Stocks Bounce Back

📈 After a short-lived bearish fake-out last week, stocks are back to their winning ways.

Author

Ankit Sinha
May 28, 2025

Silver banana goes to





In this issue of the peel:

  • 📈 After a short-lived bearish fake-out last week, stocks are back to their winning ways.

  • 🌎In a move that’s not so surprising anymore, Trump announced a delay on EU tariffs until July.

  • đŸ’Ș Consumer confidence data for May beat expectations on renewed optimism for trade deals.

Market Snapshot

Banana Bits

The Daily Poll

Consumer confidence bounced big in May. You feel:

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Previous Poll:

What would make the Steel deal a “win” for America?

Real job creation: 27.7% // Upgraded tech & plants: 18% // Union protections: 7.3% // All of the above: 47%

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Macro Monkey Says

Confident Consumers

After five months of doom, gloom, and economic forecasts that felt like they were getting more depressing by the month, American consumers have decided to cheer up a bit. 

The Conference Board’s Consumer Confidence Index hit 98.0 in May, up from 85.7 last month. All it took was a little trade truce and some tariff adjustments to lift the national mood. That wasn’t so hard, was it?

Consumer confidence measures how optimistic or pessimistic people feel about the economy, including things like jobs, income, and spending. When confidence is high, people are more likely to spend money, which helps the economy grow. When it’s low, they tend to save and cut back, which can slow things down. 

It’s not the most data-dependent approach, but more like a national vibe check on how everyone’s feeling about their financial future.

The 90-day tariff pause and willingness to work out a global trade deal have consumers and investors alike going from “we’re so done” to “we’re so back” in just a month. With import taxes dropping from 145% (yes, really) to a more breathable 30%, consumers suddenly remembered they like shopping, employment, and not paying triple for toasters.

The Expectations Index, which measures short-term outlooks, jumped 17.4 points to 72.8 but is still slightly below the 80 line that economists use as a marker to indicate we’re out of the woods for a near-term recession, but a notable bounce nonetheless. In short, Americans are still worried, but at least we’re worried with a little more optimism and bass in our voices.

What’s funny—and maybe a little touching—is that the feel-good vibes transcended demographics. Age, income, and political party didn’t matter. Apparently, nothing brings people together like not paying quadruple what they normally pay for a dozen eggs.

The Takeaway?

While no one is claiming complete victory yet, things are looking good. Inflation is still there, but slowly getting reined in. Only about a quarter of people are worried about losing their jobs. People are still budgeting and still side-eyeing grocery prices, but they’re also feeling a little more confident that the economic world isn’t on fire—at least not this week.

Career Corner

Question

Is it worth trying to network and have calls with IB professionals based in Hong Kong if I'm recruiting in the U.S.?

Answer

If you’re still learning about the industry, that's understandable, but beyond that, probably not, unless you’re open to locations or struggling to find someone to connect with in the U.S. For example, if the only person at Bank XX who attended your college is based in another country, by all means, reach out. However, if you have plenty of options in the U.S., then I would focus on them.

Head Mentor, WSO Academy

What's Ripe

Wayfair (W) 13.4%

  • Stocks got a boost from the delayed EU tariff announcement, and investors in Wayfair ATE good today. 

  • The company is getting an extra boost because investors are optimistic that the U.S. will rework several of its trade deals with various countries. This obviously helps retailers like Wayfair, which sells furniture largely manufactured outside of the U.S.

Tesla (TSLA) 6.9% 

  • Tesla has been on a winning streak lately after getting clapped a few months prior. Elon is back at the helm and away from the White House, which investors seemed to appreciate. 

  • The company also benefited from tariff delays for the EU, from which it receives a significant portion of its revenue. The news lowers the likelihood that Tesla gets caught in the crosshairs of the U.S. and EU’s fight.

What's Rotten

Fair Isaac Corporation (FICO) 11.3%

  • FICO, a credit score provider, has been taking it on the chin and eating losses lately. The stock is down almost 30% over the last five days since Federal Housing Finance Agency Director Bill Pulte raised concerns about the company’s pricing and encouraged consumers to utilize more “cost-effective” options. 

  • On the bright side, the company announced a new partnership with AWS. The stock might need to take a little more of a beating before investors factor that news into their models.

Trump Media & Technology Group (DJT) 10.4%

  • Trump Media & Technology Group is doubling down on cr*pto, planning to load up the balance sheet with over $2.5 billion in b*tcoin using money raised via a private funding round. 

  • The company said that the b*tcoin play is part of a broader strategy to integrate digital assets across its entire media empire, including Truth Social.

Thought Banana

We’re So Back!

Markets had a headfake bearish sentiment last week, but that proved to be extremely short-lived. If investors were smart, they would have used last week’s dip as a buying opportunity instead of panicking, as the market received a double dose of good news.

First, the U.S. and EU decided to shelve their latest round of economic punches temporarily. President Trump, fresh off a phone call with the European Commission President, announced that the planned tariffs on EU imports would be delayed until July 9. Nothing says “diplomacy” like an old-fashioned deadline extension. Hey, if it boosts markets, we love to see it.  

Investors took a collective “whew,” which quickly turned into collective manic giddiness. The NASDAQ and S&P rose 2.4% and 2.0% respectively, and the boomer Dow Index rose 1.7%. Even European markets joined the party with Germany’s DAX hitting record highs, and the FTSE 100 hitting a three-week peak. 

The delay gives both sides about six weeks to iron out their differences. The EU says it’s committed to "rapid" negotiations, which is code for “we really don’t want 50% tariffs on our wine and cheese.” For Trump, the move looks like a strategic pause, just long enough to say, “See? I’m being reasonable,” while still holding a pretty big stick.

What’s on the line? Billions in trade, supply chains across industries, and about a thousand different imported goods that regular consumers probably don’t realize they depend on until they’re much more expensive. The tariffs would’ve hit everything from luxury cars to household appliances. So yeah, people are watching this one closely.

Analysts are calling the delay a “positive step,” which is finance-speak for “we’ll take what we can get.” But they’re also quick to note this isn’t over. Negotiations are just beginning, and six weeks can feel like six years in wartime trade.

The Takeaway?

Markets love peace, even if it’s temporary. The U.S. and EU's delay in imposing tariffs gives everyone time to exhale. It also signals that world leaders are more likely to work together and negotiate a deal that satisfies all parties involved, rather than make a hasty decision. Until July 9 (the next deadline), the market goes to the moon!

The Big Question: Do you think the U.S. and EU will actually strike a fair deal before July 9?

Banana Brain Teaser

Previous

Each person who attended a company meeting was either a stockholder in the company, an employee of the company, or both. If 62% of those who attended the meeting were stockholders and 47% were employees, what percent were stockholders who were not employees?

Answer: 53%

Today

Exchange Rates in a particular year were $1 = 5.3 francs and $1 = 1.6 marks. An American dealer bought a table in Germany for 480 marks and sold the same table in France for 2,385 francs. What was the dealer’s gross profit on the two transactions in dollars?

Send your guesses to [email protected]

❝

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

Paul Samuelson

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