Nvidia Takes the Crown

📈 Markets were all green yesterday, thanks in part to Nvidia, which has regained its position as the most valuable company.

June 04, 2025

Silver banana goes to…



In this issue of the peel:

  • 📈 Markets were all green yesterday, thanks in part to Nvidia, which has regained its position as the most valuable company.

  • 💲Dollar General put the team on its back, leading stocks higher after a strong earnings report.

  • 🏦 Euro-area inflation cooled more than expected in May, paving the way for more rate cuts.

Market Snapshot

Banana Bits

Create a Pitchbook in the Time it Takes to Read One!

Introducing Pitch Creator, FactSet’s revolutionary AI-powered suite designed to revolutionize how investment banks approach pitchbook creation.

Say goodbye to tedious data collection and formatting tasks, and hello to automated pitchbook perfection. With features like natural language prompts for dynamic graph creation and automatic slide generation, you’ll save valuable hours every week and ensure your pitchbooks are ready faster, with greater accuracy.

Impress your manager by focusing on strategic initiatives, allowing you to win more deals and enhance your firm's success, as Pitch Creator empowers you to strike the perfect balance between human expertise and AI automation.

Macro Monkey Says

Eurozone Inflation Chills Out

Eurozone inflation dropped to 1.9% in May, well below the European Central Bank's (ECB) 2% target for the first time since September 2024. The decline from April's 2.2% was primarily driven by a significant decline in energy prices and a slowdown in services inflation to 3.2%, the lowest since March 2022. 

Core inflation, which, for God knows what reason, doesn’t include food and energy prices even though those are like the exact definition of “core,” slowed to 2.3%. It looks like Europe has won the race in bringing inflation down to a reasonable level. Probably because they were taking steps ahead of time while we were still arguing over the word “transitory.”  

Anyway, the new inflation data has some greedy investors rubbing their hands together, hoping for some good old-fashioned monetary easing. The base case is for another interest rate cut at its upcoming meeting. 

The ECB has already cut rates several times since June 2024, bringing the benchmark rate down to 2.25%. Analysts predict a further quarter-point cut to 2.0%, with some very bullish analysts expecting the rate to reach as low as 1.5% by Q3

While the easing inflation provides relief, the broader economic environment remains complex. U.S. President Donald Trump's recent tariffs on European goods have introduced new uncertainties, leading the European Union to lower its 2025 growth forecast from 1.3% to 0.9%. These trade tensions, coupled with a strong euro and subdued wage growth, contribute to the disinflationary environment. 

The Takeaway?

The dip in eurozone inflation below the ECB's target is a welcome development, signaling potential for continued monetary easing. However, when looking at it in the context of global trade tensions, particularly with the U.S., and other economic factors, it suggests that the path forward remains uncertain. 

Sure, lower inflation feels great at checkout, but for policymakers, it’s a tricky balancing act to keep the economy steady without tipping things over.

Career Corner

Question

I had a coffee chat with two people from the same firm at the same time today (met a person through a cold outreach, and he brought his buddy along for coffee). Is it okay to send one email to both, or should I send two separate emails thanking them for their time?

They both chimed in on all my questions, so it seems redundant to send two separate emails, but I thought I would ask.

Answer

I think it's fine to send to both of them, although when following up with them in the future, I'd start new chains in order to try and deepen the relationship with one or both of them.

Head Mentor, WSO Academy

What's Ripe

Dollar General (DG) 15.9%

  • Americans are tightening their budgets, opting for lower-cost retailers like Dollar General over Target. DG crushed earnings by luring in more middle- and upper-income earners. Even the rich are opting for discount options. So next time you’re scrolling your timeline and you see influencers popping champagne on private jets, remember: they probably bought that bottle at a dollar store.

Coinbase (COIN) 4.9%

  • Coinbase is back in the news. This time it’s positive, which is a nice change. The uptick in shares is being driven by a combination of heightened investor interest in cr*ptocurrencies amid concerns that the proposed "One Big Beautiful Bill" could exacerbate the U.S. fiscal deficit, potentially fueling inflation. This has led investors to look for “safer” assets like B*tcoin.

