Silver banana goes to…

In this issue of the peel:

• 📉 Tesla tumbled 14.3% after CEO Elon Musk publicly clashed with Trump over a bill that threatens EV tax credits.

• 📦 U.S. trade deficit shrank 55.5%, driven by a record 16% drop in imports as tariff anxiety rattled global supply chains.

• ✂️ Procter & Gamble slashes 7,000 jobs worldwide in a bid to streamline operations and protect profit margins.

Market Snapshot

Banana Bits

• Procter & Gamble to cut 7,000 jobs globally amid restructuring aimed at boosting efficiency and margins.

• Trump proposes visa incentives for international student inventors, hoping to retain top tech talent post-graduation.

• Cr*pto firm Circle saw its shares surge in its stock-market debut, marking another milestone in the push to mainstream digital currencies.

• Germany’s industrial production drops in April as tariffs weigh on export demand and factory output.

• RBA remains upbeat on China, citing Beijing’s willingness to take bold action to meet growth targets.

• Companies tone down climate commitments in investor reports amid regulatory scrutiny and political pressures.

The Daily Poll

Previous Poll:

What worries you most about the current macro climate?

Data uncertainty: 19.6% // Tariff shocks: 61.9% // Fed missteps: 18.5%

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Macro Monkey Says

Import Slowdown Tightens Trade Deficit

The U.S. trade deficit shrank by a dramatic 55.5% in April to $61.6 billion, its lowest level since September 2023, thanks to a record-setting 16% plunge in imports. Imports of goods and services fell to $351 billion, led by a 32% drop in consumer goods. 

The largest single contributor? Pharmaceuticals, down $26 billion, after drugmakers rushed inventory into the U.S. earlier this year to dodge potential Trump-era tariffs. The decline in imports reflects a normalization following a surge in front-loading activities by companies aiming to preempt impending tariffs.

Economists noted that companies are still working through stockpiled inventory from that import frenzy. But don’t get too cozy with this narrower deficit—many economists think it’s temporary. Uncertainty around where tariffs will ultimately land has kept companies jittery. 

The Trump administration's early April move to impose sweeping 10% reciprocal tariffs, followed days later by a 90-day pause (excluding China, which saw tariffs spike to 145% before falling in May), sent shockwaves through trade planning.

Goods imports saw a notable decrease of 19.9%, particularly in consumer products such as pharmaceuticals, cellphones, and household goods, as well as industrial materials and motor vehicles. Imports from Canada and China reached multi-year lows, while imports from Vietnam and Taiwan hit record highs, indicating a shift in global supply chain dynamics.

On the export side, there was a 3.0% increase to a record $289.4 billion, driven by a surge in industrial supplies, capital goods, and services. This improvement in the trade balance may bolster economic growth in the second quarter, depending on inventory levels and consumer demand.

The Takeaway?

April’s dramatic drop in the U.S. trade deficit was driven by collapsing imports as firms digested stockpiles from earlier tariff dodging. Pharmaceutical goods led the plunge, alongside auto parts and materials. While the narrower gap may look like progress, it’s likely a short-lived reprieve amid tariff whiplash from Washington. 

As companies recalibrate to President Trump’s shifting trade stance, expect volatility to return—and the deficit to follow suit. Don’t mistake a pause for a pivot.

Career Corner

Question

Hi everyone, does the Bloomberg Terminal have a function that allows you to search for bond issuances or IPOs that a bank has done for its clients?

Answer

Hi. Yes.

For Bond Issuances:

You can use the FIW function, then filter by issuer, underwriter, or bookrunner. If you want to focus on a particular bank, you can search for that bank as the underwriter to view the bond deals it has led or been involved in.

Another option is using BVAL for bond pricing data, which also tracks issuance information.

For IPOs:

The IPO function on Bloomberg allows you to search by bank, underwriter, or deal specifics. You can filter by the underwriter to see which IPOs a particular bank has been involved in.

