💰 5 Fact Friday: The Mag 7 Become The Lag 7

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The Supply Chain Crisis Is Escalating — But This Tech Startup Keeps Winning

Global supply chain chaos is intensifying. Major retailers warn of holiday shortages, and tech giants are slashing forecasts as parts dry up.

But while others scramble, one smart home innovator is thriving.

Their strategic move to manufacturing outside China has kept production running smoothly — driving 200% year-over-year growth, even as the industry stalls.

This foresight is no accident. The same leadership team that saw the supply chain storm coming has already expanded into over 120 BestBuy locations, with talks underway to add Walmart and Home Depot.

At just $1.90 per share, this resilient tech startup offers rare stability in uncertain times. As investors flee vulnerable companies, this window is closing fast.

SECURE YOUR POSITION BEFORE PRICES RISE

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ECONOMY
1. Forget Inflation—It’s All About Tariffs Now 🌎 

For a brief stretch, the economy was on its best behavior.

Inflation was easing, the labor market was slowing just enough, and Wall Street was practically begging the Fed for rate cuts. By late 2023, markets were so optimistic they priced in six rate cuts for 2024.

Then reality hit. Job growth moderated, inflation flatlined at 3%, and higher rates went from an annoyance to a necessity to keep prices at bay. The Fed ultimately delivered 3 cuts worth 1.0%, and expectations downshifted to zero rate cuts in 2025.

Cue tariffs.

Like a curveball nobody quite expected, they flipped the economic story overnight. Suddenly, expectations are up to three cuts in 2025.

But here’s the twist: these aren’t the happy, growth-boosting cuts the Fed would choose. They’re the kind investors worry might be forced—to dodge a recession.

Of course, the latest core CPI report showed the lowest inflation rate since April 2021. Normally, that would’ve sent markets soaring.

But now? If it’s not about tariffs, it’s not moving the needle. They’re the new make-or-break for businesses, plain and simple.

So, if the old “rate cut or bust” debate is off the table, what’s the game plan now?

Here’s how things could shake out:

📉 Stagflation Strikes: Prices rise due to higher import costs, but demand slides as consumers and businesses tighten their belts. Inflation sticks around, growth slows, and earnings take a hit—dragging stocks down.

⚠️ Recession Warning: Tariffs curb demand, slow business activity, and cool hiring. The Fed cuts rates out of necessity, but lower borrowing costs don’t fix weak earnings or rising input costs.

🎯 Tariffs Thread the Needle: International suppliers absorb the levies, domestic production booms, and consumer spending holds up. Jobs pop up, profits hum along, and we all breathe a sigh of relief.

Unfortunately, most investors aren’t banking on that Goldilocks outcome.

Whether tariffs ignite inflation, crush demand, or somehow spark a miracle, one thing’s clear: economic data is old news. For now, it’s all about those shifting tariff winds—and hoping they don’t blow us off course.

STOCKS
2. The Mag 7 Become The Lag 7 📉  

After leading the S&P 500 for two years, the Magnificent Seven have slammed into a wall. AI hype is fading, tariff fears are rising, and even these former safe havens aren’t immune from the selloff.

But there’s one exception: $META ( ▼ 0.55% ) 

Zuckerberg’s social media empire is the only Mag 7 stock still in the green this year.

Why Is Meta Holding Up?

1. No China Exposure – Unlike Apple, Amazon, and Tesla—whose supply chains and sales rely heavily on China—Meta is insulated from Trump’s tariff war.

2. AI That Actually Makes Money – While others bet on AI’s future, Meta’s AI investments are already paying off. Ad prices jumped 14% in Q4, thanks to smarter targeting and content recommendations.

3. Cost Discipline Wins – After burning tens of billions on the metaverse, Meta slashed costs in 2023 with Zuck’s “Year of Efficiency.” That discipline continues, with net income soaring 59% YoY last quarter.

4. TikTok Troubles = Meta’s Opportunity – A TikTok ban is still on the table, which could be a massive boost for Meta. Even if that doesn’t happen, spinning off Reels into a standalone app sets up a direct battle for short-form video dominance.

The Bottom Line

Meta may not be soaring, but it's holding ground better than its Mag 7 peers. With resilient ad revenue and zero tariff exposure, it’s proving more stable in a shaky market.

