To The Moon

Last Week's Recap

The US Market - All major indexes fell for the second consecutive week

• The US stock market sold off as inflation data and Mideast fears dented investor sentiment, with the S&P 500 retreating 1.56% for the week.

• The Dow slid 2.37% as the major banks declined after earnings, JPM dropped more than 7% for the week.

• Safe haven gold is spiking, with consumers heading to their local Costco stores to snap up gold bars. Gold hit a fresh all-time high Friday.

• The CBOE Volatility Index rose to its highest level on Friday since October 2023. Iran launched an attack on Israel, escalating long-standing tensions between the two nations.

• That's still too fast for the Fed to start cutting rates, especially after a sizzling March jobs report. Treasury yields continued to rally, with the benchmark 10-year yield back to 4.5%.

• Markets are now pricing in two rate cuts starting in September, CME FedWatch Tool shows, instead of the three rate cuts starting in June investors held in their base case prior to the CPI report.

The US Sectors & Stocks - Banks declined after results

• All S&P 500 sectors declined last week, except the communication services. The communication services sector slightly gained, as GOOG and TSLA rose more than 3% during the week. Google parent Alphabet (GOOG) reached its all-time high on Friday, after it released its new generative AI use cases.

• Financial sector recorded the worst performance. JPMorgan Chase (JPM) declined more than 7%. Its net interest income could be a little short of analysts' expectations in 2024. CEO Jamie Dimon also warned about persistent inflationary pressures weighing on the economy. Wells Fargo (WFC) and Citigroup (C) also dropped despite their results being better-than-expected.

• Apple (AAPL) rallied over 4%, as it plans to catch-up in AI, preparing to launch new chips as part of a broader push to weave AI capabilities into all its products.

• Meta Platforms (META) also unveiled its next-generation AI chip. Meta, Google, Amazon and Microsoft (MSFT) have developed in-house AI chips to lessen their Nvidia dependence.

• Amazon (AMZN) also posted a record price in the trading week, as the company added AI visionary Andrew Ng to its board of directors. Amazon CEO said the company will get a boost from cloud-computing demand and the growth of AI.

• TSMC (TSM) topped expectations for first-quarter sales thanks to booming demand for AI-chips. TSMC said its March-quarter sales rose 16.5% year over year in local currency. Analysts had been looking for a 13.9% increase.

• Delta Air Lines (DAL) reported an comfortably beating results and its share rallied. The carrier reported its revenue rose 6% to $12.6 billion, as corporate travel demand accelerated with managed corporate sales increasing 14% year over year. Delta guided in-line for Q2 and the full year.

Hong Kong Market - HSI under pressure

• HSI dropped more than 2% on Friday, but still closed flat for the week, Hong Kong stocks pressured by weakness in the Chinese yuan and geopolitical tensions.

• China’s export growth fell more than expected in March, shrinking by 7.5% from a year ago, a reading which lagged the expected fall of 2.1% surveyed by Chinese financial data provider Wind.

• The onshore yuan was trading around 7.2366 to a US dollar, close to its weakest level since November. The depreciation came after the Japanese yen weakened to a 34-year low against the US currency.

Singapore Market - Singapore’s central bank left its monetary policy unchanged

• The benchmark Straits Times Index (STI) fell 0.3% to close at 3,216.91 for the shortened trading week. Singapore’s central bank left its monetary policy settings unchanged, inflation forecast to fall in fourth quarter.

• The monetary authority also said it expects inflation in the city-state to stay elevated in the immediate quarters ahead, before “stepping down more discernibly” in the fourth quarter of 2024 and into 2025.

• Gross domestic product grew 0.1% in the quarter ended March from the prior three months, that slower than the median 0.5% gain forecast. A spending boost from increased tourism spurred by Taylor Swift concerts failed to offset a decline in manufacturing output.

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

• A combination of stubbornly resurgent inflation in the United States, the potentially worsening war in the Middle East contributed to uncertainty and here in Australia dragged the market lower. The ASX 200 end the week up a skinny 0.3% to 7788.1 points.

The Week Ahead

Macro Factors - Retail sales and Fed officials speeches

• The March U.S. retail sales data set to release Monday is expected to show a deceleration from the prior month. Economists polled by FactSet anticipate a rise of 0.4% last month, down from a 0.6% increase in the previous reading. Excluding autos, retail sales are expected to rise 0.3%, according to Dow Jones.

• On Thursday, the Federal Reserve will release the Beige Book, which provides a summary of economic conditions, including inflation, employment, and economic outlook.

• Powell will deliver speeches on Wednesday, with their remarks on the economic outlook and policy paths becoming the focus of the market. Additionally, several other Fed officials will speak intensively.

• Investors broadly anticipate larger companies with robust balance sheets will weather the pricing pressure, but many worry that small-cap companies that may have more debt on their balance sheets could get hurt by elevated interest rates.

Earnings -NFLX、TSM and Banks

• First-quarter earnings season heading into high gear in the week. Investors are expecting this first-quarter earnings season will show which businesses are able to continue withstanding higher pricing pressures, as well as the upcoming refinancing cycle.

• Overall, analysts expect S&P 500 companies to have grown earnings by more than 3% from the year-earlier period, FactSet data shows. If that’s the case, it will mark the third straight quarter of earnings growth for the benchmark.

• Bank of America（BAC), Goldman Sachs (GS) and Morgan Stanley (MS) will likely take on greater significance for investors given JPMorgan’s disappointing net interest income guidance this week. Results from a succession of regional banks, which may have higher credit reserves and greater exposure to real estate, will also attract scrutiny.

• Netflix (NFLX) 、ASML (ASML) and TSMC (TSM) are also highlight the week.