Market Hits Nap Mode

😴 Markets have gone back to being boring again after a crazy few weeks.

April 16, 2025

In this issue of the peel:

  • 😴 Markets have gone back to being boring again after a crazy few weeks.

  • 🏦 Wall Street trading desks racked up last quarter on heightened volatility.

  • 👔 Activist investor Elliott Management takes an ownership stake in Hewlett-Packard.

Market Snapshot

Banana Bits

Avoid Market Rollercoasters: Secure a Fixed 7% APY with Worthy Bonds

Are you a bit alarmed at the stock market's unpredictable plunges, watching your hard-earned savings erode with each downturn? For too long, the landscape of personal finance has presented a limited choice: the meager returns of traditional bank accounts or the stress-inducing volatility of the stock market. Isn't it time your money worked harder for you while buffering you from the turbulence of the market?

Discover Worthy Bonds, a refreshing alternative designed for consistent growth and peace of mind. Worthy offers a fixed 7.0% APY*, providing an attractive, fixed, and predictable return without being subject to market volatility.

Worthy Bonds Offer:

  • A fixed 7.0% APY* – Consistent growth in an inconsistent economy

  • Bonds are only $10 each – Investing made easy for everyone

  • Access your funds anytime – Anytime access without incurring any fees or penalties

  • No restrictive maturity dates or minimum balance requirements – Experience the ease and convenience of truly flexible investing.

  • The power of daily compounding interest – Watch your earnings accumulate faster as interest is calculated and added to your principal daily.

  • Accelerated growth through Roundups – Watch your earnings grow even faster by investing your spare change

Backed by a portfolio of residential real estate, Worthy Bonds provide a solid and dependable foundation for your financial growth. Don't allow the unpredictable nature of the market dictate your financial future.

Break free from the worry and embrace consistent earnings. Join those who have already earned millions in interest with Worthy Bonds.

Start securing your financial future today and earn a fixed 7.0% APY! Visit WorthyBonds.com to start investing today!

*7% APY valid through 01/01/26

Macro Monkey Says

All Quiet on the Western Front

This week, the big macro-event was bank earnings. With the economy literally hanging in the balance on a day-to-day basis, depending on what Trump tweets, we can at least rely on big banks to give us some straight talk. 

While recession odds have crept into the ~50% range lately, earnings at Wall Street’s biggest banks tell a story of resilience. 

So far, the biggest names in finance —JP Morgan, Goldman, BofA, and Morgan Stanley—have reported amazing results. The secret? Trading revenue killed expectations because of a volatile market environment. 

And remember, these reports were calculated before “Liberation Day,” when markets went haywire. So, we can expect revenue to also continue this trajectory for the next quarter. 

On top of this, investment banking fees actually increased surprisingly, which should more than likely evaporate as companies continue delaying their IPOs and mergers. 

Digging in, JPMorgan saw its trading revenue jump 21% and equities profit hit a record, while Goldman Sachs reported its best-ever quarterly investment banking revenue, largely thanks to an increase in M&A activity and debt underwriting. 

Despite headwinds from the overall market, Bank of America also posted a strong quarter, with a 10% rise in trading revenue. While benefiting from a similar surge in investment banking fees, Morgan Stanley has also capitalized on its robust wealth management business, a sector that is growing fast.

But it’s not just the big-ticket trades and deals that are driving results. These banks have been diversifying their revenue streams and investing in digital banking and tech, which has helped them offset costs from rising operational expenses. 

The combination of solid performance in traditional banking operations and a booming investment banking and trading environment paints a picture of a highly resilient financial sector.

US Recession Odds Chart

While volatility is helping in the short-term, it’s a double-edged sword. The banks have echoed concerns about the potential for a slowdown. 

JP Morgan’s Jamie Dimon mentioned the possibility of a "mild recession," cautioning that persistent inflation and rising interest rates could hinder economic recovery, especially in a world already dealing with supply chain disruptions. 

Goldman Sachs’ DJ Sol shared similar sentiments, stressing that while the economy has shown resilience, headwinds are building. On the other hand, Bank of America's Brian Moynihan was more optimistic, stating that consumer spending remains strong, and the bank is seeing solid demand in its retail banking sector.

The Takeaway?

While these earnings suggest a strong foundation for the economy, they also reveal that financial markets remain volatile. As long as trading revenues stay robust, these banks are positioned to ride out any storm. 

However, if inflation persists and tariffs go through, then a recession is all but accounted for. Stay pessimistic and nimble.

