🚘 New auto tariffs coming

and Dollar Tree with big announcements

Good morning investors! Stocks dipped on Wednesday, led lower by tech, as pressure on the tariff front mounted.

Today we cover:

  • New auto tariffs

  • Tech trouble

  • Dollar Tree makes major announcements

📊 Economy and News 

Welcome new tariffs

President Donald Trump announced a 25% tariff on all cars not made in the U.S., set to take effect before April 2, when his broader “reciprocal tariff” plan begins. Stocks dropped following the news.

The President also said Tesla CEO Elon Musk had not advised him on the tariffs, despite the tech billionaire serving as a key advisor to the second Trump administration.

Trump has long pushed for higher tariffs on foreign trade partners, but his shifting policies have created market uncertainty.

While April 2 was initially framed as a major tariff overhaul, Trump and officials have recently hinted at a more flexible approach. Treasury Secretary Scott Bessent noted that countries may negotiate exemptions before the deadline.

Furthermore, President Donald Trump said he may reduce China tariffs to help facilitate a deal involving ByteDance selling the U.S. operations of TikTok.

Global hits:

Copper’s time to shine: Copper prices surged to a record high after reports suggested President Trump might impose tariffs on imports sooner than expected. The most active futures contract briefly hit $5.374 per pound before settling around $5.24. Prices have jumped 30% this year as US buyers rush to stockpile copper, outpacing gold’s 16% gain and outperforming major stock indexes.

Something about the UK: Inflation in the United Kingdom cooled to 2.8% in February, offering some relief to consumers. However, the slowdown may be temporary, with the Office for Budget Responsibility (OBR) forecasting an average inflation rate of 3.2% for 2025. Meanwhile, the OBR has halved its 2025 growth projection for the U.K. to just 1.0%, citing economic headwinds. Additionally, potential reciprocal tariffs from the United States could further dampen growth, potentially reducing the U.K.’s economic expansion by 1%, according to the OBR.

Reminder: Treasury Department is set to lay off a ‘substantial’ number of employees.

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📈 Stocks

S&P 500 5,712.20 (-1.12%)
DJIA 42,454.79 (-0.31%)
NASDAQ 17,899.02 (-2.04%)
BRENT CRUDE 75.42 (+0.54%)
* Prices as of Mar 27th, 12:20 AM UTC

Dollar Tree Gains Higher-Income Shoppers, Plans Expansion Amid Family Dollar Exit

Dollar Tree is attracting more high-income shoppers, following a trend seen at Walmart. The company reported $5 billion in net sales for the quarter, with same-store sales rising 2% and adjusted earnings per share at $2.11.

Looking ahead, Dollar Tree forecasts fiscal 2025 net sales between $18.5 billion and $19.1 billion, with 3% to 5% same-store sales growth. Adjusted earnings are expected to range from $5 to $5.50 per share. The retailer is also upgrading stores to accommodate higher-priced items, with some reaching up to $7.

As part of its restructuring, Dollar Tree is selling Family Dollar for $1 billion, a move aimed at strengthening both brands. The company, which acquired Family Dollar in 2015 for $9 billion, has already closed hundreds of locations and plans to shutter more. Around 1,000 combination Family Dollar-Dollar Tree stores will be included in the sale.

Despite these changes, Dollar Tree remains focused on expansion, with plans to open 300 new stores in 2025. Some of these locations include sites acquired from the now-defunct 99 Cents Only Stores in Arizona, California, Nevada, and Texas.

Tech warnings: TD Cowen caused a mark yesterday when it reported that while data center demand has grown, it’s lagging expectations. Analysts flagged Microsoft’s increased lease cancellations and deferrals, abandoning U.S. and European projects totaling 2 gigawatts of power. The pullback stems from an AI computing oversupply, raising concerns about industry capital allocation.

A similar warning in February shook investors, with Microsoft insisting its spending remains unchanged but may be reallocated. Adding to the woes, Nvidia shares fell on reports that China’s environmental rules could impact its AI sales.

Controversial: Italy handed tax demands to Meta, X and LinkedIn, in an unprecedented VAT claim against the three U.S. web giants. Also, EU urges citizens to stockpile 72 hours’ worth of supplies amid war risk.

Exciting: BYD aims to double overseas sales to 800,000 in 2025. On the other hand, Tesla is bringing its electric cars to oil-rich Saudi Arabia amid falling global sales.

Do you think EU's call to stockpile is justified?

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💵 Personal Finance

Wall Street’s Bonus Bonanza: Record Payouts Soar Past $47 Billion

Wall Street’s bonus season is off to a record-breaking start, with New York securities firms paying out $47.5 billion in total bonuses—up 34% from last year.

The average bonus soared 31.5% to $244,700, fueled by a 90% surge in Wall Street profits.

While the figures set new nominal records, inflation-adjusted highs still belong to 2006, when bonuses averaged over $307,000 in today’s dollars.

Even so, this year’s average payout remains three times higher than the $80,610 median US household income in 2023.

💰 Be a Better Investor

"Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1."

Warren Buffett

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