Markets go bananas

🩍 Markets went absolutely apesh*t after the U.S. and China agreed to a 90-day pause and made progress on a new deal,

Author

Ankit Sinha
May 13, 2025

Silver banana goes to





In this issue of the peel:

  • 🩍 Markets went absolutely apesh*t after the U.S. and China agreed to a 90-day pause and made progress on a new deal.

  • đŸ§Ÿ Turns out tariff haters might be eating their words after the U.S. collected a record $16 billion in receipts in April and cut the budget deficit.

  • 😼‍💹 After a turbulent ride this year, the S&P is now basically flat YTD. 

Market Snapshot

Banana Bits

The Daily Poll

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What's your read on the Fed's pause?

Smart Move: 60.2% // Too cautious: 14.5% // Cut already!: 16.9% // We're doomed: 8.4%

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Macro Monkey Says

Tariffs are Uncle Sam’s New Bank Account

Well, well, well—look who’s suddenly flush with cash. Uncle Sam just had his best month at customs, collecting a record-setting $16.3 billion in tariffs this April, according to the U.S. Treasury. 

That’s 86% above the $8.7 billion collected in March and double the $7.1 billion collected last year at this time. The federal government is stacking tariff dollars like it's running a side hustle on eBay.

As a reminder, while pretty much all of the most aggressive reciprocal tariffs have been put on pause for 90 days and are likely to get reworked through individual deals with various countries, a 10% blanket tariff has been in effect since April. Meanwhile, the U.S. typically runs a budget surplus in April, due to the collection of taxes. But last month’s surplus of $258.4 billion was 23% higher than usual. 

Now for the other side of the coin. 

While the deficit was cut by a lot on a notional basis, the U.S. is still running a $1.05 trillion budget deficit, which is actually 13% higher than last year. 

So, on the one hand, it’s a drop in the bucket, but on the optimistic side, it’s a great start! Much of the deficit is driven by mandatory spending programs like Social Security, Medicare, and the occasional trillion-dollar vibes project (we’re looking at you, interest payments). U.S. borrowing has ballooned so high that the interest payments are in trillions. 

Imagine opening up every credit card you could get your hands on and then maxing them out. That’s basically the situation we’re in. Except instead of your $10k in Chase Sapphire debt, the U.S. owes $579 billion on its $36 trillion debt. Just a small difference :) 

The Takeaway?

While the U.S. government’s tariff strategy proved polarizing, the results are in, and the proof is in the pudding. 

Tariff receipts show that even controversial trade tools can have immediate fiscal benefits. While it won’t fix the deficit alone, this unexpected windfall gave Washington a rare moment of financial sunshine. Whether it lasts is another question—but for now, the budget got a glow-up, and Uncle Sam’s wallet is feeling a little thicker.

Career Corner

Question

I have been talking with some upperclassmen at my school, BC, and a lot of them have told me that for the banks that target us, we should always be emailing with our school email.

Is there any way I could get the right inbox for my school email and just separate everything into another folder? If not, is there any validity to what they're saying? Their rationale, from interns, is that the banks auto-sort emails from certain domains.

Answer

Unless the school email is run through Gmail, I don't think Right Inbox will work.

For alums, if upperclassmen are telling you that, I'd listen to them and use your Gmail and right inbox for the non-alums.

Head Mentor, WSO Academy

What's Ripe

Mega-Cap Tech (AAPL, NVDA, MSFT, AMZN, GOOGL)

  • The laws of gravity apply to the stock market as well. Every reaction has an equal and opposite reaction. Just when we thought that big tech was in the dumps, investors purchased $800 billion worth in one day after China and the U.S. made significant progress on new trade deals.

Biotech Stocks (BBH) 4.5%

  • Biotech stocks have had a rough go of it lately for several reasons. High interest rates are increasing funding costs, regulatory uncertainty from policy shifts, and reduced funding for research agencies like the NIH, while layoffs at the FDA have pushed back timelines for drug approval processes. But yesterday, biotech stocks bounced following Trump’s new “most favored nation” drug pricing policy.

What's Rotten

Southwest Holdings (SWX) 7.7%

  • Southwest reported Q1 earnings that exceeded analyst expectations, with EPS  of $1.65 compared to the anticipated $1.42. However, the company fell short on revenue, posting $1.3 billion versus the forecasted $1.53 billion. They tried to stop investors from hitting the panic button by reaffirming net income guidance for the year, but to no avail.

Gold Stocks (GLD) 2.8%

  • Safety flew out the window yesterday after the market rallied. Anything gold-related, which includes the precious metal itself but also miners and other related companies, was sold off as investors looked for any extra cash they could throw into equities.

Thought Banana

Markets Back In Ape Mode

Hey apes, it looks like we’re officially back. Markets just had one of those insane one-day rallies nostalgic of the post-COVID days.

Markets went bananas yesterday after the U.S. and China shocked everyone by announcing a 90-day truce in their ongoing trade war, agreeing to slash tariffs on each other’s goods. 

The NASDAQ was up 4.3%, the S&P was up 3.2%, and the old boomer index (the Dow) was up 2.8%. After a sea of red for most of April with many traders on the edge, it felt nice to get some confidence injected back into the market. 

Of course, the trade deal with Europe was a big win as well as a ceasefire between India and Pakistan, but the primary driver of bullish sentiment came from talks between the U.S. and China.

Under the temporary agreement, the U.S. will reduce tariffs on Chinese imports from 145% to a more manageable 30%, while China, in return, is trimming tariffs on U.S. goods from 125% to just 10%. Suddenly, the cost of imported sneakers, semiconductors, and soybeans got a lot less outrageous. Somewhere, a soybean farmer just high-fived their accountant. 

The deal was hammered out during a surprise negotiation session in Geneva, where, according to one unnamed diplomat, “the vibe was shockingly non-combative.” It’s unclear what motivated this sudden burst of diplomacy—maybe the threat of a global recession, or maybe both sides just finally ran out of things to tariff.

Investors didn’t need a reason to click “buy”. Tech stocks led the charge, with chipmakers like Nvidia and AMD practically levitating. Mega-cap tech added $800 billion in market value in one day. Even beaten-down sectors like biotech and retail joined the rally. 

The pragmatist in me wants to hold off on popping the champagne just yet. This 90-day agreement is more like a timeout than a peace treaty. The real issues—intellectual property, forced tech transfers, and geopolitical tension—are still hanging over our heads. But after opening up my brokerage account today, I’m going to say “eff it” and celebrate. 

The Takeaway?

The U.S. and China agreed to hit pause on their tariff war, and the market reacted like it did in the good ole days. Stocks ripped higher, investors breathed a little easier, and for one brief, shining moment, global trade looked slightly less chaotic. 

The Big Question: Can a temporary truce between the U.S. and China really reverse months of economic tension?

Banana Brain Teaser

Previous

In a set of 24 cards, each card is numbered with a different positive integer from 1 to 24. One card will be drawn at random from the set. What is the probability that the card drawn will have either a number that is divisible by both 2 and 3 or a number that is divisible by 7?

Answer: 7/24

Today

The price of gasoline at a service station increased from $1.65 per gallon last week to $1.82 per gallon this week. Sally paid $26.40 for gasoline last week at the station. How much more will Sally pay this week at the station for the same amount of gasoline?

Send your guesses to [email protected]

❝

Wall Street sells stocks and bonds, but what it really peddles is hope.

Jason Zweig

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Chris, Vyom, Ankit, Mithun & Patrick