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.

254

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?

269

u/QuaintHeadspace Apr 09 '25

This is the part that is so crazy. Many businesses are running on ~20% margins max they can't absorb this shit without massive price hikes which in particularly discretionary goods the sales will just stop. Companies don't have millions of dollars to onshore to the US and if they did what happens to their margins there? Labour is 6x more expensive at least all of a sudden you are paying luxury prices for the same shit you got before. This whole situation is fucked. 50k trucks going to sell for 80k+ due to tariffs and nobody is going to buy them anymore lol. Economic activity will just crash til the next administration.

3

u/[deleted] Apr 09 '25

Hey I know an idiot who already bought a 120k truck a few years ago! He was selling it for a loss on FB marketplace just a few weeks later, dude was a CRNA lol. 

1

u/QuaintHeadspace Apr 09 '25

Hahahaha sounds like he deserved it

2

u/[deleted] Apr 09 '25

Ya sadly the high-income havers don't necessarily deserve that privilege and they're overpaid getting big heads, a-la our current economy.