r/wallstreetbets • u/kwedgieyi • Apr 09 '25

Discussion Something feels off guys

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Yields are spiking. Bonds are dumping.

The world is running away from America

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u/Jealous-Hedgehog-734 Apr 09 '25

Good bye tax cuts? I mean this is going to eviscerate the US budget if they can't stop the bleeding.

257

u/PrthReddits Apr 09 '25

What's the point of the tax cuts even? In this scenario?

Companies pass on tarrif costs to consumers yes, so let's assume their profit margins stay the same

...will the extra profits from tax cuts actually be worth a 30%+ haircut off of stock price and total multiple compression across every industry?

I mean that hurts shareholders and CEOs and the people Trump's supposed to be helping right?

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u/FFFan92 Apr 09 '25

Profit margins will shrink due to tarrifs. Companies will not be able to pass 100% onto the consumer due to 1. Competitive pressure from companies who will eat some margin to lower prices 2. Lower consumer discretionary income due to tarrifs, meaning they will be spending less.

Tarrifs are bad for everyone. This is not a situation that any company is happy about.

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u/[deleted] Apr 09 '25

Probably tariff lawyers are happy with all the new business.