Silver banana goes to…

In this issue of the peel:

• 📈 Markets traded slightly up on a routine Fed decision day.

• 🤔 Powell unsurprisingly kept interest rates unchanged but warned of stagnation risks.

•  🇨🇳 China’s latest economic maneuver involves rolling out stimulus measures ahead of crucial talks with the U.S.

Market Snapshot

Banana Bits

• China is rolling up its sleeves and injecting stimulus measures ahead of the U.S. trade talks meeting.

• The Federal Reserve left interest rates unchanged as widely expected.

• Nvidia and other chip makers get a reprieve as Trump is set to end chip export restrictions.

• The Fed made its rate decision, and the outcome was pretty predictable, to be honest.

• Crowdstrike is cutting 5% of its workforce, totalling 500 employees.

• David Bailey, cr*pto advisor to the current administration, is launching a $300 million b*tcoin investment company.

The Daily Poll

Previous Poll:

U.S. signs a trade deal, but the partner is unnamed. Your guess?

China: 17.4% // India: 50.2% // UK: 18.3% // Other: 14.1%

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Macro Monkey Says

Fed Leaves Rates Alone—Again. Markets Yawn

In a move that shocked approximately no one—except maybe your friend who still thinks we’re “definitely getting a rate cut this meeting”—the Federal Reserve left interest rates unchanged yesterday. 

So, that means Jermoe Powell and his gang are the ones to blame for dashing your hopes of cheaper mortgages, juicier stock rallies, or slightly less judgment from your favorite barista when you order drip coffee.

The central bank kept the federal funds rate in the 4.25% to 4.50% range, marking the sixth straight meeting of, essentially, “Let’s just wait this out.” Powell did toss out a few polite nods to recent inflation readings and job market strength, but the vibe was very much: “We’re not there yet.”

One thing Powell made sure to do was avoid the topic of tariffs. While he didn’t address them directly, he acknowledged during the press conference that new tariffs could complicate the economic outlook. He said that tariffs could push prices up while also weighing on growth if they hurt trade and business confidence. 

That’s where stagflation comes in—a dreaded combo of stagnant growth and persistent inflation. Powell was clear: the Fed isn't predicting stagflation, but it's on their radar as a risk, especially if tariffs rise sharply and inflation proves sticky.

Markets initially held their breath, hoping Jerome would surprise us with even a whiff of a rate cut. But no dice. At the end of the day, U.S. stocks rose slightly, which is a positive sign. 

The Takeaway?

No rate cut this time. And probably not next time either. Jerome Powell wants to see a few more months of clean inflation data before pulling the trigger. 

So, if you’ve been waiting for mortgage rates to drop before buying a house—or for stocks to moon again—maybe keep waiting. Or just accept that we live in a world where “higher for longer” is the new “YOLO.”

Career Corner

Question

I saw this interview question online and wondered how you would answer the question, "Which valuation method is the best?"

Answer

Go through the pros and cons of each (briefly, or stick to the one most relevant) and then use that to explain why you think the pros of X make it the best in Y situation (or overall, depending on the exact interview prompt).

Head Mentor, WSO Academy

Check out WSO Academy!

What's Ripe

Oscar Health (OSCR) 30.2%

• Oscar Health delivered a strong Q1 performance, reporting EPS of $0.92, surpassing the $0.83 consensus estimate. Revenue hit $3.05 billion, a 42% year-over-year increase, driven by a 41% rise in membership to over 2 million. 

• The company's medical loss ratio (MLR) was 75.4%, slightly higher than the previous year's 74.2%, indicating a modest increase in medical expenses relative to premiums.

Elanco Animal Health (ELAN) 26.3%

• Elanco struck a chord following stronger-than-expected Q1 earnings. The company reported EPS of $0.34, surpassing analyst estimates of $0.26, and revenue of $1.21 billion, exceeding the forecasted $1.17 billion.

• Despite a 4% year-over-year revenue decline, attributed partly to an ERP system integration blackout in April 2023, Elanco's performance still beat expectations.

• The company highlighted a robust innovation pipeline, with products like Experior and Zenrelia contributing to projected innovation revenue between $640 million and $720 million for the year while decreasing their debt burden.

What's Rotten

Lifestance (LFST) 15.9%

• LifeStance Health Group reported strong Q1 results, beating expectations with revenue of $304.6 million (up 16% year-over-year) and adjusted EBITDA of $42.8 million. 

• The company added 200 clinicians during the quarter, bringing its total to over 6,100, which fueled both growth and improved margins. Management reaffirmed full-year guidance, projecting revenue between $1.26 and $1.31 billion. 

Alphabet (GOOGL) 7.2%

• Google stock dropped after a report revealed that Apple is in talks to integrate OpenAI's ChatGPT into the Safari browser on iPhones, potentially reducing reliance on Google's search engine. This move could significantly disrupt Google's dominance in mobile search, especially since Safari is the default browser on all Apple devices. 

• Analysts view this as a serious threat to Google’s $60 billion+ annual search business from Apple products. While talks are ongoing and no deal is final, investor concern over the long-term search market share caused Alphabet shares to fall.

Thought Banana

China Cutting the Fat  

China’s central bank has once again hit the economic expediency button, announcing plans to cut the reserve requirement ratio (RRR) for banks. That’s finance-speak for “let’s give the economy a quick little boost,” which means banks will have more cash to lend, hopefully waking up growth. 

Speaking at a financial forum in Shanghai, People’s Bank of China Governor Pan Gongsheng made it clear: more policy support is on the way. And not just any support — we're talking targeted, precise, and non-inflationary. Think acupuncture for the economy instead of a messy adrenaline shot.

Why the sudden need for stimulus? China’s post-COVID recovery has been more of a slow jog than a sprint, with consumer confidence dragging and the property sector still trying to remember what “boom times” felt like. 

Cutting the RRR frees up more lending for banks, which should trickle down into the broader economy. In practice, it’s a bit like loosening your belt after dinner and hoping you suddenly feel full.

This isn’t the first time China has reached into its monetary toolkit. In fact, they’ve been cutting the RRR pretty consistently for a while. But this time, Pan emphasized that while the central bank is ready to support growth, it won’t go crazy on inflation. The goal is stability after all. 

Meanwhile, markets responded with a modest golf clap. Investors were encouraged, but not exactly doing backflips. After all, they've heard “stimulus is coming” before — what they’re really waiting for is results. Like, real consumer spending, stronger GDP numbers, and maybe a real estate sector that isn’t perpetually on edge.

The Takeaway?

China’s central bank is cutting the RRR (again) to boost growth without stoking inflation. The move signals more supportive policies ahead, but markets are cautiously optimistic — kind of like someone eyeing a treadmill and saying, “Maybe tomorrow.” For now, it’s stimulus-lite with hopes for a heavier follow-up if needed.

The Big Question: Can China’s latest RRR cut actually wake up its sluggish recovery—or just hit snooze again?

Banana Brain Teaser

Previous

What is the smallest integer n for which 25^n > 5^12

Answer: 7

Today

In order to complete a reading assignment on time, Terry planned to read 90 pages per day. However, she read only 75 pages per day at first, leaving 690 pages to be read during the last 6 days before the assignment was to be completed. How many days in all did Terry have to complete the assignment on time?

Send your guesses to [email protected]

How Would You Rate Today's Peel?

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

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