💼 Bread, Circuses, and Bubble Markets

This week, the markets have embraced their inner Caligula—unpredictable, extravagant, unhinged. From Trump’s tariff theatrics to SoftBank’s $340 billion OpenAI moonshot, rationality has left the building.

Caligula, history’s favorite mad emperor, once declared war on the sea and made his horse a consul. While we’re not that far gone (though SoftBank’s Masayoshi Son might argue otherwise), the parallels are uncanny. Trade wars, dividend drama, and drone-powered drive-thrus—our modern empire thrives on folly. But, when in Rome… Inflate the currency and call your horse a CEO.

Trade War 2.0: Trump’s Tariff Tantrum Sparks Global Chaos

Story President Trump has reignited the trade wars, slapping 25% tariffs on Canada and Mexico and an additional 10% on China. The move, justified under the International Emergency Economic Powers Act, has sent markets into a tailspin. Canada retaliated with tariffs on $155 billion of U.S. goods, including bourbon and beer, while China filed a WTO lawsuit. U.S. automakers, already struggling, now face higher production costs, and food and housing prices are set to rise.

What This Means Higher prices for consumers, corporate cost-cutting, and a whole lot of uncertainty. The Dow dropped 650 points, and oil prices surged, signaling inflationary pressures. Legal challenges are inevitable, but they won’t stop the immediate economic fallout.

Point of Interest Trump’s tariffs are a bold play, but history shows trade wars rarely end well. Expect more volatility as global leaders scramble to respond.

Stock Picks

• Low Risk: Walmart ($WMT) – Consumers will flock to discount retailers as prices rise.

• Medium Risk: Toyota ($TM) – U.S. automakers’ loss is Toyota’s gain.

• High Risk: Home Depot ($HD) – Lumber tariffs could hurt, but housing demand remains strong.

• Wildcard: Beyond Meat ($BYND) – As meat prices rise, plant-based alternatives could see a boost.

Private Equity Roars Back, Leaving Private Credit in the Dust

Story After two years of playing second fiddle to private credit, private equity is back on top. SoftBank’s $340 billion bet on OpenAI and Apollo’s $8 billion carveout of GFL Environmental’s unit are just the latest signs of PE’s resurgence. Meanwhile, private credit deals are slowing as lenders grow cautious.

What This Means Private equity firms are doubling down on big bets, signaling confidence in the market. Expect more mega-deals and corporate carveouts as PE firms deploy their dry powder.

Point of Interest SoftBank’s OpenAI investment is either genius or madness—only time will tell.

Stock Picks

• Low Risk: Blackstone ($BX) – A diversified PE giant with a strong track record.

• Medium Risk: Apollo Global Management ($APO) – Riding high on the GFL deal.

• High Risk: SoftBank Group ($SFTBY) – High-risk, high-reward with its OpenAI bet.

• Wildcard: OpenAI (Private) – If you can get in, this could be the next big thing.

Walgreens Suspends Dividend for the First Time in 92 Years

Story Walgreens Boots Alliance made history this week—just not the kind it wanted. The pharmacy giant suspended its dividend for the first time since 1933, sending shares tumbling 10%. The move is part of a broader effort to cut costs and shore up its balance sheet amid declining sales and rising competition.

What This Means Walgreens is in trouble. The dividend suspension is a red flag for investors, and the company’s turnaround plan is far from guaranteed.

Point of Interest The last time Walgreens suspended its dividend, the Great Depression was in full swing. Let’s hope history doesn’t repeat itself.

Stock Picks

• Low Risk: CVS Health ($CVS) – A more stable player in the pharmacy space.

• Medium Risk: Amazon ($AMZN) – Its pharmacy business is gaining ground.

• High Risk: Walgreens Boots Alliance ($WBA) – A speculative play on a potential turnaround.

• Wildcard: GoodRx ($GDRX) – Disrupting the pharmacy space with discount prescriptions.

Meta Considers Texas Incorporation Amid Regulatory Pressure

Story Meta is reportedly weighing a move to Texas as regulatory pressure mounts in California. The tech giant is also exploring ways to reduce its tax burden and streamline operations.

What This Means Texas is becoming a haven for tech companies looking to escape high taxes and regulation. Expect more companies to follow suit.

Point of Interest Will Texas become the new Silicon Valley? Only time will tell, but the Lone Star State is certainly making a strong case.

Stock Picks

• Low Risk: Apple ($AAPL) – A tech giant with a strong balance sheet.

• Medium Risk: Tesla ($TSLA) – Already headquartered in Texas.

• High Risk: Meta ($META) – A speculative play on its Texas move.

• Wildcard: Texas Instruments ($TXN) – A Texas-based tech company poised to benefit.

Luxury Real Estate Poised for a 2025 Rebound

Story After a sluggish 2024, luxury real estate is set for a rebound in 2025. NYC office demand is back to pre-pandemic levels, and high-net-worth buyers are returning to the market.

What This Means If you’ve been waiting to buy that penthouse, now might be the time. Expect prices to rise as demand picks up.

Point of Interest Luxury real estate is often a leading indicator of broader market trends. Keep an eye on this space.

Stock Picks

• Low Risk: Realty Income ($O) – A stable REIT with a strong dividend.

• Medium Risk: Howard Hughes ($HHH) – A developer focused on luxury properties.

• High Risk: Zillow ($Z) – A speculative play on the housing market.

• Wildcard: Sotheby’s (Private) – If you can get in, this luxury real estate broker could soar.

Wrapping up

And so, we exit this week’s Colosseum of capitalism, where fortunes rise and fall faster than a Wall Street gladiator’s sword. As Caligula wisely said, “Let them hate me, so long as they fear me.” 

In today’s markets, fear and greed reign supreme. So, as you plot your next move, remember: strategy trumps strength, and a dash of luck never hurts.

Vale!
The Briefcase Team

Premium Access