Saudis Drop $600B Bag

💰 The White House announced a $600 billion investment in the US from the Saudi government.

May 14, 2025

In this issue of the peel:

  • 🚀 We did it! The NASDAQ and S&P are up 1.6% and 0.7% respectively, wiping out massive losses from earlier in the year. Congrats to those who stuck around.

  • 😎 The CPI report came in a tad bit softer than economists expected for April, which gave the market a second reason to rocket.

  • 💰 The White House announced a $600 billion investment in the U.S. from the Saudi government.

Market Snapshot

Banana Bits

4 Reasons The Dollar Could Collapse

If you’ve noticed that your dollars don’t seem to go as far as they used to, you’re not alone. Millions of Americans are in the same boat.

The recent inflation rate, the highest in over 40 years, was a wake up call that made many people realize that the financial stability they had taken for granted for decades no longer exists.

The US government has been tempted to use its reserve currency status to its financial advantage. This has resulted in massive devaluation of the dollar.

A way to help protect your dollars is to diversify your money with assets that don’t depend upon the strength and health of the dollar for their value. Precious metals like gold and silver, for instance, are in demand around the world 24/7 and aren’t dependent upon the value of the dollar.

To find out reasons why experts are predicting the collapse of the dollar, request your free digital copy of the 4 Reasons the Dollar Could Crash eBook.

*Offer valid on qualified orders of Goldco premium products only. Receive up to 10% in free silver based on purchase amount; cannot be combined with other offers. Additional terms apply—see your customer agreement or contact your representative for details.

Macro Monkey Says

Prepare for the Worst, Expect the Best 

In the words of Michael Scott: Well, well, well.. How the turntables. In a crazy plot twist, the April Consumer Price Index (CPI) report revealed that inflation is slowly but surely getting under control. 

CPI rose 0.2% in April, putting the year-over-year rate at 2.3% versus the 2.4% forecasted. This is a big deal, as everyone freaked out about how tariffs would spike inflation earlier in the year. While the most aggressive tariffs have been paused and/or reworked through deals, a flat 10% tariff has been in effect. 

However, some would argue that it’s too early to see inflation reflected in the data because companies stockpiled goods and materials before tariffs went into effect. As a result, prices haven’t increased yet because those companies are still selling older inventory. Whether that’s true or not, the market didn’t care and pumped hard at the end of the day. 

What's Driving the Numbers?

  • Food Prices: Grocery store prices saw a slight decline of 0.1%, with notable drops in meat, milk, and most notably eggs, dropping 12% (although still up 49% on the year). However, dining out became pricier, offsetting some of these gains.

  • Shelter Costs: Housing expenses continued to climb, rising by 0.3% in April and contributing significantly to the overall inflation figure. Shelter has been extremely sticky, up 4% over the past year, and doesn’t seem to be letting up any time soon. Great, just in time for the summer analysts to move to the city.

  • Medical Care: Medical care services experienced a 0.5% increase, adding pressure to consumers' wallets.

  • Energy Prices: The energy index rose by 0.7%, driven by higher natural gas and electricity costs, despite a drop in gasoline prices.

There’s always an elephant in the room. And that elephant comes in the form of nerdy economists who don’t want to see us celebrating these market gains. Ok, to be fair, we should always hear both sides. 

While the current data shows a cooling trend, economists warn that the recent tariffs introduced by former President Trump may not have fully impacted prices yet. While the 145% tariff on Chinese imports and 25% tariffs on autos, steel, and aluminum were put on a temporary 90-day pause, the 10% baseline tariff could spark inflation, according to some economists. 

On the other hand, Federal Reserve Chair Jerome Powell might be running out of excuses not to cut rates. With inflation at 2.3%, strong employment data, and an otherwise strong economy, the market (and President Trump) is surely going to be looking for hints of a rate cut at the next meeting. The Fed’s “wait and see” mantra might not cut it anymore. 

The Takeaway?

April's CPI report offers a glimmer of hope for consumers, with inflation cooling more than expected. However, the looming impact of recent tariffs introduces uncertainty into the economic outlook. 

While food prices have seen some relief, rising shelter and medical care costs continue to strain household budgets. The Federal Reserve remains cautious, monitoring the situation closely before making any policy changes. As the effects of the tariffs become more apparent in the coming months, consumers and policymakers alike will need to stay vigilant.

