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Trump’s Tariff Whiplash Hits Markets

🤷‍♂️ Trump’s wacky economic strategy has investors confused and the market struggling to find its way.

March 27, 2025

Silver banana goes to…



In this issue of the peel:

  • 🤷‍♂️ Trump’s wacky economic strategy has investors confused and the market struggling to find its way.

  • 🚗 GameStop goes full crypto degen, Paychex thrives, while Nvidia and GM take hits.

  • 🤖 OpenAI projects $13 billion in revenue this year, up 250% from 2024.

Market Snapshot

Banana Bits

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Macro Monkey Says

Tariff Chaos: Blink and You’ll Miss It

Alright, I concede. At this point, I have no idea what’s going on with the macroeconomy. Trump's approach to tariffs has been anything but predictable, leaving markets and businesses scrambling to keep up. 

One moment, he's hinting at leniency; the next, he's threatening a new round of tariffs on God knows what country. Markets have reacted chaotically. 

Here’s what’s happening. 

Just a few days ago, Trump suggested that the upcoming tariffs, set for April 2, might be "more lenient than reciprocal." He took a much more softened stance, which raised hopes for a somewhat normal week of trading activity. 

But of course, that would be too simple. 

The next day, he announced tariffs targeting Venezuelan oil exports, affecting countries like China and others that purchase Venezuela’s oil. These "secondary tariffs" are part of a broader strategy to pressure the Venezuelan government by disrupting its financial support. 

And just yesterday, after going back and forth for weeks, Trump finally decided to put tariffs on all auto imports to the US, crushing automaker stocks. He’s doing all of this in the name of a so-called “Liberation Day” for the U.S. My personal portfolio surely doesn’t feel liberated. 

This policy whiplash is creating market volatility that even the most successful hedge fund managers can’t overcome. Several top traders have been fired from hedge funds, including the guy who left Citadel after losing $60 million in just a few weeks. 

On top of this, more global investment banks are cutting their S&P forecasts for 2025, following Goldman, which was the first to do so. 

The Takeaway?

Trump's unpredictable tariff policies are creating a haze of uncertainty, making it difficult for businesses and investors to navigate. 

This erratic approach not only affects market stability but also raises questions about the long-term health of the global economy. On the other hand, we’ve seen this movie before, back in 2016, and markets ended up being just fine in the long run.

Career Corner

Question

If someone gave me both their phone number and email, I should email them, right?

Answer

To schedule a meeting, yes, it's a more controllable situation for you and prevents you from being asked a question you’re not ready to answer.

Head Mentor, WSO Academy

What's Ripe

GameStop (GME) 11.7%

  • Why own actual video game stores when you could just day-trade b*tcoin, which sounds way more fun. That’s the approach GameStop’s CEO is taking as the company announced plans to shut down many retail stores and just buy the dip. Investors seem to love it, so what’s the harm? Let’s see if the Wallstreetbets degenerates can hold the line and put a few more hedge funds out of business.

Paychex (PAYX) 4.2%

  • The HR solutions provider just had a pretty solid earnings report. The company saw a steady rise in demand for its payroll services and HR outsourcing, even as the economy continues to stabilize. The ongoing shift to remote work and demand for more flexible HR solutions has investors banking on Paychex’s continued success. It’s nice to see some green in the payroll business.

What's Rotten

NVIDIA (NVDA) 5.7%

  • Here we go again. You knew Nvidia couldn’t stay out of the limelight for too long. Back to our regularly scheduled program of this stock being either the best or worst thing that ever happened to your portfolio. Nvidia’s stock sank 5% amid a broader tech rout, but it wasn’t just the market taking a hit. A report highlighting China’s tightening environmental regulations on tech firms, particularly targeting energy-intensive industries like semiconductor manufacturing, added pressure to Nvidia specifically.  With regulatory pressure mounting and the global chip shortage still a concern, Nvidia’s headline risk is weighing down the stock for now.

General Motors (GM) 3.1%

  • General Motors' stock has been up and down for a while as Trump has been playing a never-ending game of “will they or won’t they” with tariffs. Well, we finally got an answer yesterday, as the President officially announced he’s moving forward with tariffs on car imports into the US, which hurts domestic companies like GM and Ford in the short run. Time will tell if these measures hit their intended goal of placing US car makers back in a dominant position globally.

Thought Banana

OpenAI’s Path to Global Dominance 

Sam Altman, the CEO of OpenAI (aka the company that created ChatGPT), must be a pretty confident guy. He’s setting super high expectations for the company this year, forecasting revenue of $12.5 billion, almost triple what the company made last year.

The reason? OpenAI is riding a powerful wave called generative AI, which has tech companies like Microsoft, Amazon, Google, and others opening their wallets and spending crazy amounts of money. 

Right now, you’re probably thinking to yourself, “Wait a second, wasn’t OpenAI set up to be a nonprofit”? The answer is yes, but once Altman realized how much money there was to be made in GenAI, he had a sudden change of heart. That checks out.

So, how does OpenAI actually monetize its business? 

Right now, primarily through subscriptions to ChatGPT, API for developers, grants, and donations. However, the plan is to break into other areas like data and AI licensing eventually. 

AI is a blank slate right now with tons of potential applications in the future that we don’t yet know about. As a result, hyperscalers are willing to blow the budget on figuring out the next use case. 

OpenAI has a few notable backers, including Tiger Global, Sequoia, Microsoft, and Softbank, which invested $40 billion, giving the company a $260 billion valuation. 

They will need to keep growing revenue at an astronomical rate for a long period of time before that valuation makes any sense. But let’s not forget that Masayoshi Son’s Softbank has a habit of going all-in on unproven companies only to lose billions of dollars. Like that time they lost $14 billion in the obvious scam that was WeWork. 

But who am I to doubt? OpenAI has pretty much knocked it out of the park since becoming a for-profit company. From enhancing ChatGPT’s capabilities to rolling out cutting-edge features like native image generation, they’re well-positioned as a potential leader in the "AI arms race." 

With competitors like Anthropic and Perplexity creeping up, OpenAI’s rapid revenue growth will depend on not only staying ahead of the pack but also delivering on those lofty projections.

The company’s future is bright, but like all tech titans, it’s a game of expectations versus results. Investors are betting big on AI, and OpenAI’s ability to live up to its ambitious growth targets will be the ultimate test of its market leadership.

The Takeaway?

OpenAI's projected growth is ambitious, but with the backing of Microsoft and a growing AI market, it’s not entirely out of possibility. If they hit their $12.7 billion revenue target, it’ll signal that AI isn’t just the future—it’s the now. But, as always, the real challenge lies in execution.

The Big Question: If OpenAI’s valuation keeps climbing, are we looking at the next trillion-dollar tech giant, or just another bubble waiting to pop?

Banana Brain Teaser

Previous

There are 8 teams in a certain league, and each team plays each of the other teams exactly once. If each game is played by 2 teams, what is the total number of games played?

Answer: 28

Today

At a regular hourly rate, Don had estimated the labor cost of a repair job as $336, and he was paid that amount. However, the job took 4 hours longer than he had estimated, and, consequently, he earned $2 per hour less than his regular hourly rate. What was the time Don had estimated for the job, in hours?

Send your guesses to [email protected]

❝

An investment in knowledge pays the best interest.

Benjamin Franklin

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Happy Investing,
Chris, Vyom, Ankit & Patrick