To The Moon

Public Holidays

America, Singapore, China and Hong Kong do not have public holidays in the coming week.

Economic Calendar (24Jun24)

Notable Highlights

• The most important macro news in the coming week would be that of the core PCE price index. This is the preferred indicator used by the Federal Reserve for inflation. This will be one of the main references for the Fed’s coming interest rate decision.

• Chicago PMI will also be revealed in the coming week. This will bring some understanding to Chicago’s production outlook.

• The forecast for CB consumer confidence is at 100. Should this fall beneath 100, it implies a loss of consumer confidence.

• New home sales results will also be revealed with the market expecting 650,000.

• Durable goods orders are expected to grow at 0.3%.

• The other closely watched news is from the Fed’s monetary policy report, which will shed some light on the coming plans for interest rates.

• Initial jobless claims will also be key macro data that the Federal Reserve will look into as they ponder the next interest rate decision.

• Crude Oil Inventories can be seen as forward indicators of market demand and consumption. If the trend of excess inventories continues, demand erosion can lead to reduced production & weakening consumer spending.

Earnings Calendar (24Jun24)

In the coming week, these are the earnings of interest: FedEx, Carnival, Micron, Nike and Jefferies.

Let us look at the earnings of FedEx in detail.

FedEx price has been ranging recently with a 1-year target estimate of $308.67. The 52-week range is between 224.69 to 291.27. The share price has gained 9.18% from a year ago.

Observations:

• FedEx's revenue grew from $45.5 billion in 2014 to $90.1 billion in 2023

• The operating profit grew from $3.8 billion in 2014 to $5.3 billion in 2023

• FedEx’s EPS has almost doubled from $7.48 in 2014 to $15.48 in 2023.

• Dividend per share has grown from $0.60 in 2014 to $4.60 in 2023.

For the coming earnings call, FedEx has a forecast of $5.34 and $22.05 billion for the EPS and revenue respectively. The EPS has been trending down in recent quarters and the revenue is fluctuating around $22 billion.

Market Outlook of S&P500 - 24Jun24

Observations:

• The MACD indicator is on an uptrend. A double top is forming and we should expect a reversal in the coming days.

• Chaikin Money Flow (CMF) has crossed the zero line in the middle which implies an uptrend. Yet, there is a stronger buying momentum than a selling one. Let us monitor the development in the coming days. The CMF could have peaked recently.

• Moving Averages (MA). Both the MA50 line and the MA200 line are on an uptrend. The last candle is above both the MA 50 line and the MA 200 line. Thus, it could be read as bullish for the long term and the mid-term.

• Exponential Moving Averages (EMA). The 3 EMA lines are on an uptrend.

• I have replaced Stochastic with CMF to incorporate consideration of volume. Stochastic and MACD are similar with Stochastic being “more active” and more capable for “false” signals.

News and my thoughts from the last week (24Jun24)

From X user Jason Goepfert: Jensen Huang just sold another $31 million of $NVDA. That brings his total sales this week to over $90 million. It’s his largest cluster of sales in 19 years.

• Huawei Technologies expects HarmonyOS to break the dominance of Western mobile operating systems in mainland China after its next version ends support for Android apps. - SCMP

• Vincent Clerc believes shareholders and analysts will soon see the clear benefits of AP Moller-Maersk’s shift towards becoming a fully integrated logistics provider. - G Captain

• Between 2022 and 2026, global data centers' total electricity consumption will double, reaching more than 1,000 terawatt hours in 2026 - roughly equivalent to the entire annual consumption of Japan. - Nikkei via EIA

• Key transhipment ports around the world like Singapore are facing severe congestion due to the Red Sea crisis.

  The abrupt changes in carrier service patterns & vessel reroutings, has led to increased yard congestion & declining port productivity.

• It is a loss if we do not understand China.

  We can achieve peace through travel, food, music and respectful exchanges.

X user Craig Fuller: Tender rejections out of LA are blasting off. Just wait until container imports peak in Q3. Bullish.

• "The recent bitcoin price drop was also influenced by high selling volumes from miners," Matteo Greco, research analyst at crypto and financial technology investor Fineqia, said in an emailed note. - Forbes

• The spending in the USA is criminal as this puts future generations into financial meltdown. They inherit a debt spiral due to fiscal mismanagement.

  Kingdoms rise and fall. Are we looking at one?

• An acute container shortage in China is driving global freight charges high, prompted by ships taking the longer route around the Cape of Good Hope instead of the Suez Canal, where Yemeni fighters, Houthi, have disrupted marine transport. - The East African

• Ray Dalio has warned that the US & China will continue to “press up against the other’s red lines” as the US election nears, and smart money should prepare for heightened volatility by diversifying investments. - SCMP

• Massachusetts stands to lose almost $1 billion in annual revenue by 2030 as high taxes push wealthy residents to move elsewhere, per Bloomberg.