Head Mentor, WSO Academy

Check out WSO Academy!

What's Ripe

Nebius Group NV (NBIS) 17.5% 

• Shares of Nebius Group jumped 17.5% on Thursday, after the cloud infrastructure provider announced it had secured $1 billion via convertible notes to bolster its artificial intelligence operations. The capital infusion will accelerate Nebius's AI development roadmap, a strategic move aimed at capitalizing on long-term opportunities in the rapidly growing AI sector. 

MongoDB (MDB) 12.8% 

• MongoDB experienced a 12.8% increase, following the release of its robust Q1 fiscal 2025 earnings. The company reported a 22% year-over-year revenue growth to $549 million and adjusted earnings of $1.00 per share, surpassing analyst expectations. 

• The strong performance was driven by a 26% revenue growth in Atlas, MongoDB's cloud-based subscription database. Analysts expressed optimism about the company's prospects in AI-driven data demand and Atlas monetization. 

What's Rotten

Tesla (TSLA) 14.3%

• Tesla shares plummeted 14.3% to $284.70 amid escalating tensions between CEO Elon Musk and President Donald Trump. The conflict arose over Trump's proposed "Big Beautiful Bill," which threatens to eliminate EV tax credits, potentially impacting Tesla's profitability. 

• Musk's public criticism of the bill and call for Trump's impeachment further fueled investor concerns, leading to a significant sell-off.

Palantir Technologies (PLTR) 7.8%

• Palantir fell 7.8%, snapping back after hitting an all-time high earlier in the week. The decline was triggered by broader market weakness and technical pressure, as the stock closed below the key $120 level and breached its 20-day simple moving average—a bearish signal for momentum traders. 

• While Palantir recently secured new contracts, the correction raised questions about its valuation amid increased competition and macroeconomic uncertainty. 

Thought Banana

Tight Labor Market Faces Uncertain Path

Amid shifting policies and global uncertainties, the labor market remains the key area analysts are watching closely. In May 2025, economists anticipate a slowdown in job growth, with projections estimating the addition of approximately 130,000 nonfarm payrolls, down from 177,000 in April. 

Despite this deceleration, the unemployment rate is expected to hold steady at 4.2% for the third consecutive month. 

Several factors contribute to this cautious outlook. Businesses are grappling with uncertainties stemming from recent tariff policies and immigration reforms, leading to a more conservative approach to hiring. Manufacturing and construction sectors, in particular, have felt the pinch due to increased costs of raw materials and labor shortages. 

Interestingly, while hiring slows, wage growth remains resilient. Average hourly earnings are projected to rise by 0.3% month-over-month and 3.7% year-over-year, indicating that employers are still willing to pay a premium for talent in certain sectors. 

This delicate balance between cautious hiring and sustained wage growth suggests that while the labor market is cooling, it hasn't lost its underlying strength. However, the path forward remains uncertain, with businesses and policymakers closely monitoring economic indicators to gauge the health of the job market.

The Takeaway?

May's anticipated slowdown in job growth reflects businesses' cautious stance amid policy uncertainties, particularly concerning tariffs and immigration. Despite the deceleration, steady unemployment rates and resilient wage growth indicate an underlying strength in the labor market. 

As the economy teeters between growth and stagnation, the labor market's performance will be pivotal in shaping future monetary policies and business strategies.

The Big Question: Is the labor market a ticking time bomb or still ticking strong?

Banana Brain Teaser

Previous

If each of the 12 teams participating in a certain tournament plays exactly one game with each of the other teams, how many games will be played?

Answer: 66

Today

The present ratio of students to teachers at a certain school is 30:1. If the student enrollment were to be increased by 50 students and the number of teachers were to be increased by 5, the ratio of students to teachers would then be 25:1. What is the present number of teachers?

Send your guesses to [email protected]

How Would You Rate Today's Peel?

Happy Investing,
Chris, Vyom, Ankit, Mithun, Colin & Patrick

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