To The Moon

Last Week's Recap

The US Market - The Nasdaq rallied over 4%

• The stock market registered a big rally last week, led by the Nasdaq, after a tough week. The S&P 500 and Nasdaq notched their best week since November as Big Tech names rallied on strong earnings.

• The S&P popped 2.7% to snap a three-week losing streak, while the Nasdaq gained 4.2% for its first positive week in five.

• Treasury yields jumped to a 2024 high as core inflation accelerated, but they came off highs. The 10-year Treasury yield closed as high as 4.67%.

• A raft of economic data this week confirmed that elevated inflation is being stubborn. March’s core personal consumption expenditures (Core CPI) rose 2.8% from a year ago and came in ahead of the 2.7% expected by Dow Jones. Personal spending rose 0.8%, ahead of a 0.7% estimate.

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The US Sectors & Stocks - Tech giants rallied on earnings

• The technology sector and the communication sector notched more than 5% increases last week. Chip stocks rallied as NVIDIA (NVDA) climbed 15%, Google (GOOGL) and Tesla (TSLA) jumped after earnings.

• Google-parent Alphabet (GOOGL) surged 11.5% on earnings. The tech giant announced its first-ever quarterly dividend, starting at $0.20 a share, and a $70 billion stock buyback. Q1 earnings beat on both the topline and bottom line.

• Meta Platforms (META) tumbled following its Q1 earnings report, as the company's guidance was lower-than-expected. Investors also fretted over capital expenditure on AI infrastructure. However, Meta Q1 earnings were better-than-expected, as EPS doubled on year-over-year, and revenue jumped 27% to $36.46 billion, the fifth straight quarter of accelerating growth.

• Tesla (TSLA) surged nearly 15% despite earnings being missed. The EV giant's EPS and revenue both missed consensus. But Tesla said "affordable" new models would come in late 2025, with Elon Musk saying production could happen before the end of 2024. Musk also touted self-driving and robotaxis, and also predicted Tesla deliveries would rise in 2024.

• Microsoft (MSFT) beat fiscal third-quarter views with a 20% EPS gain while revenue climbed 17%. Microsoft Cloud revenue jumped 23% to $35.1 billion, led by Azure infrastructure revenue, which rose 31% and top views.

• Nvidia (NVDA) and other chip stocks regained ground from the prior week's sell-off on reports of increased investments in AI data centers by tech giants. Elsewhere, Intel (INTC) stock fell nearly 7% on a mixed first-quarter report and weak Q2 outlook.

• GE Aerospace (GE) reported its first quarterly results Tuesday following the April 2 spinout of General Electric's power and energy business, now known as GE Vernova (GEV). Earnings for GE Aerospace soared 273%, easily beating. GE Aerospace benefits from strong aftermarket parts revenue, in part due to Boeing woes.

• Boeing (BA) reversed lower, hitting its lowest levels since late 2022. It reported a smaller-than-expected Q1 loss as revenue fell 8% to $16.57 billion, modestly beating. Outgoing CEO David Calhoun said 737 production will be "slow and lumpy" in Q2 as it works through challenges. CFO Brian West said Boeing is slowing near-term production of the 787 Dreamliner.

• General Motor (GM) reported a 19% EPS gain with sales climbing 8% and raised its full-year profit estimates. The stock price jumped over 8% last week. Ford reported Q1 revenue up 3% to $42.8 billion with EPS off 22%. Ford also raised its cash flow guidance. Ford stock price rallied for the week.

• ServiceNow (NOW) Q1 EPS solidly beat, while its revenue just edged past views. But the software giant forecast Q2 subscription revenue just below estimates.

Hong Kong Market - HSI surged 8.8%

• Hong Kong stocks surge to 5-month highs after the biggest weekly gain in over a decade as earnings outlook brightens.Hang Seng Index (HSI) vaulted 8.8% for the week, registering the best performer among the key stock gauges globally this month.

• A report from HSBC released on Thursday showed global funds investing in emerging markets have cut their underweight positions and turned neutral on China’s yuan-traded stock and Asian funds have significantly raised mainland China allocations to a seven-month high.The turnaround came after a guideline document by China’s State Council urged reforms to boost the appeal of the capital market and the mainland’s securities watchdog pledged more support through strengthening the links with the onshore market.

• CNOOC, China’s biggest offshore oil producer, jumped 3.6 per cent to HK$19.68 after registering a 24 per cent rise in first quarter earnings from a year ago, in the latest signs that corporate earnings are recovering.

Singapore Market - STI soared 3.26%

• The Singapore stock market soared 3.26% this week as persistent inflation continues to weigh on concerns of higher-for-longer rates.

• Singapore’s March headline and core inflation both eased further than economists expected. Headline inflation slowed to 2.7% yoy, lower than the 3.4% recorded in February, and below the 3.1% median forecast by private-sector economists polled by Bloomberg.

• Since PM Lee entered office in 2004, the Singapore dollar has risen about 40% against the currencies of the city-state’s major trading partners, more than twice the gain for the US dollar in the same context, Bloomberg-compiled data show. Total returns on Singapore government bonds have outpaced their global peers by around 16% in the same period.

Australian Market - The ASX lost 1.4%

• Stubbornly high Australian inflation pushed down Australian shares for the Aussie market as hopes of interest rate cuts this year evaporated like morning mist. The ASX 200 was down 1.4% to 7575.9 points last week.

• Mining heavyweight BHP (ASX: BHP) which were crunched down to $43.15 after it finally publicly revealed a $60 billion bid for London listed miner Anglo American. Late in the trading day Anglo American rejected the bid, labelling it “opportunistic” and claiming that it significantly undervalued the company, which includes significant copper assets.

• One of the big beneficiaries on gold bullish that was the gold giant Newmont Corporation (ASX: NEM) as its shares soared to $65.70 after a memorable quarterly profit that smashed expectations due to the rallying price of gold so far this year.

The Week Ahead

Macro Factors - Fed decision, April Jobs report

• This week, Fed decision, the April jobs report, and earnings from Big Tech stalwarts Apple and Amazon will test the recent optimism in markets.

• The latest decision on interest rate policy is expected on Wednesday, ET., followed by a media press conference with Fed Chair Jerome Powell. Markets widely expect the central bank will hold rates at 5.25% to 5.50%.

• Investors will be closely listening to how the Fed is interpreting recent hotter-than-expected inflation data given that the market has scaled back its rate cut expectations. Meanwhile, investors will parse Powell’s commentary following the meeting to see if he has turned more hawkish.

• The April Jobs report will be released on Friday. Consensus calls for a gain of 210,000 nonfarm payrolls in April, which would be lower than the 303,000 added in February. The unemployment rate is expected to remain at 3.8%.

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Earnings：Apple and Amazon on focus

• It will be the busiest week of the first-quarter earnings season, as more than 150 S&P 500 companies are scheduled to publish their results. Notably, mega-caps Amazon (AMZN) and Apple (AAPL) will release earnings on Tuesday and Thursday, respectively. Apple has underperformed this year, off by more than 11%.

• Moreover, AMD (AMD) and Coinbase (COIN) will take investors' attention this week, with their earnings also being released on Tuesday and Thursday, respectively.

• Elsewhere, Super Micro Computer (SMCI) , the artificial intelligence beneficiary that’s up 196% this year, is set to report results on Tuesday.

Apple Earnings Preview: Apple Likely to Beat Q2 But iPhone Sales Worry Still in Focus

Amazon Earnings Preview: AI, AWS and Advertising Revenues Will Be in Focus