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Markets Rebound on Tariff Delay
📈Not so fast, everyone, markets are bouncing back after President Trump announced a one-month delay on auto tariffs.
In this issue of the peel:
📈 Not so fast, everyone, markets are bouncing back after President Trump announced a one-month delay on auto tariffs.
🚗 Two Detroit giants, General Motors and Ford, surged on the positive news.
📉 CrowdStrike shares tumbled despite a decent earnings report but mixed guidance.
Market Snapshot

Banana Bits
Forget what we said yesterday. Stocks are so back after Trump announced a delay on auto tariffs.
Crowdstrike’s earnings may have been mixed, but investors’ reactions were crystal clear.
Jack Daniels maker says Canada pulling US alcohol off shelves is worse than tariffs.
GM and Ford, two old stock market stalwarts, are seeing gains on the auto tariff news.
If Foot Locker’s results are any indication, the consumer industry is due for a season of pain.
Check out Doubleline CIO Jeffrey Sherman’s prognosis on the market.
The Daily Poll
Is CrowdStrike’s AI investment smart or risky? |
Previous Poll:
Will new tariffs drive inflation up?
Absolutely: 66.8% // A little: 23.6% // No big deal: 2.8% // Trade war incoming: 6.8%
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Macro Monkey Says
Tariff Tantrum
The past week has been a whirlwind of economic developments, from unexpected policy shifts to surprising employment data.
Let's swing through the key events shaping the financial area.
Tariff Timeout: A Temporary Reprieve
President Trump announced a one-month exemption from the impending 25% tariffs on auto imports from Canada and Mexico.
This decision came after discussions with leaders from major automakers, including General Motors (GM), Ford (F), and Stellantis, aiming to prevent potential economic disadvantages for these companies.
The announcement provided immediate relief to the auto industry, with shares of the Big Three automakers experiencing significant gains:
General Motors (GM): Shares surged over 7%, reflecting investor optimism
Ford (F): The stock climbed more than 5%, buoyed by the tariff delay.
Stellantis: Also saw a notable increase in share value following the exemption news.
While this exemption offers temporary relief, the potential for future tariffs remains, keeping the industry on alert.
Employment Data: A Mixed Bag
The labor market presented a complex picture this week. The ADP National Employment Report revealed that private sector employment increased by 77,000 jobs in February, a significant slowdown from the 183,000 jobs added in January.
This deceleration suggests that employers may be exercising caution amid economic uncertainties. However, annual pay saw a 4.7% year-over-year increase, indicating that wages continue to rise despite the hiring slowdown.
Market Movements: Riding the Roller Coaster
Financial markets reacted swiftly to these developments:
Equity Markets: The Dow Jones Industrial Average surged nearly 500 points, or 1.2%, following the tariff delay announcement, after falling by about that much the day before. The market has now had several days of plus or minus 1.5% intraday movements, reflecting surging volatility and shifting sentiment on a daily basis.
Gold Prices: Gold held steady, hovering above $2,900 per ounce, with investors fleeing for safety as they await further economic data to gauge market direction.
Currency Markets: The U.S. dollar dipped to a four-month low, influenced by mixed economic signals and ongoing trade policy debates.
YTD U.S. VIX Volatility Chart
Bottom Line: The interplay between policy decisions, employment trends, and market reactions underscores the dynamic nature of the current economic environment.
As businesses and investors navigate these shifting landscapes, staying informed and adaptable remains crucial.
Career Corner
Question
I got connected with a VP at JPM, and when I requested to connect on a call, he replied and said, " Let's talk on LinkedIn."
Now, I am not sure how many questions I can ask or how much is too much in a test format, and above all, I am not sure how to take the conversation and convert it to a potential phone call. Any suggestions?
Answer
It could be that he doesn't want to chat via email and prefers his recruiting conversations over LinkedIn (not company email). Just continue the conversation on LinkedIn, remind him who you are and that you've already connected via email, and ask for a phone call.
Head Mentor, WSO Academy
What's Ripe
General Motors (GM) 7.2%
Automakers saw some reprieve yesterday as the White House delayed new auto tariffs, giving GM a much-needed boost.
Analysts see the delay as a lifeline for the industry, fueling a buying spree as optimists look to get ahead of any more potential positive news for auto stocks.
