Visa Soars, Carmakers Crash: Trump Tariffs Spark Market Mayhem

Ladies and gentlemen, buckle up! Today’s market is a rollercoaster ride, with Visa leading the Dow Jones Industrial Average higher while automakers are getting crushed under the weight of President Trump’s new tariffs. Let’s dive in and see what’s happening!

First, let’s talk about Visa. This stock is ON FIRE! Visa reported a 20% increase in adjusted earnings to $2.51 per share and a 10% increase in net revenue to $8.78 billion for the quarter. That’s right, folks! Visa is crushing it, and the market is taking notice. Payments volume rose 8%, processed transactions increased 11%, and cross-border payments volume grew 16%. CEO Ryan McInerney attributed this growth to "stable" consumer spending, which suggests a robust demand for Visa's services.



Now, let’s talk about the other side of the coin. Automakers are getting hammered by Trump’s 25% tariffs on imported cars and parts. Shares of carmakers in Japan, Germany, and the UK were sold off on Thursday, wiping billions of value off names such as Toyota, BMW, and Jaguar Land Rover. Firms in America were some of the hardest hit, with General Motors down more than 7%. This is a bloodbath, folks! The market is anticipating higher costs and potential disruptions in supply chains, which could lead to lower profits and higher prices for consumers.

So, what are the automakers doing to mitigate the financial burden? They’re considering several strategies. One approach is to move production from countries like Mexico to the United States. This could help avoid the tariffs but would also increase production costs. Another strategy is to increase the number of cars they already make in the US, which could help offset some of the tariff costs but may not be feasible for all models. Some automakers may also stop selling imported models, especially those that are less profitable. For example, Ferrari, which ships its cars from Italy, immediately announced a 10% price hike to help cover the new cost of the duty.

But wait, there’s more! Gold is shining bright today. Gold performed exceptionally well in 2024, outperforming all major asset classes and proving to be a strong portfolio diversifier. Over the course of the year, the LBMA Gold Price PM set 40 new all-time highs (ATH), the most recent of which was US$2,777.80/oz on 30 October. Gold rose 25.5% in 2024, likely due to its role as an effective hedge against the heightened geopolitical uncertainty and market volatility experienced this year.

Now, let’s talk about Broadcom. This stock is fading fast. Broadcom reported earnings that missed expectations, and the stock is getting crushed as a result. This is a classic case of “buy the rumor, sell the news,” folks. Broadcom’s earnings were not as strong as the market had hoped, and the stock is paying the price.

So, what’s the bottom line? Visa is a buy, automakers are a sell, gold is a buy, and Broadcom is a sell. This is a no-brainer, folks! You need to own Visa and gold, and you need to stay away from automakers and Broadcom. The market is a fickle beast, and you need to be ready to pounce when opportunities arise. So, buckle up and get ready for the ride!