To The Moon

Last Week's Recap

The US Market - Market pulled back

• Major indexes closed the week with significant losses, giving back recent gains after a volatile Friday session. The S&P 500 dipped back into negative territory for the year, erasing a brief return to breakeven earlier in the week. All three major indexes fell more than 2% for the week, marking a reversal from one of the strongest four-week rallies in recent memory.

• President Donald Trump reignited trade tensions, issuing warnings to Apple and proposing potential tariff increases of up to 50% on European Union imports.

• Yields spiked midweek following a weak 20-year Treasury auction, days after Moody’s downgraded the U.S. from its final top-tier credit rating. However, the 10-year yield dropped to 4.50% on Friday amid the selloff triggered by tariff headlines.

• Investor sentiment remains fragile following one of the strongest four-week rallies in decades. Barclays noted Friday that while the 50% EU tariff comments may be a negotiating tactic, the posts highlight that tariff risks remain a key source of policy uncertainty moving forward.

The US Sectors & Stocks - Tech stocks slide as tariff tension

• All 11 sectors in the S&P 500 ended the week in the red, with the exception of the basic materials sector, which managed to eke out a modest gain. Real estate (-3.64%) and technology (-3.16%) were the worst-performing sectors, as rising bond yields and renewed tariff concerns put pressure on interest-rate sensitive and growth-oriented stocks.

• Apple (AAPL) fell 3% on Friday after President Donald Trump posted on Truth Social, declaring that a 25% tariff “must be paid by Apple” on iPhones sold but not manufactured in the United States. This marked the first direct action against a specific company in Trump's 2025 tariff agenda. Apple shares declined more than 7.5% for the week, underperforming broader markets.

• Alphabet (GOOGL) made headlines during its annual Google I/O developer conference, unveiling a suite of new AI tools powered by the Gemini 2.5 model family. Key announcements included an “AI Mode” search experience now available in the U.S., and a new premium AI subscription service priced at $249.99 per month, aimed at enterprise customers. Despite the weak tech sector, Alphabet shares held up better than the broader market.

• U.S. Steel (X) surged 21% on Friday, after Trump announced support for its merger with Japan’s Nippon Steel, removing a major political hurdle for the deal and boosting investor confidence in its approval path.

• Tesla (TSLA) saw increased attention after CEO Elon Musk confirmed his intention to stay at the helm of Tesla through 2030, contingent on retaining “sufficient voting control.” He also revealed that Tesla will launch a pilot program of 10 autonomous Model Ys in a geofenced area of Austin, Texas, initially monitored by human teleoperators.

• Snowflake (SNOW) jumped nearly 10% after reporting first-quarter earnings per share up 71%, topping analyst expectations. Revenue grew 26%, surpassing $1 billion for the first time in a single quarter. The company also guided for Q2 product revenue slightly above Wall Street estimates, signaling continued momentum.

• Intuit (INTU) rose 8% on Friday, after raising its full-year revenue guidance following a strong fiscal Q3. The company now expects FY2025 revenue between $18.72 billion and $18.76 billion, representing a 15% year-over-year increase.

• GE Vernova (GEV) received a positive outlook upgrade from S&P Global Ratings, reflecting rapidly improving profitability. The ratings agency cited strong projected demand for power infrastructure, particularly to support expanding data center operations, as a key driver for the company’s growth prospects.

Hong Kong Market - HSI ended higher for sixth straight week

• The Hang Seng Index (HSI) closed the week up 1.1%, marking its sixth consecutive weekly gain, despite losing momentum toward the end of the week. Gains were driven by a mixed performance across the technology and healthcare sectors, with strength in consumer and export-oriented names offsetting weakness elsewhere.

• Pop Mart (9992.HK) surged over 12% during the week, reaching a record high. The rally was fueled by robust demand for its newly launched product lines and continued success in international markets, particularly in Southeast Asia and Japan. The company’s rapid global expansion continues to boost investor confidence.

• BYD Co. (1211.HK) also notched a record high, buoyed by strong export growth and better-than-expected performance metrics. The company’s aggressive international push, especially in Europe and Latin America, has bolstered sentiment. Citigroup raised its target price, citing BYD’s competitive edge in EV technology and expanding global footprint.

• Hengrui Medicine (1801.HK) made an impressive Hong Kong debut, with shares jumping more than 29% on its first trading day. The strong performance reflects investor enthusiasm around its pipeline and growth prospects as it seeks to expand beyond China’s domestic pharmaceutical market.

• Bilibili (9626.HK) reported first-quarter earnings that beat expectations, with revenue growing 24% year-over-year and a notable reduction in net loss. The results sent shares up 4%, as investors responded positively to the company’s improved operational efficiency and monetization efforts across its platform.

Singapore Market - STI closed 0.4% lower

• The Straits Times Index (STI) experienced a slight decline of 0.4% over the week, reflecting a mixed market influences, including economic concerns and company-specific developments.

• Singapore’s core inflation came in higher than expected in April, driven by higher food and services prices, while headline inflation stood pat. April’s core inflation, which excludes accommodation and private transport, rose to 0.7%. This was marginally higher than March’s 0.5%. Headline inflation was unchanged at 0.9%.

• Singtel (Z74) reported a return to profit with S$2.8 billion in H2, leading to a 1.8% stock price increase. The company's strategic divestments and improved core operating profit contributed to this positive outcome.

Australian Market - ASX sees modest gains amid market fluctuations

• The Australian stock market ended the week with modest gains, as the S&P/ASX 200 Index rose 0.2%, reflecting investor resilience despite choppy trading sessions and mixed global economic signals.

• Market sentiment was supported by renewed expectations that the Reserve Bank of Australia (RBA) may adopt a more aggressive interest rate cut strategy in the coming months. This growing optimism was fueled by softening economic data and hopes that April’s Consumer Price Index (CPI)—set to be released next week—will show a further decline in annual inflation to around 2.3%.

The Week Ahead

Macro Factors - Nvidia Earnings, PCE Inflation, and Trade Tensions in Focus

• U.S. Market Will Be Closed for Memorial Day on Monday, May 26, 2025.

• In the week ahead, market attention will remain on developments in the U.S.-China trade tensions and President Trump's pending tax bill. Meanwhile, Nvidia's (NVDA) quarterly earnings, due after Wednesday’s market close, are expected to be the highlight of the week.

• On the economic front, the spotlight will be on the Federal Reserve’s preferred inflation gauge, the April PCE report, scheduled for release on Friday. Economists project a 2.2% year-over-year increase in headline PCE, slightly below March’s 2.3%. Core PCE, which excludes food and energy, is expected to rise 2.5%, down from 2.6% previously.

• Other key data releases include the Conference Board’s Consumer Confidence Index on Tuesday, the FOMC meeting minutes on Wednesday, and an updated estimate of Q1 GDP growth from the BEA on Thursday.

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Earnings

• NVIDIA will report first-quarter fiscal-2026 results after the market close on Wednesday. Salesforce.com will also announce earnings on Wednesday, while Costco and Dell Technologies Inc. will report on Thursday.

• With 93% of the index done reporting, S&P 500 companies are on pace to have grown earnings by 12.9% compared to the prior year, far above the 7.1% expected on March 31, per FactSet senior earnings analyst John Butters.