It Girl Identity: Issue 27

It Girl Identity Newsletter

What’s Moving Markets

Markets are on edge as new tariffs from the Trump administration raise fears of slower growth, higher inflation, and a possible recession (now at 45% probability). Major banks like Morgan Stanley and Citi are cutting 2025 earnings forecasts. Companies are already adding tariff surcharges, and consumer financial stress is rising. Meanwhile, global investors are reassessing U.S. private markets and hedging more heavily against the dollar. Big Tech remains under regulatory pressure despite hopes for relief.

What’s Up

• Gold: +2.2% to a record $3,247.80

• Bitcoin: +1.3% to $82,736

• SoftwareONE (SWON.SW): +8.0%, Crayon cash offer acceptance updates.

• ConvaTec (CTEC.LN): +7.3%, FY25 revenue increase for InnovaMatrix.

• ZAI Lab (9688.HK): +9.7%, compliance with HFCAA, no delisting.

• Apple (AAPL): Positive tariff exemption news, accelerating production in India and Vietnam.

• KKR (KKR): Close to buying OSTTRA JV for ~$3B.

• S&P Futures: Trading above previous update levels, staying above Friday's close.

What’s Down

• Fabege (FABG.SS): -1.5%, Q1 EPRA NRV lower than expected.

• AEON Co. (8267.JP): -4.0%, FY net income guidance lower than expectations.

• Intel (INTC): Facing backlash over China expansion and national security

• Defense sector: A $5.1B slash in defense spending

• Cannabis industry: Scotts Miracle-Gro is pulling back

• Hollywood imports: New China tariffs are threatening film releases

Markets & Economy

• Tariff Exemption: Electronics tariff exemption is seen as a tailwind for global risk assets today, though some uncertainty remains as the exemption is temporary.

• Consumer sentiment data and AI stocks are drawing attention after OpenAI’s faster model-testing process was revealed.

• Big bank Earnings Season: JPMorgan, Morgan Stanley, and Wells Fargo are reporting—just as investor nerves are high from trade war tension and Treasury market turmoil. Despite the headlines, half of market watchers believe earnings results won’t majorly move stocks. This season may be more about macro signals than price reactions.

  • M&T Bank (MTB): Q1 EPS $3.32 vs. expected $3.40.

  • Goldman Sachs (GS): Earnings before the open today.

• US Economic Calendar: Inflation expectations and Fed speeches. Notable data releases include Empire State Manufacturing, March Retail Sales, Industrial Production, and weekly jobless claims.

Tariffs, Trade Wars & Macroeconomics: A Reading Guide

This week’s Fed speeches, inflation data, and trade tensions show how trade policy impacts markets and jobs. We’re breaking down tariffs—what they are, how they work, and why they matter now.

Step 1: Understand the Basics
1. Economics in One Lesson – Henry Hazlitt
Intro to core economic principles, including how tariffs affect prices and jobs.

2. Globalization and Its Discontents – Joseph Stiglitz
Critiques how global trade institutions impact developing countries and workers.

3. Free Trade Under Fire – Douglas Irwin
Defends free trade with modern and historical examples, offering a balanced view.

Step 2: Context & Historical Perspective
4. The Great Convergence – Richard Baldwin
Explains how technology and globalization changed trade dynamics post-1990.

5. Clashing Over Commerce – Douglas Irwin
A deep history of U.S. trade policy from the founding to today’s disputes.

Step 3: Deep Dive into US-China & Modern Policy
6. Superpower Showdown – Bob Davis, Lingling Wei
Inside look at the US-China trade war from two WSJ reporters with Beijing access.

7. Trade Wars Are Class Wars – Klein & Pettis
Argues that inequality and domestic imbalances fuel global trade tensions.

Step 4: Macroeconomic Impact & Broader Effects
8. The Lords of Easy Money – Christopher Leonard
Reveals how the Fed’s policies affect markets and international trade indirectly.

9. The Ascent of Money – Niall Ferguson
Traces the evolution of finance and its ties to global political power.

10. Principles for Navigating Big Debt Crises – Ray Dalio
Breaks down how debt cycles and policy tools shape macro outcomes—relevant to trade-induced slowdowns.

Disclaimer: Information shared here is for educational purposes only. Consult a financial advisor for personalized advice.

It Girl Recommendations

Tailored to incoming college sophomores entering prep for 2027 recruitment cycles, here are some top technicals you must know to ace your interviews, and get ahead of competition.

1. Accounting, Financial Statements

   • Understand the 3 Core Statements: Income Statement, Balance Sheet, and Cash Flow Statement — and how they connect. Learn key concepts like depreciation, deferred taxes, and working capital.

2. Valuation, Enterprise vs. Equity Value

   • Know the Difference: Learn how to calculate Enterprise Value and Equity Value, and when to use each. Understand how debt and cash affect valuation.

3. Valuation, Core Methodologies

   • Master These Three: Comparable Companies, Precedent Transactions, and Discounted Cash Flow (DCF). Optional but helpful: Leveraged Buyouts (LBOs).

4. DCF, Cash Flow & Assumptions

   • Build from the Bottom Up: Calculate Unlevered Free Cash Flow, WACC, terminal value (Gordon Growth vs. Exit Multiple), and run sensitivity analysis.

5. M&A, Accretion & Dilution

   • Know Deal Impact: Understand EPS accretion/dilution, synergy types, and purchase methods (cash, stock, debt). Practice simplified merger models.

6. LBO, Private Equity Basics

   • How PE Firms Profit: Learn the core drivers of an LBO model — debt use, IRR, and exit assumptions. Understand value creation through leverage.

7. Excel, Modeling Best Practices

   • Be Fast and Clean: Use keyboard shortcuts, model in a logical layout, and understand formatting standards. Build a 3-statement model from scratch.

8. Markets, Macro Awareness

   • Tie It All Together: Know how inflation, interest rates, and Fed policy impact valuations and deals. Read earnings calls and investor decks for real-world application.

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See you next Monday, It Girls!

With Love,

It Girl Identity