The Rundown - Mexico Quickly Reacts to Trump Tariffs, OpenAI Launches New AI Agent

Episode Date: February 3, 2025

Stock market update for February 03, 2025. Learn more about what's at stake with tariff wars: deep dive Find us on: ⁠YouTube⁠ ⁠Instagram

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Monday, February 3rd. In today's episode, we tell you the fallout from Trump's tariffs. Markets are falling. We'll tell you which industries are getting hurt the most. We also preview this upcoming week, ton of earnings to look forward to, and the jobs report. Then stick around to the end of the show to find out the latest tool from OpenAI that can make your job much easier. All right, let's go. Well, guys, the stock market ended last week on a down note. The S&P 500 and NASDAQ both finished the week in the red, thanks to some shocking news on Friday afternoon. The Trump administration confirmed they were moving forward with 25% tariffs on Canada and Mexico

and 10% tariffs on China, which freaked out the market, sending them in the red to close the week. And that chaos carried over into the weekend and into this week. Canada, Mexico, and China have all pledged to retaliate against these tariffs. And the most shocking trade news this weekend might be the Dallas Mavericks trading Luca Donchitz to the Lakers. Still, I'm still processing that one. Now, going back to the tariff stuff, the economic impact of these tariffs could be big for all parties involved.

You know, Mexico, China, and Canada are the U.S.'s biggest trade partners. Goldman Sachs thinks these tariffs could have a 3% hit to the S&P 500 earnings forecast. Some people think it could be even worse. And we might not be done yet. There might be more tariffs coming. Last night, Trump said that he plans to slap tariffs on the EU. definitely happened with the European Union. I can tell you that because they've really taken advantage of us. And, you know, we have over a $300 billion deficit. I wouldn't say there's a timeline, but it's going to be

pretty soon. So we might be on the verge of a full-on trade war now. And that is freaking out investors. This is the second Monday in a row where we are waking up to markets selling off. Last week it was Deep Seek. This week it's tariffs. So we'll have to see how the rest of the week goes and what the fallout from these tariffs might be. Oh my God, we just got some breaking news. The Mexican president said the tariffs will be paused for one month after her discussion with President Trump. As part of pausing these tariffs, Mexico will deploy 10,000 National Guard troops to help secure the border and they're going to work with the U.S. on security and businesses. So markets have cut some losses this morning after this announcement. Again, this is all moving so fast. And I'm sure we're going to have more

information throughout today and the rest of the week. And besides the tariff stuff, it was already setting up to be a big week. You know, we have a ton of earnings this week. We have a ton of earnings this week, Pallenteer, Google, Amazon, Uber, Disney, Eli Lilly are all reporting earnings just to name a few. And then on Friday, we are getting the jobs report, which will tell us how many jobs were added to the U.S. economy last month. So there's a lot to process right now. You know, we're going to be talking tariffs, earnings, and the fallout of all this throughout the week on the podcast. So it's a great time to get subscribed. Let's run through some headlines. And obviously, we're going to talk more about the fallout from these tariffs, starting with automakers.

They are probably the most vulnerable to these tariffs. Car companies send billions of dollars of vehicles and auto parts across the U.S. borders from Mexico and Canada on a weekly basis. GM and other major automakers make up to 40% of their cars in Mexico and Canada, and that's why the auto sector is taking a hit in response to the news. Now with these tariffs in place, that's expected to raise the prices of vehicles for U.S. consumers now. The stock price for these automakers are down across the board. Prices have recovered a bit since Mexico announced a pause on these tariffs.

GM stock is probably the hardest hit, and that's because GM makes more cars in Mexico than any other automaker. In 2024, GM manufactured nearly 850,000 cars in Mexico. But they're not the only ones getting impacted. Shares of European automakers like Volkswagen and Stalantis are also dropping. You know, three of Volkswagen's most popular cars in the U.S. are made in Mexico, so they are going to get hit hard by this. The Japanese big three automakers, Toyota, Honda, and Nissan are also getting hit hard. Nissan has two plants in Mexico and exports about 300,000 cars a year. year to the U.S. Meanwhile, Toyota and Honda each make about a million cars the year in North America.