If uncertainty lingers—think sticky inflation, trade spats, and a hesitant Fed—Meta’s relative strength could keep it ahead of the pack.

STOCKS
3. No More Free Rides At Southwest ✈️

Say goodbye to free bags—Southwest is changing course.

After 54 years of their beloved Bags Fly Free policy, the airline is officially joining the nickel-and-dime era on May 28th. 

Wall Street loved the announcement. Southwest stock—$LUV ( ▲ 2.58% )—jumped 8% after the announcement. Apparently, investors are comfortable trading differentiation for fee income. 🤔

Why The Change?

1. Wall Street Pressure – Elliott Investment Management took a $1.9B stake in Southwest last year and has been demanding big changes to boost profits.

2. New Leadership, New Rules – The company started the year with a new CFO and just laid off 15% of its corporate workforce. With an industry-wide slowdown hitting both consumers and businesses, Southwest is scrambling to adjust.

3. Price Over Perks – The airline’s own data shows that passengers often choose cheaper fares over Southwest’s freebies. Now, it’s rolling out basic economy fares and listing flights on third-party sites like Expedia to attract more budget-conscious travelers.

But it’s not just baggage fees. Southwest is also introducing assigned seating, premium seats, and flight credit expirations—all moves that blur the lines between Southwest and its traditional rivals.

The Big Question

Southwest’s entire identity was built on simplicity, no hidden fees, and a fun flying experience. Now? It's looking a lot more like… everyone else.

PERSONAL FINANCE
4. The Retirement Plan That Puts 401(k)s To Shame 🔥

If you’re maxing out your 401(k) and wondering how high-earners stash even more cash tax-free—meet the cash balance plan (CBP).

It’s a lesser-known retirement savings tool that’s exploded to $1.2 trillion in assets. Doctors, lawyers, and business owners swear by it, and for good reason.

What Is A Cash Balance Plan?

Think of it like a 401(k) on steroids—but technically, it’s a pension.

Employers (or self-employed high earners) sock away a chunk of income—often a percentage of salary—into a pooled fund. That fund promises a steady return, typically 3% to 5%, and the money grows tax-deferred until retirement.

Unlike a 401(k), which caps contributions at $69,000 in 2025 (or $76,500 for those over 50), CBPs let you dump in six-figure sums annually—sometimes as much as $300,000.

Who Benefits Most?

✅ Business owners—especially in high-earning fields like medicine, law, and finance

✅ Late-start savers who need to catch up fast

✅ Anyone in a high tax bracket looking for monster deductions

What’s The Catch?

💰Mandatory contributions: You’re locked into funding the plan every year, and setting one up involves actuarial fees—which can be expensive to administer.

📉 Investment risk for employers: If the fund’s returns dip below the promised rate, the employer (or you, if self-employed) has to pony up the difference.

😅 Less flexibility: Unlike a 401(k), where you can tweak contributions year to year, CBPs follow a rigid formula tied to income and age.

The Bottom Line

For the right high-earning professional, a CBP is a game-changer—accelerating retirement savings, slashing taxes, and paving the way for multi-million-dollar nest eggs.

But it’s not a set-it-and-forget-it deal. It demands active management, financial commitment, and a stomach for the upfront costs.

If that fits your profile, a CBP could be the turbo boost your retirement needs.

STOCKS
5. Guess That Stock 🕵️‍♂️

This social media company was one of the hottest IPOs of 2024, but after a meteoric rise, reality is setting in. Can you name the stock?

1. Known as the “front page of the internet,” the platform is home to millions of anonymous discussions, niche forums, and viral Q&As—drawing 380 million weekly users.

2. The stock more than tripled in 2024—its first year as a public company—but has since crashed 25% in 2025.

3. A slowdown in Google Search traffic led to weaker-than-expected user growth last quarter, but CEO Steve Huffman says traffic has since recovered.

4. With only half the ad loads of other platforms, analysts see a huge revenue opportunity. But valued at ~10x projected 2026 sales, some say the stock is still expensive.

5. The company’s billionaire founder is now eyeing TikTok, joining an investor group that includes YouTube star MrBeast in a bid to acquire the Chinese-owned app.

Got a guess? Tap here to reveal the answer → 

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