Career Corner

Question

I have a question about networking and applying for positions on the website. Should I apply to a firm first and then connect with employees to set up calls, or should I reach out to employees at the firm, connect with them, and schedule a call before applying for a position? What would be the best strategy?

Answer

It depends on specific roles and timelines. Ideally, it is great to network before applying, but if the application is open, you need to submit. You don’t want to be left out of the process just because you were too late! Most of these applications are rolling, so if you wait too long to apply, you could miss it entirely.

Head Mentor, WSO Academy

What's Ripe

Forge Global Holdings (FRGE) 22.9% 

  • Forge is up on positive earnings. The company, which facilitates trading of shares in the private market, is seeing an improvement as it scales its platform to more customers. Forge's trading volume reached $262 million during the quarter, leading to revenue of $19 million, slightly surpassing expectations.

Netflix (NFLX) 4.8%

  • Netflix's stock rose after the company revealed plans to double its revenue by 2030, and it said it wanted to join Nvidia and Apple in the trillion-dollar market cap club. 

  • The ambitious goal follows a recent business review where executives outlined strategies for growth, including expanding content and reaching more international subscribers.

What's Rotten

Albertsons (ACI) 7.5%

  • Grocery chain Albertsons is going through changes. They have a new CEO, Susan Morris, who is set to start in May. 

  • On the earnings call, the current CEO passed the phone off to Susan, who then had to deliver the disappointing earnings forecast and talk about the failed Kroger deal with investors—tough first day on the job.

Dow Inc (DOW) 4.0%

  • Chemicals company Dow Inc. got sniped by a BofA equity analyst who downgraded the stock to “underperform” from “buy.” 

  • The analyst cited concerns over weaker earnings and potential risks to its dividend. The downgrade stems from a challenging macroeconomic environment, rising US feedstock costs, and trade barriers, leading to significant revisions in Dow's 2025-2026 earnings estimates. 

  • The company, facing a delayed recovery and pressure on key markets, is also at risk of a $2.6 billion free cash flow shortfall, potentially impacting its $2 billion annual dividend.

Thought Banana

Elliot’s Latest Activist Victim

Big moves are afoot in the tech world as Elliott Management, one of the most influential activist investment firms, has taken a major stake in Hewlett Packard Enterprise (HPE). 

Activist investors like Elliott use their substantial holdings in companies to push for changes that they believe will unlock more value, whether through restructuring, cost-cutting, or changes in leadership. In this case, Elliott is urging HPE to break up its operations further and focus more on its cloud business to keep pace with competitors in the rapidly evolving tech space.

For HPE, which has been focused on providing enterprise technology solutions, the move by Elliott signals a shift in strategic priorities. 

As an activist investor, Elliott is known for agitating companies to refocus on areas with the greatest potential for growth or return. Their goal is typically to unlock value for shareholders, often by pushing for changes that might not align with the company's current direction or culture. 

In HPE’s case, Elliott wants to see the company streamline its operations, enhance shareholder returns, and focus on more profitable and growth-oriented segments like cloud services and edge computing.

This is not the first time Elliott has been involved in pushing for changes at large corporations. Their approach usually involves taking a stake, gaining influence within the company, and advocating for significant changes in management, structure, or business strategy. 

The outcome? More often than not, companies are forced to adapt to stay competitive or risk losing support from key shareholders.

The Takeaway? 

Elliott’s involvement with HPE is a textbook example of what activist investors do—shake things up to force strategic changes. 

For HPE, it means facing pressure to adjust its business model and focus on high-growth sectors. This move could either propel HPE forward into a more lucrative future or lead to more disruption as they grapple with change. 

Keep an eye on how this unfolds, as it’s likely just the beginning of a deeper transformation for the company.

The Big Question: Can activist pressure from Elliott actually transform HPE into a cloud powerhouse—or just cause corporate whiplash?

Banana Brain Teaser

Previous

If a two-digit positive integer has its digits reversed, the resulting integer differs from the original by 27. By how much do the two digits differ?

Answer: 3

Today

In an electric circuit, two resistors with resistances x and y are connected in parallel. In this case, if r is the combined resistance of these two resistors, then the reciprocal of r is equal to the sum of the reciprocals of x and y. What is r in terms of x and y?

Send your guesses to [email protected]

❝

The best investments are often boring.

Joel Greenblatt

How Would You Rate Today's Peel?


Happy Investing,
Chris, Vyom, Ankit & Patrick