To The Moon

Public Holidays

There are no public holidays in China, Singapore, America or Hong Kong.

Economic Calendar (21Jul25)

Economic Outlook (from Grok)

1. Monetary Policy:

   Powell’s speech on Tuesday will be pivotal. His tone could range from neutral to hawkish if inflation concerns persist, impacting market sentiment.

2. Housing Market:

   Existing Home Sales (4.0M forecast) and New Home Sales (650K forecast) suggest a mixed housing outlook. Stability in existing sales contrasts with a slight decline in new sales, indicating potential softening demand.

3. Labor Market:

   Initial Jobless Claims at 221K previously suggested a robust labor market. Any increase could raise concerns about economic slowdown, while stability might support confidence.

4. Manufacturing and Services:

   Both S&P Global PMIs (Manufacturing and Services at 52.9) indicate continued expansion, reflecting resilience in key sectors if the trend holds.

5. Energy and Consumer Demand:

   The prior crude oil drawdown (-3.859M) suggests tight supply, which could drive oil prices higher if it continues.

The most watched event should be Powell’s speech. With speculations of his firing and investigations, it would be interesting as President Trump applies pressure to bring down the interest rates.

Earnings Calendar (21Jul25)

I am interested in a few of the earnings like SAP, Tesla, Coca-Cola, GM, IBM, Dow Chemical and Intel.

Recent performance of Dow Inc

Let us look at Dow Inc, one of the leading chemical players.

The stock price fell 43.5% from a year ago. Technical Analysis is showing a “Strong Sell” rating. The Analysts’ sentiment remains ‘Neutral”. With a price target of $34.18, there is an implication of a 20.82% upside for its price. Should we take a risk with Dow?

Recent performance of Dow

• Dow has yet to reach the previous revenue peak of $56.9B in 2022 or the best operating profit of $7.887B in 2021 (14.3% operating margin %).

• Earnings per share (EPS) fell from the peak of $8.38 (2021) to the recent $1.57 (2024).

• The P/E ratio of 68.4 renders a “high” valuation of the business.

• Despite the challenges, Dow has maintained the dividends per share at $2.80 since 2020. It has not grown for 5 years. This is of concern for the company.

Other Key Metrics (from Grok)

• Gross Profit and Margin: Gross profit declined, with the gross margin dropping. The 6-year median gross margin is approximately 17-18%, reflecting profitability pressure.

• Competitive Advantage: The declining gross margin and ROIC highlight cost challenges, but Dow’s leadership in innovative materials (e.g., CIRCULARITY solutions) positions it for potential recovery in sustainable markets.

Overall Assessment

Over the period from 2019 to 2024, Dow Inc. has faced challenges, with declining revenue and EPS, driven by economic slowdowns and commodity price volatility. Operating profits dropped with falling margins, reflecting profitability pressures. Dow’s (weakening) competitive advantages include its global leadership in materials science, diversified portfolio, and focus on sustainability (e.g., recycled plastics), positioning it for potential growth in green markets. However, declining margins and earnings indicate a need for cost management and innovation to navigate cyclical challenges as of July 2025.

For Dow’s coming earnings, the forecast EPS and revenue are 0.161 and 10.24B, respectively.

Given the outlook and recent performance, I prefer to explore other chemical players this season.

Market Outlook of S&P500 (21Jul25)

Technical observations:

• MACD - another top crossover is completed over the coming days, and this implies a potential reversal is coming. Will this index continue to range?

• Exponential Moving Averages (EMA) lines are showing an uptrend.

• Both the 50 MA line and the 200 MA line are showing an uptrend. This speaks of a bullish outlook for both the short and long term. A golden cross is completed. This is typically a bullish signal when backed with strong volume.

• The CMF is positive at 0.31, indicating more buying pressure over the past 20 periods.

Using a daily interval, SPX has a “Strong Buy” recommendation. 21 indicators show a “Buy” rating and 1 shows a “Sell” rating.

Candlestick patterns

From the list above, the recent candlestick patterns are leaning bullish.

Combining the above information, we can expect a reversal to take place in the coming days.

News and my thoughts from the past week (21Jul25)

The US national debt is set to hit $51 TRILLION by 2032, if NOT SOONER. That would be DOUBLE the value seen in 2020. The federal debt is rising in a STRAIGHT line. The government continues to spend like a drunken sailor - X user Global Markets Investor.