Career Corner

Question

If net debt increases, the EV goes up and the EQV goes down. (Net debt = debt - cash). However, if debt increases, EV doesn’t change, and EQV doesn’t change. Is this correct?

Answer

For the second point, yes, as long as the new debt taken sits as cash on the BS, meaning the net debt remains the same.

To your first point, not such an easy statement. If your point is that you take on more debt and use that money to invest in the business, EV goes up, but equity value (from a book perspective) stays the same because you haven’t done anything to affect equity value (EV increases, but debt increases as well and no change in cash since you spent the funds, so equity value flat).

Head Mentor, WSO Academy

What's Ripe

Coinbase (COIN) 24.0% 

  • Out with the old, in with the new. Coinbase surged following the announcement that it’s getting included in the S&P 500, replacing Discovery Financial. This comes at a great time for the company, with a rebound in B*tcoin leading to stronger profits across the cr*pto industry.

Super Micro Computer (SMCI) 16.0%

  • Whenever you see SMCI’s stock getting the sh*t kicked out of it, scrounge up every dollar you can and buy. If history has shown us anything, it’s that a crazy 1-day surge is bound to happen with this stock. AI and chipmaker hype is boding well for this AI pure-play company.

What's Rotten

UnitedHealth (UNH) 17.8%

  • United is kind of in a tough spot as it looks to emerge from a challenging year. The company’s replacement CEO is stepping down unexpectedly, and they’re suspending guidance amid several large-scale problems, including rising medical costs and a cyberattack. 

  • Former CEO Stephen Hemsley has returned to lead the company, aiming to stabilize operations and restore investor confidence.

International Game Technology (IGT) 9.5%

  • Casinos are always a great economic indicator, and based on IGT’s latest earnings report, some people might be struggling a bit. The company is doubling down on its lottery business but reported a 12% drop in quarterly revenue, largely due to tough year-over-year comparisons after a strong 2024.

Thought Banana

The Art of the Deal 

In a significant move to bolster economic ties, Saudi Arabia has pledged a $600 billion investment in the United States over the next four years. The announcement came during President Donald Trump's visit to Riyadh, where he and Crown Prince Mohammed bin Salman unveiled a series of agreements spanning defense, technology, energy, and infrastructure sectors.

Key Highlights of the Investment

  • Defense and Aerospace: A substantial $142 billion arms deal was signed, focusing on enhancing Saudi Arabia's defense capabilities with advanced U.S. military equipment and technology. 

  • Technology and AI: Saudi-based DataVolt plans to invest $20 billion in U.S. AI data centers and infrastructure. Additionally, joint commitments totaling $80 billion involve major tech companies like Google, Oracle, Salesforce, AMD, and Uber, aiming to advance technological collaboration between the two nations.

  • Energy Sector: Saudi Aramco is set to sign memoranda of understanding with U.S. energy firms NextDecade and Sempra, focusing on liquefied natural gas projects, further strengthening energy ties.

  • Infrastructure Development: U.S. construction firms, including Hill International and AECOM, will participate in building key projects like King Salman International Airport and Qiddiya City, contributing to $2 billion in U.S. services exports.

  • Healthcare Investments: Shamekh IV Solutions announced a $5.8 billion investment to establish a high-capacity IV fluid facility in Michigan, aiming to enhance the U.S. healthcare supply chain.

The Takeaway?

This monumental investment underscores a strategic shift in U.S.-Middle East relations, emphasizing economic collaboration over traditional diplomatic approaches. The diverse range of sectors involved reflects a mutual commitment to innovation, security, and economic growth. 

As these initiatives unfold, they are poised to create significant opportunities for businesses and workers in both countries, marking a new chapter in bilateral cooperation.

The Big Question: Will this wave of foreign investment help rebuild America’s infrastructure and innovation edge—or deepen geopolitical dependencies?

Banana Brain Teaser

Previous

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?

Answer: $2.72

Today

If the circumference of a circle inscribed in a square is 25π, what is the perimeter of the square?

Send your guesses to [email protected]

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The desire to perform all the time is usually a barrier to performing over time.

Robert Olstein

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Chris, Vyom, Ankit, Mithun & Patrick