What's Rotten

Kenvue (KVUE) 6.2%

  • Kenvue stock dragged on the S&P in what was an otherwise good day for the index. CEO Thibaut Mongon pointed to weaker-than-usual seasonal demand for key products like Benadryl and Neutrogena. He mentioned that allergy season started late and Memorial Day sales were soft, both of which hurt performance. 

  • The company also flagged potential headwinds from tariffs and shifting consumer behavior. Investors didn’t love the update, and the stock took a hit as a result. It was the biggest decline in the S&P 500 for the day.

FactSet (FDS) 4.8%

  • If I were the CEO of a company and just announced my retirement, I’d want my stock to react just like FacSet: straight down. The company announced that CEO Phil Snow will retire in early September following a 30-year tenure, including a decade as CEO. Snow will remain as an advisor through the end of the year. 

  • He will be succeeded by Sanoke Viswanathan, a JPMorgan Chase executive who currently serves as CEO of International Consumer and Wealth. Sorry, Sanoke, I’m sure you’ll be great, but investors will be taking out their disappointment on you for the time being.

Thought Banana

Dollar General: The Best Kept Secret of the Rich 

Dollar General just delivered a blowout Q1 earnings report, exceeding all expectations. This is a strong signal that more Americans are embracing budget-friendly shopping, which we all knew already, but now have a solid data point to prove it. 

The discount retailer reported net sales of $10.4 billion, a 5.3% increase from the previous year, and same-store sales rose by 2.4%. EPS hit $1.78, a massive upside surprise from the $1.47 number that was anticipated. The results led to a nice full-year guidance upgrade by management. DG is now projecting EPS between $5.20 and $5.80, up from the prior range of $5.10 to $5.80. 

A notable trend is the influx of middle- and higher-income shoppers to Dollar General, marking the highest percentage of such customers in four years. CEO Todd Vasos attributed this shift to the company's value offerings and convenient delivery options, including partnerships with services like DoorDash. 

That sounds nice for a marketing slogan, but in reality, people’s cash flow is just drying out. This change in consumer behavior suggests that economic pressures are prompting even more affluent shoppers to seek cost-effective alternatives.

While customer traffic experienced a slight decline of 0.3%, the average transaction amount increased by 2.7%, indicating that shoppers are spending more per visit. This uptick may reflect consumers stocking up in anticipation of potential price increases due to tariff uncertainties. Despite these concerns, Dollar General remains confident in its ability to manage cost pressures and continues to expand its footprint, planning to open 575 new stores across the country in 2025.

In summary, Dollar General's strong performance highlights its appeal across a broad customer base, particularly during times of economic uncertainty. The company's ability to attract a diverse clientele and adapt to changing market conditions positions it well for continued growth.

The Takeaway?

Dollar General’s success says a lot about where the economy is right now. Even people with money to spare are becoming more cost-conscious, perhaps out of necessity, perhaps out of principle. Either way, when people making six figures start showing up at the same place buying toilet paper in bulk, it’s a sign that the “save more, spend smart” mindset is hitting across the board. 

Inflation, uncertainty, and shrinking purchasing power have turned the humble dollar store into a surprisingly accurate pulse check on the American consumer.

The Big Question: Can budget retailers like Dollar General keep thriving if inflation cools off, or is this their peak?

Banana Brain Teaser

Previous

Club X has more than 10 but fewer than 40 members. Sometimes the members sit at tables with 3 members at one table and 4 members at each of the other tables, and sometimes they sit at tables with 3 members at one table and 5 members at each of the other tables. If they sit at tables with 6 members at that one table, how many members will be at the table that has fewer than 6 members?

Answer: 5

Today

If mn ≠ 0 and 25% of n equals 75/2% of m, what is the value of 12n/m?

Send your guesses to [email protected]

❝

Real generosity toward the future lies in giving all to the present.

Albert Camus

How Would You Rate Today's Peel?


Happy Investing,
Chris, Vyom, Ankit, Mithun, Colin & Patrick