🚘 Auto manufacturers suffer

Together with Boxabl

Good morning investors! The market stays confused as we digest tariff-related news.

Today we cover:

• Student loan defaults are coming

• Auto stocks under pressure (and why GM is suffering the most)

• Lululemon earnings

📊 Economy and News 

Student Loan Defaults Surge as Borrowers Face Credit Hit

Student loan delinquencies are set to reach record highs, with over 9 million borrowers at risk of seeing their credit scores drop in early 2025. The latest report reveals that 15.6% of federal loans—totaling $250 billion—were past due by the end of 2024.

The end of the pandemic-era payment pause in September 2023, followed by the expiration of a one-year grace period in late 2024, has left many borrowers struggling.

While some have reduced their balances, a significant number remain in financial limbo due to non-payment and administrative delays tied to legal battles over repayment plans.

Delinquencies have severe credit consequences, with subprime borrowers losing an average of 87 points and those with excellent credit seeing drops of up to 171 points. Meanwhile, proposed changes under the Trump administration, including dismantling the Department of Education and pausing income-driven repayment applications, could further complicate debt management.

Global hits:

• Brazil’s inflation rate rises to 5.3% – a high of two years – with additional monetary tightening expected.

• U.S. liquidity likely to expand by $1.6tn in 2025, faster than last year.

• Barclays switches preference to global fixed income over equities on tariff risks.

US Recession? The IMF’s baseline forecasts do not envision a U.S. recession; however, Deutsche Bank sees ’material risk’ of U.S. entering recession.

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📈 Stocks

S&P 500 5,693.31 (-0.33%)
DJIA 42,299.70 (-0.37%)
NASDAQ 17,804.03 (-0.53%)
BRENT CRUDE 74.03 (-0.01%)
* Prices as of Mar 28th, 12:20 AM UTC

GM Takes a Hit as Trump’s Auto Tariffs Shake the Market

Shares of major automakers declined after former President Donald Trump announced a 25% tariff on all vehicles not made in the United States, set to take effect on April 2.

The announcement sent General Motors (GM) stock tumbling more than 6% in early afternoon trading, significantly underperforming Ford and Stellantis, which fell over 3% and 1%, respectively. Tesla, meanwhile, gained as analysts see the electric carmaker as a relative beneficiary due to its U.S.-based production.

The market reaction highlights the varying exposure automakers have to foreign production. GM’s reliance on Mexico and South Korea for manufacturing some of its small crossovers, including the Equinox and Blazer, has made it particularly vulnerable. Only 52% of GM vehicles sold in the U.S. during the first three quarters of 2024 were assembled domestically, compared to 78% for Ford and 57% for Stellantis.

Analysts at Wolfe Research and Bank of America warn that GM’s 15% reliance on South Korean imports adds another layer of risk. With its stock already down 13% year to date, GM faces pressure to adjust its supply chain strategy. Investors had previously expressed concerns about tariffs in January, a worry GM did not sufficiently address in its earnings report—leading to further declines.

As the April deadline approaches, automakers with significant foreign production may need to reassess their manufacturing strategies to mitigate the impact of Trump’s tariffs.

Shocking: ChatGPT’s viral image-generation AI is ‘melting’ OpenAI’s GPUs. Elsewhere, Novo Nordisk says copycat compounders are hurting Wegovy sales, may take legal action.

💵 Personal Finance

How to improve your credit score

With student loan delinquencies hitting record highs and threatening credit scores in 2025, here’s how to fight back.

1. Prioritize On-Time Payments: Set up autopay to avoid missed deadlines, which can slash your score by 87-171 points.

2. Tackle Outstanding Balances: Pay above the minimum to lower debt and boost your credit utilization ratio.

3. Monitor Your Credit Report: Check free weekly reports and dispute errors from administrative delays.

4. Diversify Your Credit Mix: Add a secured credit card, keep balances low, and pay it off monthly.

5. Stay Informed on Policy Changes: Research repayment options as federal relief may shift under new policies.

Act now to protect your score from the growing default crisis. Also, you can check this debt payoff calculator to plan better.

💰 Be a Better Investor

Resources:

• Calculators

• Retirement Resources

• Dividends

• Make Money in Retirement

• Side Hustle Ideas

• Stock Deep Dives

• Investing 101 videos

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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