So automakers are one of the biggest losers this morning from these Trump tariffs, and we'll have to see what they do. Are these carmakers going to bring manufacturing back to the U.S.? Or are they just going to increase prices on their cars? I mean, I think it's going to take some time to see the full fallout from all of this. I mean, we're just getting started. Let's talk about another industry that's going to get hurt by these tariffs. The booze industry. There's a lot of importing and exporting of alcohol across the Canada, Mexico, and U.S. borders. And these, these, These tariffs are going to be a major bus kill. Ontario, Canada has responded by removing American alcohol from its stores.

You know, Canada controls its liquor sales through government-owned organizations, so they're able to act quickly on this. The Liquor Control Board of Ontario sells about $1 billion worth of U.S. alcohol annually, and Canada is the second largest market for American liquor exports. So alcohol stocks are also down on the tariff news. You know, the alcohol trade is a critical piece of the economic relationship between U.S. and Mexico. Because of America's infatuation with the Mexican beer, Mexico is a Mexican beer. Mexico accounts for about 83% of beer imports to the U.S.

The most popular beer brands in America are Corona and Modelo. They're owned by the company Constellation Brands. And we can't forget about tequila. U.S. imports of Mexican tequila and mescal totaled $4.66 billion last year. That's up 160% from 2019. So these tariffs might shake up the alcohol industry and the importing and exporting of alcohol across the U.S. Mexico and U.S. Canada borders. If you want to do a deeper dive on tariffs, check out one of our deep dive

episodes that we did from a few weeks ago. It's jam-packed with information and it's more relevant now than ever. We'll drop a link in the description of that episode to go check it out. Let's talk about some stocks making moves today. There's not a lot of green on the board today, but one winner shaking off the tariff's sell-off is Tyson Foods. Tyson raised its profit outlook for 2025 after the meat producer delivered its best earnings performance in two years. Low cost for corn and soybeans helped lift profitability for its chicken business, which helped offset losses in its beef business. Tyson food stock is up around 2% this morning in reaction to their earnings. On the flip side, there are a lot of losses today, but I want to call out crypto because it is

falling sharply as investors reassess riskier trades. Bitcoin is down to $95,000 this morning, and Ethereum is being hit especially hard, down more than 15% over the past 24 hours. Other alt alt coins like Solana, which has been on a tear recently, is back down below $200 after reaching $285 less than a month ago. Now, Bitcoin and others have recovered a bit since Mexico announced the pause on tariffs. But something to watch out for. Let's wrap the show with a fun fact. Open AI is launching AI agents for chat GPT Pro. Open AI announced these new features last night, saying that these new additions help users with deep research, providing users the ability to obtain more detailed responses from the chat box. I mean, Open AI has previously claimed

its agents have the capabilities of research analysts, and they said the agent's response can take between five to 30 minutes, so it's a pretty slow process. But if your job requires research, it looks like this new tool will be your new best friend. Now, this new tool will only be available to chat GPT pro users to start out, which cost $200 a month. But they're eventually going to roll it out to the plus users, which costs $20 a month, but there is going to be a limit on how much you can use it. Now, just as a heads up, Open AI themselves warned that this new tool can just make up responses. So just be a little careful in the early days. I wonder if Dallas Mavericks use this tool to write a deep dive research on Luca

and got some really bad information back and traded him away to the Lakers. I still can't believe that happened. It might have been the most shocking news at the weekend. Well, all right, guys, that's the rundown for today. Another wild start of the week. Didn't think that last week could be topped with the deep seek drama.

But here we are. We're going to have a lot to talk about this week to fall out from the tariffs. We're also going to have a lot of earnings to recap like I mentioned in the intro. We got the job support as well. So another busy week coming up. We're going to be covering it all in the podcast.

So it's a great time to subscribe to the podcast if you haven't already. shared this podcast with someone who might find it useful. And if you have like 15 extra seconds, consider giving us a five-star rating on Apple, on Spotify, vote in today's Spotify poll, leave us a comment on Spotify. All that engagement really does help us out, and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes.

And we'll see you guys back here tomorrow. This is the rundown. Your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell or hold that security. Rounddown guests are not financial advisors and are not affiliated with public holdings or its subsidiaries.

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