Market Snapshot

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📉 Banana Bits

• Wall Street slips as fading U.S.-Iran peace hopes lift oil and weigh on megacap tech.

• Oil hits a one-week high as Middle East and Russian supply disruptions overshadow Hormuz talks.

• Nvidia taps Wall Street giants to raise more than $500B for AI infrastructure.

• Stocks hover near record highs as investors await CPI, with oil and Treasury yields elevated.

Market News

Markets Slip Ahead of CPI

U.S. stocks finished modestly lower Tuesday as investors turned cautious ahead of Wednesday’s inflation report. The S&P 500 fell 0.32%, the Nasdaq Composite dropped 0.60%, and the Dow slipped 0.34%, though all three remained near recent highs. One of the biggest stories of the day was the jump in oil prices, as ongoing uncertainty in the Middle East continued to raise concerns about global energy supplies. Higher oil prices could make it harder for inflation to continue cooling, which is why investors are paying close attention to today’s Consumer Price Index (CPI) report. Overall, the market spent the day waiting for new economic data rather than making any major moves.

Earnings season also remained in focus, with many companies continuing to report results that have generally exceeded expectations. Investors are becoming more selective, however, rewarding companies with strong profits while punishing those that raise concerns about future spending or slower growth. Markets are also watching how companies are funding their investments in artificial intelligence, as businesses continue spending heavily on new technology. With CPI due later today and earnings season still underway, investors expect markets to remain sensitive to any new developments.

Peel Take: Tuesday’s market felt more like a pause than a sell-off. Investors have been encouraged by strong earnings, but they're waiting to see if inflation continues moving lower before pushing stocks to new highs. Oil prices are the biggest wildcard right now because higher energy costs could slow progress on inflation and affect the Federal Reserve's next decision on interest rates. For now, earnings remain supportive, but today’s CPI report will likely have a bigger impact on where the market goes next.

What's Ripe

KKR & Co. (KKR) 6.88% 

• Shares climbed after investors reacted positively to KKR's role in a new $500 billion AI infrastructure financing initiative alongside Nvidia and other partners.

• The deal reinforced optimism that private capital firms will play a major role in funding the next wave of AI data centers and computing infrastructure.

• Peel Take: AI isn't just creating winners in tech anymore. Companies that finance AI projects are starting to benefit too, and KKR is showing that the "picks and shovels" approach extends beyond chipmakers.

MercadoLibre (MELI) 6.34% 

• Shares jumped 6.34% after JPMorgan raised its price target to $2,150 from $1,900, bringing renewed attention to MercadoLibre's growth prospects following its recent earnings report.

• Investors remain confident that MercadoLibre can continue growing across Latin America despite a mixed global economic backdrop.

• Peel Take: MercadoLibre continues to prove it's more than an online retailer. Its combination of e-commerce and digital payments has made it one of the strongest long-term growth stories outside the U.S., and investors are still willing to pay for that growth.

What's Rotten

Alphabet (GOOGL) 3.84%

• Shares fell 3.84% as mega-cap technology stocks came under pressure amid rising oil prices, renewed inflation concerns, and caution ahead of the CPI report.

• Higher oil prices and concerns about interest rates also pressured growth stocks across the technology sector.

• Peel Take: There was no major Alphabet-specific catalyst behind Tuesday’s decline. This looked more like investors reducing risk before an important inflation report than a shift in the company's long-term outlook. With valuations elevated, mega-cap tech remains particularly sensitive to changes in inflation and interest-rate expectations.

Honeywell (HON) 5.27%

• Shares fell 5.27% after management commentary at an investor conference renewed concerns around Honeywell's growth outlook following its recent portfolio overhaul.

• The pullback came as higher oil prices and inflation concerns led investors to become more selective across cyclical sectors.

• Peel Take: Honeywell’s 5%+ drop looked more company-specific than the broader market move. With the major indexes down only about 0.3%-0.6%, investors appeared to be reacting to the company’s post-separation growth outlook as well as the cautious macro backdrop.

🧠 Technical Trip

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🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• Nasdaq Advances Always-On Markets Strategy with Definitive Agreement to Acquire LeveL Markets

• US private equity TPG to acquire Lotte’s rental-car unit for $920 mn in all-equity deal

• Apollo Sports Capital Invests $2.6 Billion in the New York Yankees

• Kyndryl to acquire Healthcare IT Leaders to expand healthcare IT services

Student Success Corner

Banana Brain Teaser

Previous

A company has 50 million shares outstanding at $40 per share. It uses $200 million of cash to repurchase shares at the current price. If net income stays unchanged, by approximately what percentage does EPS increase?

Answer: 11.1%

Today

A portfolio is worth $200,000. It falls 15% in one month. By what percentage must it rise from its new value to get back to $200,000?

How Would You Rate Today's Peel?

Happy Investing,
Chris, Elie, Mitchell, Fernanda, Nick, & Patrick

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