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Will this end the Ukraine conflict?

US SET TO IMPOSE 93.5% TARIFF ON BATTERY MATERIAL FROM CHINA - X user Walter Bloomberg

The thing better than Bitcoin is Bitcoin without leverage.

There is an important discussion to be had, one whose answer may well be far from the simple conclusion many are inclined to rush towards: By refusing to resign a post that expires in May 2026, is Federal Reserve Chair Jerome Powell genuinely defending the central bank's independence or, conversely, exposing it to greater threats? - X user Mohamed A. El-Erian

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Inflation in America has reached about 25% since January 2020. Have we experienced a similar income increment?

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The 30-year Treasury yield is once again trading above the 5.0% mark. It is nearing its highest level since 2007. Rising government spending and potential tax cuts are fueling global volatility in long-term sovereign bond yields.

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US June CPI hits 2.7% YoY. Any more rate cuts?

20% of the lowest-income Americans' credit card debt was seriously delinquent in Q1 2025, the highest share in 14 YEARS. Nationwide, ~13% of credit card debt was past due 90+ days, the highest since 2011 - X user Global Markets Investor

Is the Japanese government bond market IMPLODING?! Japan's 30-year government bond yield is trading at 3.15%, just 5 basis points below its highest level since its debut in 1999. Japan's 40-year yield is at 3.52%, 18 basis points below its record. It is ALL about Japan. - X user Global Markets Investor

The share of Americans aged 40–49 with a payment past due jumped from 21.3% in Q1 2020 to 28.4% in Q1 2025. For 50–59, it rose from 21.4% to 25.9%, and for 60+, from 19.8% to 25.0%. A pullback in consumer spending is likely coming. - X user Global Markets Investor

Mom-and-pop investors' top holdings are NVIDIA, Apple, and Tesla of $472 billion, $284 billion, and $256 billion, respectively. Individual investors hold over $1 TRILLION in just 3 stocks. - X user Global Markets Investor

My Investing Muse (21Jul25)

Layoffs & Closure news

• Scale AI just fired the humans behind AI… because even they overestimated the hype. 200 employees gone. 500 global contractors cut. All after Meta poured in $14.3B last month. They all bet big on GenAI... and cut the team building it. That's one for the books. Are AI companies waking up to the cost of building on hype? - X user Amanda Goodall

• Indeed and Glassdoor, which are both owned by Japan’s Recruit Holdings Co., are cutting approximately 1,300 jobs as artificial intelligence takes a larger presence at the companies, per FORTUNE

• Daimler Truck is laying off 573 workers in North Carolina - blaming a “sustained reduction in orders” for medium-duty, on-highway, and electric trucks. Assemblers. Supervisors. Logistics staff. All temporarily out with no return date. We know logistics is slowing... but damn... when truck orders disappear, the economy isn’t fine. This is a leading indicator, and yes, you should expect to see more. - X user Amanda Goodall

The above are some news items about layoffs and closures. As tariff negotiations drag on, the collateral to businesses (especially smaller ones) can compound.

My final thoughts

We can live in the same country, but we face different challenges and realities. Some of us can be the top earners of a certain demographic. Some of us can struggle to make ends meet. It is thus possible for the S&P 500 index to hit a record high as America sees one of the highest recorded bankruptcies in recent months. Some companies can make record revenue, while some of the businesses around us no longer exist.

Piecing these together, we need to understand that the S&P 500 do not represent the American economy. This represents the top 500 businesses from America, with most of them enjoying a global presence.

We need to deep dive into different demographics and income bracket groups to have a better understanding of America. We are due for a market correction. Market correction does not need to follow a “10-year” historical cycle.

The market can remain irrational longer than we can be solvent.

While we invest for better future returns, let us consider hedging. This can involve a different currency, market, or asset class (bonds instead of stocks). I remain invested, though I have more concerns for some markets.

Let us review our expenditures, income, and savings. Let us spend within our means, invest with what we can afford to lose, and avoid leverage. I am reviewing my holdings and plan to cut losses with businesses losing their competitive advantages. I would also consider hedging and adding some defensive positions.

Let us conduct our due diligence before taking on any positions. Let us have a successful week ahead.

@TigerStars

$S&P 500(.SPX)$

$Dow Chemical(DOW)$

$Tesla Motors(TSLA)$