To The Moon

Public Holidays The US will be celebrating Thanksgiving this coming week from 23 Nov 2023. Here is wishing my American friends a blessed Thanksgiving. No public holidays in Singapore, Hong Kong, and China. Economic Calendar (20 Nov 2023) Notable Highlights The US will be having a short week due to Thanksgiving. FOMC meeting minutes could be one of the movers of the market. Existing Home Sales. This will be one of the good indicators of the health of US real estate. This should shed more light on how the real estate is coping. Core Durable Goods Orders (MoM) (Oct) can shed some light on the consumerism in USA, an indicator of consumption in the USA. Initial Jobless Claims will be released in the coming week. This is another important data point for the Fed’s coming interest rate decision as they seek to balance inflation and unemployment. Together with the Unemployment rate, this will be part of the Fed’s consideration for the coming interest rate. decision. Crude Oil Inventories can be seen as forward indicators of market demand and consumption. If the trend of excess inventories continues, this implies demand erosion that can lead to reduced production & weakening consumer spending. Earnings Calendar (20 Nov 2023) For the coming week, there are a few stocks of interest especially, Zoom, Nvidia, Lowe’s and Baidu. Zoom was one of the Covid winners. How is Zoom doing now? Observations about Zoom: Revenue grew from $61M (2017) to $4,393M (2023). Operating profit looks weak when we compare $1,064M (2022) with $245M (2023). 2023 has yet to be closed and thus, there could still be other updates. EPS has grown from -$0.04 (2018) to $0.34 (2023). It is concerning that 2021 & 2022 have clocked much better EPS. The stock price fell 22.36% from a year ago. For the coming earnings, the forecast for the EPS and revenue are $1.08 and $1.12B respectively. Will Zoom be able to gain more ground? Market Outlook - 20 Nov 2023 S&P500 1D chart as of 18Nov2023 Technical observations of the S&P500 1D chart: The Stochastic indicator has completed a top crossover and should be starting a downtrend soon. The MACD indicator is on an uptrend. Moving Averages (MA). The MA50 line has started a downward trend and the MA200 line is on an uptrend. The last candle is above both the MA 50 line and the MA 200 line. We can note that the MA 50 line could be trending up soon. Thus, it could be read as bullish for the long-term and mid-term. As the 2 lines move closer, there is a chance of forming a death cross - typically, a bearish indicator. This could take weeks before this death cross is formed and changes are possible. Exponential Moving Averages (EMA). All 3 EMA lines are moving upwards and thus, implying an uptrend. From the 1D technical indicators above, there are a total of 20 (Buy), 0 (Sell) and 0 (Neutral). Investing recommends the “STRONG BUY” recommendation based on the technical indicators above (1D chart for S&P500). From the data above, the market should continue to rally into the coming week. News and my thoughts from the last week (20 Nov 2023) Prof St Onge > Soaring bankruptcies, crashing volumes, and mass lay-offs in shipping and freight -- one of the most reliable indicators of recession. Prices across the eight major shipping routes have plunged by half this year, going from $3,000 per container to just $1,400. One analyst predicts the entire industry will lose $15 billion this year. In short, shipping is saying a brutal recession is coming. And it's worldwide. Reuters > China's largest e-commerce player Alibaba Group said it recorded year-on-year growth over this year's Singles Day sales period, while rival http://JD.com reported sales volumes at a record high. There is a gap between statistics and feelings. To rely on data alone to decide and discount the sentiments may cause us to miss the bigger picture. This is what sets us apart as facts must be mixed with humanity for our perspectives, values and decisions. Rationality depends on one's values, personality and situation. We should not imply rationality based on the personality & values we know. When people are forced into a situation, they are capable of unexpected and irrational. Sometimes, the technical may not reflect the greed and fear in a timely manner. Step back to look at the market from a bigger time frame and things can get more clarity. Let's be prudent and do our due diligence. Apart from Tesla looking good, we should look into some of the companies that are showing weaknesses namely, Oracle, AbbVie, and Renault. Shouldn't there be concerns for Toyota, Volkswagen, Ford, GM, Hyundai & Nissan? News should be timely and accurate. If there is uncertainty, indicating that it is unverified is a workaround. But should we sacrifice accuracy to be timely, we are adding to the mess. It is a hard line to balance. Michael Burry disclosed in a federal filing with the SEC that it had closed out "put" positions on the SPDR S&P 500 ETF (SPY) and Invesco QQQ Trust (QQQ). Burry exits his shorts and buys $BABA and $JD. Michael Burry's Scion Asset Management bought bearish put options on a semiconductor ETF that counts Nvidia among its largest holdings. When we DCA into ETFs of Nasdaq, S&P500, and Dow Jones, this implies there will be monthly purchases regardless of the market directions. Is this tanking the market? By the way, about 40% of the revenue from S&P500 companies is from global (non-USA). Citigroup begins layoffs as part of CEO Jane Fraser’s corporate overhaul. Those impacted include chiefs of staff, managing directors and some lower level employees, said the people. WSJ > Consumers spent less at stores, dealerships and gas stations last month, a sign the summer spending boom is cooling heading into the holiday shopping season. U.S. retail sales fell 0.1% in October from a month earlier. Berkshire got rid of its investments in Procter & Gamble, UPS and Celanese Corp. At the same time, Berkshire also trimmed its holdings in Chevron, HP, Globe Life and Markel. Global auto sales growth will cool in 2024 due to a weak economy and the end of a post-COVID-19 demand surge, according to S&P Global Ratings. Worldwide year-over-year sales for light vehicles will only rise 1%-3% next year and 2%-4% in 2025. My investing muse Gasoline US Gasoline Price is on a downtrend. This should ease some of the inflationary pressures from high fuel prices. Gasoline price is one of the leading indicators of inflation. If fuel prices are heightened, inflation can remain stubborn. With the current trend, there are fewer inflationary pressures. Subprime delinquency Subprime Auto-Loan Delinquencies Hit Record, Prime Loans Are Pristine after Easy Money Ends: The High-Risk High-Profit Business of Subprime Auto Lending. The “Subprime” delinquency index (auto loan) has been on the rise. This is an area that we should monitor. This points to more potential defaults. One man’s debt is another’s asset and thus, the banks involved with the subprime are at higher risk. In fact, the delinquency rate now (60+ days) is already higher than that during the 2008 crisis. Federal Spending Federal Spending is part of the USA's GDP. If GDP growth is funded by debts, how can this be a good thing? When the global superpower needs to borrow from the rest of the world, isn't this a major concern especially for the global reserve currency? An unprecedented $8.2T of US government debt will be maturing in the next 12 months. The US is expected to incur another deficit of $1.5 trillion in the next 6 months. $1.5 trillion is slightly smaller than the 2022 GDP of South Korea (the 13th biggest economy in 2022). Conclusion Let us remain cautious about the market. There are mixed indicators of bulls and bears in the market. When unsure, it is best not to make any move. No trade can be a good trade too. @TigerStars $S&P 500(.SPX)$ $Zoom(ZM)$