GM shares hit their highest level in weeks as trade tensions cool—for now.
Ford (F) 5.8%
Ford investors were also revved up today, cheering on the tariff delay from the sidelines.
With tariffs on imported parts on hold, Ford can maintain production costs and avoid price hikes on key models.
Analysts expect the delay to stabilize Ford’s margins, boosting confidence in the stock's near-term outlook.
What's Rotten
CrowdStrike (CRWD) 6.3%
Despite strong earnings, weaker-than-expected forward guidance spooked investors.
Rising competition in cybersecurity raised questions about CrowdStrike’s market dominance.
To be fair, the stock has had a strong run-up into earnings, and traders took the opportunity to lock in some gains, which added to the pile on and the stock going lower.
Abercrombie & Fitch (ANF) 9.2%
Investors reacted negatively to Abercrombie & Fitch’s latest earnings report, which included a softer sales outlook that signaled potential trouble ahead for the retailer.
Abercombie is in good company, it seems. Concerns over slowing consumer spending and rising inflationary pressures weighed heavily on discretionary retail stocks broadly.
Increased competition from fast-fashion brands like Shein and Zara continues to challenge Abercrombie’s ability to attract and retain younger consumers.
Thought Banana
CrowdStrike's Earnings—A Double-Edged Sword
CrowdStrike dropped its fourth-quarter and fiscal year 2025 financial results, showcasing a blend of robust performance and cautious outlooks that left investors with mixed feelings.
Let’s look at the earnings highlights:
Revenue Growth: The cybersecurity firm reported a 25% year-over-year increase in revenue, reaching $1.06 billion for the quarter, surpassing analysts' expectations of $1.03 billion.
Earnings Per Share (EPS): Adjusted EPS stood at $1.03, exceeding Wall Street's estimate of $0.85, reflecting strong operational efficiency.
Annual Recurring Revenue (ARR): Total ARR grew by 23% to $4.24 billion. However, net new ARR declined by 20% to $224.30 million, raising concerns about the pace of new business acquisition.
Guidance and Market Reaction
Despite the strong quarterly performance, CrowdStrike's forward-looking guidance tempered investor enthusiasm:
Fiscal Year 2026 Outlook: The company projects revenue between $4.74 billion and $4.8 billion, with an adjusted EPS of $3.39, both figures falling short of analysts' estimates.
First Quarter Forecast: Revenue is anticipated to range from $1.1006 billion to $1.1064 billion, with an adjusted EPS between $0.64 and $0.66, below the expected $0.95 per share.
In response, CrowdStrike's stock experienced a significant drop, falling 6% on the day.
Factors Influencing the Outlook
Several elements contribute to CrowdStrike's conservative guidance:
Previous Service Outage: A substantial service disruption in July has already cost the company $60 million, with an additional $73 million expected in the upcoming quarter, including $43 million allocated for customer retention discounts.
Increased Investments: Plans to bolster marketing efforts and AI infrastructure are set to elevate operating expenses, potentially impacting short-term profitability.
Economic Environment: Subdued spending on cybersecurity products amid high inflation and a volatile macroeconomic climate poses challenges to revenue growth.
Implications for Investors
CrowdStrike's situation underscores the delicate balance between achieving growth and managing operational risks.
While the company's fundamentals remain strong, the cautious guidance highlights the need for vigilance in navigating industry challenges. Investors should monitor how CrowdStrike addresses these hurdles to sustain its market position and drive future growth.
The Big Question: Given the increasing importance of AI in cybersecurity, do you see CrowdStrike’s investments in AI infrastructure as a necessary move or a risky expense that could hurt short-term profitability?
Banana Brain Teaser
Previous
Last year, 26 members of a certain club traveled to England, 26 members traveled to France, and 32 members traveled to Italy. Last year, no members of the club traveled to both England and France; 6 members traveled to both England and Italy, and 11 members traveled to both France and Italy. How many members of the club traveled to at least one of these three countries last year?
Answer: 67
Today
A store reported total sales of $385million for February of this year. If the total sales for the same month last year was $320million, approximately what was the percentage increase in sales?
Send your guesses to vyomesh@wallstreetoasis.com
In investing, what is comfortable is rarely profitable.
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Chris, Vyom, Ankit & Patrick