To The Moon

Key Market Highlights[Cool] 

US CPI continue to come in red hot in 8.3% yoy for April according to the Department of Labor, while falling slightly below the 8.5% print in March, prices continue to stay stickily high. Producer price index also continue to show high 11% yoy growth above market estimates. A surge in energy prices brought about by the ongoing war between Russia and Ukraine and rising food prices contributed most to the high prices. China also added to the global supply chain issues with its strict “zero-covid” strategy in managing the current pandemic situation. This had added fears that the Fed will continue to be hawkish in the upcoming FOMC in June, July and for the rest of the year to quell inflation.

US Consumer Price Index (YoY%)

Powell signals a 50bps rate hike is likely in each of the next 2 FOMC meetings in June and July. The Fed aims to engineer a “soft landing” despite the consecutive interest rate increase to stabilize prices, however subjected to market circumstances. ARK Innovation (ARKK US) a benchmark for high growth and valuation companies continues to be pressured under current tightened monetary conditions.

US 10 Year Yield (%)

Volatility rose in equities markets with the VIX Index staying elevated in an inverse trend to markets as investors continue to brace more tightening of financials conditions ahead. Cryptocurrencies also went risk off with one of the stable coin TerraUSD’s losing its one to one peg to the US dollar. While sentiment bottom, Samuel Bankman-Fried, CEO of one of the top crypto exchanges FTX, jumped in on a 7.6% stake in Robinhood (HOOD US) amid the volatilities.

Volatility Index (VIX US)

Tesla (TSLA US) Shanghai Gigafactory which produces Model 3 and Model Y with a total annual capacity of 500,000 vehicles, had to suspend its China production amid a supply shortage of parts and ongoing lockdowns that have extended over a month. Domestic deliveries were also temporarily affected falling by 87% yoy in April.

Strong Disney+ (DIS US) subscriber momentum of +7.9m subscribers were reported during the second quarter bucking the trend of its rival Netflix which lost 200,0000 subscribers in the latest quarter. CEO Bob Chapek continued to reiterate guidance of 230m-260m by September 2024. Concerns however linger on the financial impact on park closures in Asia amid lockdowns.

Occidental Petroleum (OXY US) reported another set of record-breaking results surpassing estimates and a strong set of free cash flows that enabled to company to initiate share repurchases and a reduction of the company’s elevated debt. It is reported that Berkshire Hathaway (BRK/B US) continuing to boost stakes to 15.2%.

S&P 500 & Nasdaq Index (YTD)

$Tesla Motors(TSLA)$ $Walt Disney(DIS)$ $Occidental(OXY)$