📦 Weekly Overview: Recession? Investment Banking? Salaries

WEEKLY OVERVIEW

📉 Tariffs & Trillions Lost: Why the Market Just Got Rocked

April 2025 just delivered one of the most dramatic market crashes since COVID — and this time, it wasn’t about inflation or interest rates. It was tariffs.

📦 On April 5, the Trump administration implemented a universal 10% tariff on all U.S. imports.
🌍 Starting April 9, country-specific tariffs hit harder: 24% on Japanese imports, 20% on European Union goods, and 34% more on Chinese products — on top of what already existed.
🚨 That raises the average U.S. tariff rate to 25%–30%, the highest in over 100 years.

💸 Yale’s Budget Lab estimates the tariffs equal a $660 billion tax increase — or 2.2% of U.S. GDP.
👨‍👩‍👧 That translates to $4,200 per year in added costs for the average American household.

🧨 How the Market Reacted

Markets didn’t pull back — they collapsed.
📉 The Dow dropped 1,679 points (around 4%)
📉 The Nasdaq plunged 6%
📉 The S&P 500 sank nearly 5% - In one day, over $3.1 trillion in market value vanished.
📉 Since mid-February, the total loss has passed $7 trillion.
🐻 The S&P 500 is in correction territory (down 10%+), while the Nasdaq and Russell 2000 have entered full bear markets (down 20%+).
⚰️ The “Magnificent 7” tech names — Apple, Nvidia, Amazon, and friends — are down 25% or more since December.

This wasn’t a dip. It was a reset — and the ripple effects are just starting

🌍 Global Fallout Begins

Other countries didn’t just watch — they fired back.

🇨🇳 China hit back with 34% new tariffs on U.S. imports and restricted exports of rare-earth materials. Eleven American firms were added to its “unreliable entity” list, escalating economic tensions.

🇪🇺 The European Union is preparing tariffs on $28 billion worth of U.S. goods, though internal disagreements within the bloc could delay or soften the response.

🇯🇵 Japan’s Prime Minister called the tariffs a “national crisis” as local markets plunged, especially in the banking sector.

A full-blown global trade war is now officially on the table

🔍 What to Watch Next

📉 Recession risk now at 60% (JPMorgan estimate)
🔥 Inflation could rise by 1–2%, pushing core inflation to 5%+
📊 2025 GDP forecasts cut from 2% to 0–1%
💵 10-Year Treasury yield dropped below 4%
📉 Markets expect 3–4 Fed rate cuts this year

STUDENTS

🎓 What It Means for Students

💼 IB recruiting will tighten — fewer spots, more competition
📚 Volatility is free training — watch how macro impacts markets
🧠 Interviews are shifting — macro > micro, know rates, inflation, policy
⌛ Expect delays — boutiques and MM firms may pause hiring. Stifel, Bank of America and HSBC are a few firms that have cut their divisions and are currently on a “hiring freeze.”

WEEK 2 TOPIC

💼 What Is Investment Banking — and Why It’s Still the Most Powerful First Job in Finance

Investment banking is a segment of the financial industry focused on helping companies raise capital and execute major transactions like mergers, acquisitions, and IPOs. Investment bankers advise CEOs and executives on how to sell equity, issue debt, or buy and sell entire businesses. They act as the middlemen between companies and investors, structuring deals, valuing businesses, and navigating complex financial strategies. It’s a high-stakes, high-reward environment that plays a central role in shaping corporate finance and the global economy.

💰 It Pays Insanely Well
Most entry-level jobs start at $50K–$70K. Investment banking? You're looking at $110K–$125K base salary, plus bonuses. First-year analysts often walk away with $150K–$200K total comp.

🚪 It Opens Every Door in Finance
Private equity, hedge funds, venture capital, corporate development—almost every high-paying role prefers analysts with IB experience. It’s the ultimate stamp of approval.

🧠 You Learn More in One Year Than Most Do in Five
You’ll build financial models, work on real transactions, and sit across from billion-dollar clients—before most of your peers finish their first internship.

⚠️ But It’s Not for Everyone
60–100 hour workweeks. High pressure. No time off. If you’re not obsessed, you’ll burn out. But if you are, the upside is unmatched.

💬 Real Talk: How Much Do Investment Banking Analysts Actually Make?

Many firms also cover dinners, Ubers, and cell phone bills. You’ll never cook, but you also may never sleep.

💼 Investment Banking Salary Breakdown

💵 1st-Year Analyst
– Base: $110K–$125K
– Bonus: $40K–$60K
– Total Comp: $150K–$185K

💵 2nd-Year Analyst
– Base: $125K–$150K
– Bonus: $60K–$80K
– Total Comp: $185K–$230K

💵 Associate
– Base: $175K–$225K
– Bonus: $100K+
– Total Comp: $275K–$400K+

☑️TO-DO LIST

📉 Buy Quality While It’s Discounted
The best names are on sale. Apple down 9%, Nasdaq down 6% — this is where long-term winners get in. Focus on companies with strong balance sheets, real cash flow, and pricing power.

🧠 Learn in Real Time
This is a live-fire exercise in macro, markets, and psychology. Watch how assets react to policy changes. Track how sectors rotate. This is better than any textbook.

📊 Pitch Like You Trade
Use this market for your interview edge. Have a stock idea that’s actually timely. “Why do you like it now?” matters more than ever. Be able to speak to risk, timing, and catalysts.

💼 Position for a Hiring Rebound
Tough markets weed out the lazy. Keep building relationships while others pause. When hiring picks back up (and it will), you’ll be top of mind — not scrambling to catch up.

BEFORE YOU GO!

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- Jai 

Founder of TheFinanceGrind