😭 Worst day since 2020

and the why and why not of tariffs

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Good morning investors! The dust may take a while to settle as analysts continue to come up with warnings.

Today we cover:

  • Is a recession coming?

  • Why and why not of tariffs

  • Stocks fall

  • China car sales

Yesterday, we asked our followers if they’re planning to make changes due to the 'Trump Tariffs.' About 40% said they may cut expenses. So, why not kick things off by identifying areas where smart people often waste money?

šŸ“Š Economy and News 

Trump’s Tariffs Stoke Recession Fears

Trump’s sweeping tariffs have raised the effective U.S. tariff rate to its highest level since 1909, surpassing even the infamous 1930 Smoot-Hawley Tariff Act. Goldman Sachs warns this could slow global growth and force the Federal Reserve into deeper rate cuts.

On Thursday, traders raised their bets on a May rate cut to 24%, up from 11% the day before. Despite concerns, large investors are still favoring U.S. assets, though they remain wary.

Economists fear a recession is looming. UBS predicts two quarters of negative GDP growth, while JPMorgan warns of a global downturn.

The Atlanta Fed’s GDPNow model has already signaled a -2.8% contraction this quarter. If tariffs remain, growth could stall, with inflation climbing above 3% in 2025.

Markets could see a sharp sell-off, echoing Warren Buffett’s warning.

ā€œThere is simply no telling how far stocks can fall in a short period,ā€ Buffett wrote in 2017. But in turbulent times, he advises patience, echoing Kipling: ā€œIf you can wait and not be tired by waiting ... Yours is the Earth and everything that’s in it.ā€

Reminder: Trump’s universal 10% tariffs will take effect April 5, while the ostensibly ā€œreciprocalā€ tariff will be live April 9.

Trump’s tariff plan will slow down growth and might push up prices, making the threat of stagflation ā€œreal,ā€ Lindsay Rosner, Goldman Sachs’ head of multi-asset fixed income, said.

Is a recession coming this year?

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Global hits:

Exciting: HSBC raises gold price forecasts amid geopolitical tensions. Also, Altimeter Capital CEO Brad Gerstner said he is bullish on Nvidia despite broader concerns tied to President Donald Trump’s tariffs since semiconductors are on the list of tariff exceptions.

Lastly, Trump said he is open to negotiations, contradicting White House aides who insist the sweeping tariffs are not a bargaining tactic.

Why and why not: Trump is shifting U.S. trade policy from punishing select countries to a broad 10% baseline tariff on all imports — unless companies bring manufacturing home. The goal: boost U.S. industry, shrink the trade deficit, and raise revenue to offset tax cuts.

He argues it's a fair response: ā€œThey do it to us, we do it to them.ā€ Countries like China and Mexico protect their own industries. Now America’s doing the same.

Critics warn tariffs raise costs for consumers. The Yale Budget Lab estimates households could lose up to $3,800 annually. Businesses, which pay the tariffs, face up to $2 billion in daily fees. Yet supporters say prices could stabilize, as retailers like Walmart pressure suppliers to absorb costs. In fact, history shows within 18 months, the prices of all goods affected by the 2018 tariffs fell below their pre-tariff levels.

Despite short-term stock market fears, Treasury Secretary Scott Bessent pointed to the long view: ā€œIn the short run, the market is a voting machine. In the long run, it’s a weighing machine.ā€

The bet? That American companies — and their stock prices — will benefit once the dust settles.

Sponsored by Ryse

Apple's New Smart Display Confirms What This Startup Knew All Along

Apple has entered the smart home race with its new Smart Display, firing a $158B signal that connected homes are the future.

When Apple moves in, it doesn’t just join the market — it transforms it.

One company has been quietly preparing for this moment.

Their smart shade technology already works across every major platform, perfectly positioned to capture the wave of new consumers Apple will bring.

While others scramble to catch up, this startup is already shifting production from China to its new facility in the Philippines — built for speed and ready to meet surging demand as Apple’s marketing machine drives mass adoption.

With 200% year-over-year growth and distribution in over 120 Best Buy locations, this company isn’t just ready for Apple’s push — they’re set to thrive from it.

