P 500 companies citing ‘tariff’ or ‘tariffs’ on quarterly earnings calls since [second-quarter] 2019 (155),” observed FactSet’s John Butters. “If the current pace continues through the remainder of the earnings season, the fourth quarter [of 2024] will record the highest number of S&P 500 companies citing ‘tariff’ or ‘tariffs’ on earnings calls for a quarter over the past 10 years. The current record is 185 companies, which occurred in [second-quarter] 2018.”

(The dates at bottom of the chart are very difficult to read. They range from the first quarter of 2015 on the left to the fourth quarter of 2024 on the right.)

Uncertainty Is Good for the Market

The stock market is often described as climbing a wall of worry. The chart below supports this. Fidelity’s director of quantitative market strategy Denise Chisholm writes, “While uncertainty might seem like a signal to de-risk, that approach looks problematic historically. More often than not, uncertainty has tended to be a tailwind for market returns. For investors, the choice is ironically clear—statistically speaking, it’s been better to embrace the unknown.”

More Value, Less Growth

The number of stocks in the S&P 500 Pure Growth index has fallen over the past several years. Meanwhile, the S&P 500 Pure Value index has seen more stocks added to it, according to Charles Schwab’s Liz Ann Sonders and Kevin Gordon.

The two indexes aren’t required to have a set number of stocks. The S&P 500 Pure Growth selects stocks based on sales growth, the ratio of earnings change to price and price momentum metrics. The S&P 500 Pure Value, meanwhile, uses a value score based on ratios of book value, earnings and sales to price.

How one defines growth and value matters. As Sonders and Gordon note, “There are times (like today) when huge differences in indexes and factors can lead to dramatically different performance dynamics.” This is why AAII encourages investors to look past an exchange-traded fund (ETF) or mutual fund’s name and see what its methodology actually is.

Bonds Are in an Extended Slump

The Bloomberg U.S. Aggregate Bond index remains in its longest downturn ever at 54 months, according to Charlie Bilello. The index measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market.

The cause for the slump is simple: Bond yields bottomed during the pandemic and then rose sharply as inflation surged. Since then, inflation hasn’t fully pulled back and neither have bond yields.

Expense Ratios Really Do Matter

Expense ratios are the most reliable predictor of whether a mutual fund will outperform or underperform. Morningstar’s Jeffrey Ptak, CFA, found “an almost perfect stair-step pattern” between expense fees and future five-year returns. The funds with the cheapest expenses ratios had the highest returns (cheapest 10%), while the fund with the priciest expense ratios (most expensive 10%) had the worst returns.

You can see a fund’s expense ratio and how it compares to its peers in AAII’s Fund Evaluator. Simply enter a fund’s name or ticker symbol into the search bar on AAII.com and then scroll down to the “Performance and Fees” section.

I’m Just the Messenger …

Here’s a chart from the St. Louis Federal Reserve’s FRED database highlighting the surge in egg prices. The avian flu has sent egg prices to a record high.

Not surprisingly, Waffle House recently implemented a $0.50 per egg surcharge on customer orders.