In this issue of the peel:

• 📉 Stocks are trading at massive discounts, and some brave investors are dipping their toes back in.

• 🪙 Your favorite billionaires are losing their wealth at a rapid pace.

• 🤵 Friday’s payrolls report looked solid. But remember, it’s backward-looking.

Market Snapshot

Banana Bits

• Trump, Zuckerberg, and Musk each lost over $20 billion amid the market meltdown.

• Eli Lilly's CEO speaks out against tariffs while other CEOs are trying to make the best of the situation.

• A new payroll report dropped, and it looks like US employers were feeling generous last month.

• Hear from the experts about what to do with your ailing stock portfolio.

• If you thought the last few days were bad for the market, just wait until earnings season starts.

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Macro Monkey Says

Stock For Sale

Since last week's tariff announcement, investors have been running around with their heads on fire. The idiom, “one man’s trash is another man’s treasure,” has never been more fitting for this moment in time. 

While short-term investors refuse to touch equities, others are seeing this as an opportunity to build generational wealth. Some people think the US could tip into a recession, depressing stock valuations for the foreseeable future. 

Those on the other side of the aisle see it as solid businesses that have gone on a massive sale. Think about it this way: If you see a shirt at the store you love, and it drops 20% in price, will you like it less, or would that make it even more attractive? 

Stock bulls are saying that if you still believe in the US in the long-run, this is simply an opportunity to buy great companies cheaply. Looking around the market right now, there seem to be some pretty nasty stock price drops for otherwise good businesses. 

Restoration Hardware, a furniture store for the wealthy, is down 63% YTD. The last time that stock saw such a massive decline? At the beginning of 2020, the COVID panic was at its highest. 

After bottoming out in April of that year, the stock proceeded to increase 700% over the next two years. A large part of that was driven by remote work mandates, leading to a surge in home buying and increased spending on furniture, especially among the wealthy.

Lululemon is another stock that is getting crushed, down 30% this year. That’s even more than the fashion retailer saw its stock decline at the peak of COVID-mania. 

There’s a lot of fear surrounding retailers that rely on Asia for their supply chain. However, the retailer released earnings, and the company's long-term financial viability is intact for now.

Datadog is a name you may not have heard of. They help businesses monitor and manage all their tech systems—servers, databases, applications, etc. 

If something breaks or slows down, Datadog will collect that data and alert the company so they can fix it quickly. They make money through a SaaS-based subscription model. The stock has taken a 40% hit this year and is almost back to where it was trading after its IPO. Imagine being able to get in at almost the ground level!

The Takeaway?

Simply put, while the declines are substantial, they’re not unprecedented. During the early days of 2020, the S&P and NASDAQ indexes saw steep drops, and it looked like the world was ending. But, after bottoming in April, stocks went on a generational-type run over the next two years. So, you never know what’s around the corner.  

What's Ripe

GameStop (GME) 11.3%

• ​While the market was blowing up around us, GameStop’s CEO, Ryan Cohen, was buying even more stock. That’s what was shown in a regulatory filing on Friday. He now owns over 37 million shares, earning him the trust of retail investors who are juicing the stock.

Rocket Companies (RKT) 11.2%

• Rocket is being aggressive with its expansion into the mortgage market. The likelihood of Fed rate cuts increases as the economy slips into recession. This would lead to a decrease in mortgage rates, spurring a lot of home refinancings and potential new purchases. Rocket is looking to position itself for the upcoming demand with two recent big acquisitions, Mr. Cooper and Redfin.

What's Rotten

AppLovin (APP) 16.3%

• AppLovin’s board tried to play hero to TikTok, submitting a proposal to purchase the app before it gets banned. Investors weren’t consulted beforehand because they did not feel this idea at all. They would rather the company focus on making its own product better rather than fooling around with TikTok.

S&P, NASDAQ 6.0%, 7.6%

• Honestly, what isn’t rotten at this point? The entire market plunged as investors took money out to sit on cash, waiting to see how Trump plays his hand next. Your portfolio might be on life support, but on the bright side, you may be able to get some solid companies at steep discounts.

Thought Banana

Bills, Bills, Bills

Friday’s Jobs/Payrolls report flew pretty under the radar amongst all the chaos. But, good news is that the US  economy is not in the toilet… yet. 

Employers demonstrated notable resilience in March, adding 228,000 jobs and surpassing analysts' expectations of 135,000. That’s the strongest monthly gain of the year so far. The unemployment rate looks good as well, at 4.2% versus 4.1% for February.

Sector Highlights

Job gains were widespread across various sectors:

• Healthcare: Continued its expansion with significant additions to the workforce.

• Transportation and Warehousing: Experienced notable employment increases, reflecting ongoing demand in logistics.

• Federal Government: Saw a decline of 4,000 positions, following a loss of 11,000 in February, amid ongoing debates over federal workforce reductions. 

Remember, this data is backward-looking. This means the March employment data was collected prior to the tariff announcements. 

The new policy has certainly added another layer of uncertainty and confusion, and it’s anybody’s guess what that jobs report looks like in the months ahead. Economists caution that potential supply chain disruptions and inflationary pressures resulting from tariffs could test the current labor market strength. 

The Takeaway?

The March employment figures provide a snapshot of an economy grappling with both growth and emerging risks. As trade tensions escalate, their influence on employment, inflation, and overall economic stability will be critical to monitor in the coming months.

The Big Question: Will the current job growth momentum survive the ripple effects of new tariffs and rising inflation?

Banana Brain Teaser

Previous

A border of uniform width is placed around a rectangular photograph that measures 8 inches by 10 inches. If the area of the border is 144 square inches, what is the width of the border, in inches?

Answer: 3

Today

November 16, 2001, was a Friday. If each of the years 2004, 2008, and 2012 had 366 days, and the remaining years from 2001 through 2014 had 365 days, what day of the week was November 16, 2014?

Send your guesses to [email protected]

How Would You Rate Today's Peel?

Happy Investing,
Chris, Vyom, Ankit & Patrick

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