In this issue of the peel:

• 📝 The NASDAQ hits an all-time high as it continues to outperform the S&P 500 due to the bullish sentiment surrounding tech stocks.

• 📉 The U.S has reached a trade deal with Vietnam to impose tariffs on Vietnamese goods, as opposed to the previous lower tariffs.

• 💸 The Fourth of July could end up being the most expensive holiday for Americans…. Next year. 

Market Snapshot

Banana Bits

• Nike’s stock rose in light of the deal between the U.S and Vietnam, with a 20% tariff on Vietnamese goods.

• Trump’s tax bill continues to face GOP resistance in the House despite being barely passed by the Senate. 

• The Pentagon is under attack after it decided to halt the shipment of certain air-defense weapons to Ukraine.

• Bill Ackman is attempting to make tennis history by winning the Hall of Fame Open with Jack Sock, a professional tennis player. 

• Dr Phil’s media company is filing for bankruptcy. We guess emotional support doesn’t help with finances. 

• Diddy was found not guilty of “Sex Trafficking and Racketeering” in a trial.

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Macro Monkey Says

U.S and Vietnam Trade Agreement

On Liberation Day, President Trump announced that he would impose 46% tariffs on all Vietnamese goods, which were then paused within a few weeks. While the 46% tariffs paled in comparison to the 145% Chinese tariffs, 46% tariffs were still a significant cost to many businesses that manufactured in China. 

In response to the sky-high Chinese tariffs, consumer discretionary companies that manufactured in China decided to move manufacturing, like Nike. Nike, which already had a strong presence in Vietnam, decided to move much of its manufacturing from China to Vietnam and other countries to avoid financial reliance on tariffs. 

If Nike hadn’t moved manufacturing, it would have taken a $1 billion hit; however, it was able to mitigate that somewhat as a result of the manufacturing shift. While Nike still produces in China at a rate of around the high single digits, it plans to reduce this even further by the end of 2026. 

Additionally, this news was very crucial for other apparel companies like On Holding AG (NYSE: ONON), who manufacture most of their goods in Vietnam. 

While the 20% tariff was higher than many investors' expectations, it represents a certainty surrounding what the future will hold, which the economy has recently been deprived of. 

Furthermore, a 20% tariff is still a significant charge for companies like Nike and On, but on the other hand, since they know that it is a constant rate, they can adjust their business accordingly and make a plan to mitigate the effect of the tariff. 

The Trump Administration and the European Union have also not yet agreed on their trade terms, with the July 9th deadline fast approaching. It is a definite possibility that they will extend the pause in order to reach a mutually beneficial trade agreement. 

The Takeaway?

Markets continued to soar to all-time highs following the announcement of the trade deal between the U.S. and Vietnam, but the EU and the U.S. have yet to strike a deal. While this deal is definitely positive for the overall economy and companies manufacturing in Vietnam, investors won’t be out of the woods until a compromise is reached between Trump and the EU.  

Career Corner

Question

I'm aiming to recruit from IB San Francisco and currently attend Berkeley. I've run out of Berkeley IB alumni in SF to connect with on LinkedIn. What should my next move be? Also, how many calls should I aim to have over the next few months (I'm recruiting for summer 2026)? I've had 11 calls so far.

Answer

Some students are hitting 5-6 calls a week. It's about the depth of the connection and building a long-term relationship. Find warm connections: referrals, alumni, interest clubs, common firms, etc.

Head Mentor, WSO Academy

Check out WSO Academy!

What's Ripe

Rigetti Computing Inc. (RGTI) 15.5% 

• Rigetti Computing, a quantum computing company, saw massive gains due to several banks raising their price targets for the stock, including Cantor Fitzgerald and Needham. This increase in stock price can also be partially attributed to the overall bullish sentiment surrounding tech stocks, as well as the Vietnam trade deal. 

Marathon Digital Holdings (MARA) 13.4% 

• Marathon Digital Holdings, a digital assets company, witnessed significant gains in the market today as a result of increased price targets by banks and overall crypto momentum. In addition to Barclays and Rosenblatt increasing their price targets, investor optimism surrounding crypto miners has increased. 

What's Rotten

Centene Corporation (CNC) 40.4%

• Centene Corporation saw significant losses today after withdrawing its guidance for 2025, erasing approximately $1.8 billion in expected earnings. They have reportedly been experiencing “unexpected cost pressures” in addition to enrollment issues with Medicare and Medicaid. 

• Additionally, since they are a healthcare company primarily focused on government-sponsored programs, Trump's tax bill, which includes Medicare and Medicaid cuts, is definitely not helping their case. 

Molina Healthcare Inc. (MOH) 22.0%

• Centene’s guidance withdrawal hit the managed care space square in the teeth, with its effects reverberating to other companies, such as Molina, Humana, and UnitedHealth. Investors appear to be expecting other healthcare companies to withdraw their guidance for the year, particularly in light of the potential loss of ACA tax credits. 

Thought Banana

Freedom’s Getting Expensive

July 4th, or Independence Day as it's known in the U.S, is hallmarked by one item: the fireworks. If you are anywhere on U.S territory, you can be assured to hear the explosion of fireworks throughout the night, unless you're in Massachusetts, where they’re illegal (but still used).

Something else to note about fireworks is that there has been an apparent shift from consumer fireworks to display fireworks. Display fireworks are massive fireworks you are likely to see at some kind of firework show, and consumer fireworks are often smaller-scale fireworks that you can buy in gas stations and convenience stores. 

The shift is that sales for consumer fireworks are significantly more than sales for display fireworks.

The potential price hike for America’s 250th Birthday next year will likely come at the expense of China. China was actually the country to invent the explosive firework, and also produces 99% of fireworks worldwide, holding a significant monopoly. 

The price hikes for fireworks would result from Trump’s tariffs, which would impose a 30% import tax on products like fireworks. According to Julie Heckman, executive director of the American Pyrotechnics Association, tariffs were levied so late in the timeline of July 4th preparations that they would not impact firework pricing. 

The “sheer volume” with which China can produce fireworks has often been described as “unmatched.” While tariffs incentivize U.S companies to source or manufacture elsewhere, that would be difficult for fireworks since they’ve only been produced in China, making offshore production a significant challenge. 

The Takeaway?

As far as the 4th of July goes, there really isn’t another product that screams “America” and “freedom” like fireworks do, essentially becoming a staple for Independence Day. That being said, there could definitely be some expensive fireworks for America’s 250th anniversary if tariffs are kept in place. 

The Big Question: Can the U.S. celebrate independence without being dependent on Chinese fireworks?

Banana Brain Teaser

Previous

Seed mixture X is 40% ryegrass and 60% bluegrass by weight; seed mixture Y is 25% ryegrass and 75% fescue. If a mixture of X and Y contains 30% ryegrass, what % of the weight of the mixture is X?

Answer: 100/3%

Today

In a certain game, a large container is filled with red, yellow, green, and blue beads worth, respectively, 7, 5, 3, and 2 points each. A number of beads are then removed from the container. If the product of the point values of the removed beads is 147,000, how many red beads were removed?

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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