To The Moon

Last Week's Recap

The US Market - Major indexes lost ground last week, while oil and yield hit 2024 highs

• Despite Friday's bounce, the three major indexes posted a losing week, as oil prices and treasury yield hit 2024 highs.

• The Dow slid 2.27% to below its 50-day line, posting its worst weekly performance in 2024. The Russell 2000 also logged its worst week since January as small-cap stocks struggled.

• Oil prices have rallied to five-month highs and registered a weekly gain as tensions boil in the Middle East with Israel closing embassies over threats from Iran. U.S. crude and Brent entered a “golden cross”, which is when the 50-day moving average outpaces the 200-day moving average.

• Treasury yields jumped. The 10-year Treasury yield closed at 4.378% on Friday and the benchmark briefly broke for the year on Wednesday.

• Gold prices scaled to another record high, propelled by the metal’s appeal as a safe haven asset. Spot gold added over 4% to close at $2349.1 per ounce.

• Friday's jobs report showed that job growth totaled 303,000 in March, blowing away Wall Street's 200,000 forecast. Wages rose 0.3% for the month, in line with estimates. The jobless rate unexpectedly fell to 3.8%.

• Federal Reserve Governor Michelle Bowman said Friday that she will remain cautious in my approach to considering future changes in policy stance, as the risks and uncertainties regarding my economic outlook. Moreover, Atlanta Fed President Raphael Bostic said he only sees one rate cut this year, occurring in the fourth quarter.

• Traders see a 62.5% probability of a cut at the June gathering, a significant decline from the 70.1% figure seen a week ago, according to the CME Fed WatchTool.

The US Sectors & Stocks - Oil and gold ETFs recorded big gains

• Three of the 11 S&P 500 sectors finished the week with gains. Those sectors are energy, communication services and basic materials, which have rallied more than 3.61%, 1.66% and 0.51%, respectively.

• On the other hand, real estate and health care have seen the biggest drops during the week, with each slipping nearly 3%.

• Geographical issues and Treasury yield rallies push gold and energy prices moving up. As of April 5, the SPDR Gold ETF (GLD) was up 12.5% since 2024. The iShares Silver Trust (SLV) was up 14.92%, and the United States Oil Fund ETF (USO) had gained 23.63% during the period.

• Tesla (TSLA) delivered 386,810 EVs in the first quarter, far worse than the most bearish estimates. Tesla produced 433,371 vehicles, further swelling inventories. Analysts continued to cut earnings estimates. Elon Musk said via X that “Reuters is lying (again)” after the news agency reported that Tesla canceled plans to build its most inexpensive car, the Model 2. Then, Elon Musk said that the Tesla Robotaxi will be unveiled on August 8.

• Meta (META) and Netflix (NFLX) both reached new record highs in the trading week. Meta (META) rose 8.6% during the week and the stock has risen 49% this year. Netflix (NFLX) was up 4.75% last week and 30.66% this year.

• Johnson & Johnson (JNJ) will acquire Shockwave Medical (SWAV) for $13.1 billion, or $335 a share, in cash. Shockwave is a leader in intravascular lithotripsy, a way to crack hardened calcium in blood vessel walls.

• Intel (INTC) disclosed a $7 billion operating loss in 2023 for its chip foundry business on sales of $18.9 billion. The Dow giant expects foundry losses to peak in 2024 and not break even until 2027, later than expected. Intel stock fell.

Hong Kong Market - Analysts upbeat on Xiaomi’s growth prospects

• The Hang Seng Index remained 1.1% higher in trading-shortened week, despite the benchmark retreated as traders temper US rate-cut bets.

• Xiaomi (HK:1810) has been in the news since it successfully marked its entry into the EV market, sparking excitement among analysts. Analysts upbeat on Xiaomi’s growth prospects.

• BYD (HK:1211) sold 302,459 vehicles in March, up from February and January sales, thanks to a wave of big price cuts. In Q1, BYD sold 612,315 vehicles, up 8% vs. a year earlier, with passenger BEVs up 9% to 291,730. Li Auto (HK:2015) delivered 28,984 EVs in March and 80,400 for Q1, slightly topping sharply lowered guidance. Nio (HK:9866) delivered 11,886 vehicles in March for a total of 30,053 in Q1, slightly beating lowered targets. XPeng (HK:9868) delivered 9,026 EVs in March and 21,821 for Q1, in line with views.

Singapore Market - Singapore widens Crypto rules to cover custody

• The Singapore stock market snapped its gains for four weeks, with the STI falling slightly by 0.2% last week. OCBC rose almost 2%, SingTel fell over 5%, Seatrium rose over 6%, and NIO fell over 6% this week.

• UOB is introducing lower interest rates for its One savings account members ahead of anticipated rate cuts by the US Federal Reserve. The reduced interest rates will come into effect on May 1.

• Singapore home prices rose for a third consecutive quarter, despite sales slowdown.

• Singapore expanded the scope of its digital-asset rules to cover the custody of tokens as well as more firms involved in fund transfers. Officials had already signaled plans to bring custody and more crypto-adjacent transfer services into the regulatory net.

Australian Market - The ASX 200 fell 1.6% for the week

• The ASX 200 fell 1.6% for the week, recording falls on three of the four trading days after Easter, as markets digested the news that US interest rates may not fall at all this year.

• The crude oil futures topped $US91 a barrel to reach their highest level in five months. That sent shares in local oil stocks up with Santos (ASX: STO) and Woodside (ASX: WDS) shares up.

• Gold and copper prices rose as investors bet economic growth rates will support demand as central banks move to cut interest rates later this year.

The Week Ahead

Macro Factors - CPI and Banks earnings

• March inflation data and the start of first-quarter earnings season will make for a busy week for investors. Economists and Federal Reserve watchers will also get a look at minutes from the central bank’s last policy meeting.

• On Wednesday, the Bureau of Labor Statistics' consumer price index for March is expected to be up by 3.4% from a year earlier. Consensus calls for a 3.7% year-over-year increase in the core CPI, which excludes food and energy components.

• The Federal Open Market Committee will publish minutes from its mid-March meeting on Wednesday afternoon. Then, the BLS will publish the March producer price index on Thursday.

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Earnings

• A new earnings season kicks off this week. Delta is set to report earnings on Wednesday before the bell, an appetizer for investors before a slew of the nation's largest financial institutions, including JPMorgan, officially usher in the first quarter reporting season on Friday.

• Broadly, Wall Street expects the first quarter to set the tone for a robust year of earnings growth among S&P 500 companies. According to Factset, consensus expects first quarter growth for S&P 500 companies of 3.2% compared to the year prior. For the full year, Wall Street sees S&P 500 earnings growing 10.9%.