  More than 96,000 residents making a combined $19.2 billion in adjusted gross income are set to leave the state annually by 2030. - X user Unusual Whales

• Red Sea attacks impacted at least 65 countries and forced major energy & shipping company, African routes added around 11,000 nautical miles to each journey, increasing fuel costs by approximately $1 million for each voyage. - Economic Times

• The Tutor, a Greek-owned kamsarmax, has become the second constructive total loss from the seven-month campaign by the Houthis to disrupt merchant shipping in the Middle East. - Splash247

• "The Fed now admits some countries are moving to gold," former Coinbase CTO Balaji Srinivasan posted, pointing to what the Fed says is a "small group" that "represents 3 billion people. So 37.5% of the world is moving away from dollars towards gold." - Forbes

• Fitch Ratings increased its U.S. CMBS office delinquency forecast to 8.4% for 2024 and 11% for 2025. The office delinquency rate was 4.3% in April. The new peak predictions are up from the 8.1% for 2024 and 9.9% for 2025.  - Bisnow

• The Ukrainian government announced on Monday it had failed to reach an agreement with a group of foreign bondholders that includes financial giants BlackRock and Pimco on restructuring Ukraine's $20 billion in Eurobonds. - Malaysia Sun

• French electricity prices turned negative as a drop in demand and surging renewables output prompted some nuclear reactors to power down. - Fortune

• If America can print money when it needs, is there a need to borrow from other countries? Is there a need for the citizens to pay taxes? Why does America pay the interest for bonds issued when they can just keep printing?

• Supply chain strategies evolved to account for these new challenges as companies began moving their operations closer to home, adding security, and working to reduce supplies and shipping costs. - Yahoo Finance

• May 2024 US foreclosure report shows a total of 32,621 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — up 3% from a month ago but down 7% from a year ago. - Attom Data

• Vacancy rates in the U.S. and Canada remain around 20%. Roughly 80% of the US$ 15.2 billion of commercial mortgage-backed securities (CMBS) office loans expected to mature this year are at risk of failing to refinance and US$ 929 billion in maturities in 2024

• Real profits per enterprise have fallen to less than $200,000 per business, from $235,000 in 2019. Profit margins were well below the pre-Covid average. The annualised rate of 371 corporate insolvencies was the highest since 2013. - NZ Herald

• The private inland container depots (ICDs) in Chattogram are overwhelmed with export containers due to the advance dispatch of cargoes by the exporters ahead of Eid vacation in garment factories. - The Daily Star

• International Monetary Fund (IMF) has warned of a "striking" decline in the U.S. dollar's share of allocated foreign reserves of central banks and governments. - Forbes

• "Such a high concentration implies that if NVIDIA continues to rise, then things are fine," he wrote in a note on Wednesday. "But if it starts to decline, then the S&P 500 will be hit hard." - Yahoo Finance

• “We don’t believe that there’s going to be any loss of sovereignty for the U.S. dollar as far as the world’s reserve currency goes, for the next 10, 20 years..." - HSBC

• 43% of BNPL users who owe money were behind on payments, while 28% were delinquent on other debt. 48% of those using BNPL say they’ve started, or have considered, using it to pay bills or buy essential items, including gas and groceries. - The Harris Poll

  Buy Now Pay Later (BNPL) businesses would fall upon their blades. It is a good credit facility if the people can pay back. Debts look to break the backs of the government, corporations and consumers.

My Investing Muse (24Jun24)

Layoffs & Closure news

• Fisker officially files for Chapter 11 bankruptcy, lists estimated assets between $500 million - $1 billion, and estimated liabilities between $1 billion -$10 billion, per Reuters.

• Weeks after cutting 13% of its workforce, imaging company Satellogic announced it is laying off an additional 70 employees and slowing deployment of new satellites.

• Meta forms new Wearables group and lays off some employees. - The Verge

• Chegg's closure of the Israel office comes as part of the company’s restructuring plan, which will result in the departure of 441 employees, or 23% of Chegg's global workforce.

• Dermtech has filed for Chapter 11 bankruptcy protection and laid off 20% of its staff to support its push to find a buyer for its cancer test technology. - Yahoo Finance

• A wave of large bankruptcies is about to hit the US economy — and that could spark job losses for a growing number of Americans, according to Wall Street forecaster Danielle DiMartino Booth. - Yahoo Finance

• Retailers are closing nearly 3,200 stores this year, according to a recent analysis from CoreSight Research. The closures are a 24% increase from 2023. - NY Post

Layoff news continued into the week.

Some Technical Analysis

22Jun24 - Double top is forming for Bitcoin USD - typically a bearish signal. I prefer to monitor first. The bottom MACD crossover yet to be completed and at the same time, there is more selling volume based on CMF.

19Jun24 - for the S&P500 (1D chart), the uptrend continues. Technical indicators like MACD and CMF are showing an uptrend with a buying momentum. Are we noticing a double top forming? A stronger volume would be better. :)

Profitable businesses

Is this a bull trap or a bear pit?

There were 150 S&P 500 components that made gains in the past month, but they were outnumbered by 353 losers (totaling more than 500 stocks due to multiple share classes). 70% of S&P 500 components declined in the past month! - Dr Wealth

Costs comparison

Do we require USD$7.5 billion to build 7 charging stations? While the project is ongoing, the pace is underwhelming. In Europe, it costs up to €9,000 for an IRVE.

It is also reported that China’s cost to build high-speed rail is about 2% of America’s.

My final thoughts

The debt situation is worsening in the US. Let us continue to monitor the situation and consider hedging. While the run can continue, the weakening fundamentals and building debts are causing much uneasiness. Debts will need to be repaid eventually.

@TigerStars

$S&P 500(.SPX)$

$FedEx(FDX)$