Silver banana goes to…

In this issue of the peel:

• 😔 A rogue, fake tweet sent markets on a wild roller coaster ride to start the day.

• 🙅 Trump tells Xi he’ll slap an additional 50% tariff on China if they don’t take back their retaliatory tariff.

• ❌ A history of bear markets can shed some light on how to manage your portfolio.

Banana Bits

• Trump and President Xi are in a pissing match with each other for all the world to see.

• Apple has lost almost $650 billion in market cap in just three short days.

• The market saw the shortest ever pump and dump on the back of a fake White House Tweet.

• Forget about potential, some CEOs think we’re in a recession right now.

• Check out a long history of bear markets in the US with this one chart.

• A record number of Americans are in cash and money market funds.

The Daily Poll

Previous Poll:

Are these tariffs strategic or reckless?

4D chess: 24.4% // Total disaster: 52.6% // Depends on retaliation: 23.0%

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Macro Monkey Says

Big Swingers

Donald Trump isn’t backing down to anyone. He’s ramped up his trade battle with China, threatening to slap an additional 50% tariff on Chinese imports unless Xi drops its retaliatory 34% tariff immediately. This would push the total tariff rate on Chinese goods to 104%—a number that is too laughable to have any basis in actual truth or reality. 

The scriptwriters for the USA government are amazing. The tension that’s been building up between the two countries was better paced than a White Lotus episode. The back-and-forth has been there for years, since Trump’s first time in office, and you knew it had to explode at some point.

In his post on Truth Social, Trump emphasized his respect for Chinese President Xi but made it clear that the US can’t keep footing the bill for a lopsided trade deal. The President also warned that any potential talks with China would be off the table unless Beijing complies with his demand. 

His economic team, including National Economic Council Chair Stephen Miran, argued that these tariffs could help lower the US trade deficit and even fund tax cuts, all while working toward reducing America’s reliance on Chinese goods.

Alongside the tariff threats, Trump mentioned ongoing discussions with Japan and European countries about their own trade agreements. Meanwhile, the global ripple effect of these policies is already being felt, with countries like Israel easing trade restrictions with the US as a result. 

With all these moving parts, it looks like trade relations will remain in the spotlight, but for now, we’re all just waiting to see how this high-stakes trade drama unfolds.

The Takeaway?

Trump’s latest tariff threat on China is a bold move to reset trade relations, but it also raises the stakes in an already tense trade war. 

With the possibility of tariffs reaching 104%, both sides are playing a high-risk game. While the goal is to reduce the US trade deficit and lessen dependency on China, the global fallout could be significant. Stay tuned—the next few days will likely be crucial in determining whether this standoff ends in a deal or more economic friction.

Career Corner

Question

I'm currently in London, and an analyst I reached out to asked me if I could send him an email so we can find a time to connect. The problem is that I don't know if he thinks of an in-person or over-the-phone meeting. How would you recommend structuring my email?

Answer

You can simply put:

“I'd love to meet you over the phone or in person. Let me know what works best for you!”

Head Mentor, WSO Academy

Check out WSO Academy!

What's Ripe

United States Steel Corp (X) 16.2%

• ​We did it, everyone! Manufacturing is officially back. Mission accomplished. No, not actually. US Steel’s stock is getting a boost because Trump announced he would take another look at the deal with Japanese company Nippon Steel. 

• As a reminder, the deal was blocked by Biden, citing concerns of a large US manufacturer merging with a non-US company. 

• But wait, by allowing the deal to go through, wouldn’t that go against Trump’s “America First” agenda? At this point, it’s not worth trying to make sense of anything.

Restoration Hardware (RH) 12.9%

• You know you’ve got a volatile stock when you end up on both the What’s Rotten list and the What’s Ripe list all within a few days. 

• For starters, RH had the absolute worst possible timing for its earnings call last Wednesday, announcing them at the exact same time Trump pulled out his giant piece of cardboard. 

• The stock was blown out by 40%, but after the company released updated guidance, investors started jumping back in.

What's Rotten

Alibaba (BABA) 9.0%

• With Chinese stocks getting hit, consumer companies are really facing a squeeze. Retail giants like Alibaba and JD stand to lose the most as a large part of their customer base is global and intertwined with US consumers.

Chinese Stocks (FXI) 8.4%

• Chinese stocks are feeling the pressure from the global trade war, with escalating tensions each day. The most recent story is the President threatening to impose an additional 50% tariff if China doesn’t remove its retaliatory tariff.

Thought Banana

Lions, Tigers, and Bears

Let’s face it. Markets are on a complete roller coaster ride, and not the fun kind. Nobody has any idea just how volatile things can get and for how long. At this point, the S&P and NASDAQ are both ~20% from their all-time highs set in February of this year and are officially in a bear market. 

Things got even crazier yesterday when a fake tweet that the White House was considering a 90-day tariff reprieve sent markets roaring back. Based on the tweet, the S&P rose 7% in a matter of minutes, only for it to be revealed that it had no basis in reality. 

Before you could go to the bathroom and get back to your seat, the market had given up all of those gains.

Markets are always volatile, but this is another level. The Dow had its largest intraday swing on record—ever. Have we hit a bottom, and it’s only up from here? Is the market going down more, or will we be in a zombie drug-induced neutral state for a while? 

The only correct answer is that even professionals don’t know what the heck to do at this point. So, your dorm roommate who’s giving you financial advice based on sophisticated analysis and eloquent pitches like “it’s obvious bro” and “just trust me” is likely full of sh*t.

That being said, there are two sides to every coin. An investor who purchased the S&P in December 2023 saw their portfolio increase 20%, but right now, is right back where they started. 

The flip side is, if you were twiddling your thumbs and didn’t invest anything into the market over the last two years, you could start right now and get the exact same price that someone who invested in December 2023 got. 

Looking at the data, between 1945 and March 2025 (let’s leave out The Great Depression for now :) we’ve had 24 corrections (a decline between 10% and 19.9%). 

That average decline was 14%. The peak to trough on average was 4 months, and once a bottom was hit, it took another 4 months for a new peak to form. Alternatively, we’ve had 14 bear markets (decline of >20%). In these cases, it took a bit longer to hit the bottom, around 13 months, and then 23 months to form a new peak. 

The Takeaway?

While down markets can hurt psychologically and feel like they’re taking forever, in the long-run, they are a drop in the bucket. Looking at the chart, the Great Depression, which was a multi-year period of declining stocks, barely even registers on the chart.   

The Big Question: Are we in the middle of a correction, a full-blown bear market, or just a really intense group therapy session for investors?

Banana Brain Teaser

Previous

November 16, 2001, was a Friday. If each of the years 2004, 2008, and 2012 had 366 days, and the remaining years from 2001 through 2014 had 365 days, what day of the week was November 16, 2014?

Answer: Sunday

Today

How many prime numbers between 1 and 100 are factors of 7,150?

Send your guesses to [email protected]

How Would You Rate Today's Peel?

Happy Investing,
Chris, Vyom, Ankit & Patrick

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