Shares in this tech company are open at just $1.90.

Apple’s move is accelerating the entire sector. Don’t miss this window.

Past performance is not indicative of future results. Email may contain forward-looking statements. See US Offering for details. Informational purposes only.

šŸ“ˆ Stocks

S&P 500 5.396,52 (-4.84%)
DJIA 40.545,93 (-3.98%)
NASDAQ 16.550,60 (-5.97%)
BRENT CRUDE 69.78 (-0.56%)
* Prices as of Apr 4th, 12:20 AM UTC

Stocks Plunge as Tariff Worries Spark Market Sell-Off

Stocks tumbled Thursday, with the S&P 500 falling back into correction territory for its worst single-day drop since 2020. The Nasdaq plummeted 5.97%, and over 400 S&P 500 companies posted losses.

Nike and Apple plunged 14% and 9% each, while major retailers like Five Below (-28%) and Dollar Tree (-13%) suffered steep declines. Tech stocks also took a hit, with Nvidia falling nearly 8% and Tesla down over 5%. Shopify fell over 18% after BofA raised concerns about its high exposure to the latest tariffs. Investors fled to bonds, pushing the 10-year Treasury yield below 4%.

As a whole, Magnificent Seven stocks lost more than $1 trillion in collective market cap on Thursday.

Apple’s efforts to diversify manufacturing away from China took a hit with Trump’s new tariffs. Key suppliers in India, Japan, South Korea, Taiwan, Vietnam, and Malaysia are now affected. To offset costs, Apple may hike U.S. prices by 17-18%.

Other big losers include Elf Beauty (-18.96%), Dell Technologies (-18.99%), and Best Buy (-18%).

🐻 The Russell 2000, heavily weighted in small-cap stocks, sank nearly 7%, entering bear market territory. Analysts cited economic uncertainty and rising debt costs as key pressures. The sell-off was concentrated in tech and consumer sectors, with stocks like Upstart, RxSight, and Victoria’s Secret all losing over 18%.

President Trump acknowledged the market drop, comparing his tariff policies to a necessary "operation." The uncertainty surrounding tariffs has fueled recession fears, further pressuring equities.

Oh shi*t: Restoration Hardware plunged 45% Thursday after reporting weaker-than-expected revenue—and bad timing. The firm released its earnings just as President Trump unveiled his new tariff policy.

CEO Gary Friedman downplayed the impact, saying he didn’t believe tariffs would ā€œstick,ā€ but investors weren’t convinced. Despite his optimism, the stock tanked as markets priced in a harsher post-tariff reality.

China car deliveries: China’s electric vehicle market saw sharp momentum in March, with Xiaomi, Xpeng, and Leapmotor each delivering close to or above 30,000 vehicles—doubling the output of many rival startups. Xiaomi hit a record with 29,000 units, even as its flagship SU7 was involved in a fatal autopilot crash. The company is aiming for 350,000 deliveries this year and plans to expand production.

Xpeng posted 33,205 deliveries, up 268% year-over-year, with strong demand for its Mona M03 model. Leapmotor, now backed by Stellantis, led the startup pack with 37,095 vehicles delivered and began selling EVs in the UK.

Meanwhile, Li Auto and BYD continued to show strength, with Li delivering 36,674 units and BYD maintaining its lead with nearly 1 million vehicles sold in Q1. BYD also unveiled its ultra-fast charging ā€œSuper e-Platformā€ and saw record overseas sales.

Tesla sold 78,828 vehicles in China in March. March’s results represent a 156.87% month-over-month increase. However, these numbers still represent an 11.49% year-over-year decrease compared to March 2024. Its Q1 China total hit 172,754—far behind BYD. Other players like Nio, Zeekr, and Aito posted modest gains but still trailed in volume.

šŸ’µ Personal Finance

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šŸ’° Be a Better Investor

ā€œThe markets are going to boom. The stock is going to boom. The country is going to boom. And the rest of the world wants to see is there any way they can make a deal,ā€

Donald Trump

Resources:

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.