To The Moon

Public Holidays Nil Economic Calendar (17 Apr 2023) This was the update from the week ending 14 Apr 2023: The biggest good news is CPI dropped YoY from 6.0% previous month to 5.0% (much lesser than the 5.2% estimate) PPI came out to be -0.5% compared to 0.1%. This is the inflation that hits producers first (before being passed downstream to the consumers seen in CPI). This implies that there is a chance for some components of CPI to be lowered in the coming update. Crude Oil Inventories ended with an excess of 0.597M compared to an expected drawdown of 0.583M. This implies that the demand looks to be weaker than expected. Initial Jobless Claims came out higher (239K compared to the expected 232K). There is more unemployment than expected. Retail Sales came out to be more disappointing than expected. This can imply the erosion of demand. Let us monitor. If this persists, revenue may be lower in the coming months for retail. Is this the decline that we dread to hear? Economic Calendar for the week starting 17 Apr 2023 Notable highlights: China data GDP, Industrial Production (YoY March) & PBoC Loan Prime Rate - China is a key global player. If the GDP is lower, the rest of the world could be affected too. Industrial production is expected to be 2.6% ~ an indication of the health of China’s production in response to global demand. The Loan Prime Rate can affect the amount of consumption and savings too within China. Building Permits (Mar) - This helps provide insight into the state of the real estate market in the US. Philadelphia Fed Manufacturing Index (Apr) - This reveals the extend of growth or decline of the manufacturing sector. Employment-related> initial jobless claims will reveal the extent of the jobless/unemployment situation, a data point for consideration leading to the final interest rate decision. Crude Oil Inventories can be seen as forward indicators of market demand and consumption. If the trend of excess inventories continues, this implies demand erosion that can lead to reduced production & weakening consumer spending. Earnings Calendar (17 Apr 20230) As per the table below from Factset, Bloomberg, 87% of S&P500 earnings will be announced by the week ending 5th May 2023. Thus, we would know how the market, economy and outlook by 5th May 2023. S&P earnings timeline Earnings for week starting 17 Apr 2023 This is an important week of earnings. There are a few notable earnings that I am looking out namely Tesla, SAP, Morgan Stanley, TSMC, P&G and AT&T. Earnings for Tesla The above are earnings summaries of Tesla provided by ChatGPT. Tesla has fallen 43.65% from a year. The 52-week range is 101.81 to 364.07. Currently, Tesla seems to be ranging about 190. Tesla’s P/E ratio standards at 45.86 with an EPS of 4.02 For the coming earnings, Tesla is expected to reach an EPS of 0.8577 and revenue of $23.78B. Will Tesla be able to break the ceiling range near 200? News and my muse - bank earnings, insider sales from Apple & CRE What happens to the de-dollarization of USD should US default on their bonds & treasuries? The move comes as the Big Tech companies reel from the consequences of overhiring. Critics have said that these companies hired people to do "fake work," rather than anything meaningful to the bottom line. Wonder why the Apple insider sales? Apple Inc.’s personal computer shipments declined by 40.5% in the first quarter, marking a tough start to the year for PC makers still grappling with a glut of unsold inventory. Electric vehicle giant BYD announced a new technological system for stabilizing car rides through rugged terrain, sharp turns & shallow water. The shock absorption tech is a feature of the company’s recently launched premium brand Yangwang. Outlook for credit access and inflation worsens, NY Fed survey shows Consumers are getting more pessimistic about inflation and their access to credit, according to the results of a monthly survey the New York Federal Reserve released Monday. definition of plutocracy Plutocracy is a government controlled exclusively by the wealthy, either directly or indirectly. A plutocracy allows, either openly or by circumstance, only the wealthy to rule. Almost a quarter of office-building loans need to be refinanced in the next year at higher rates and lower quality properties where vacancy rates are high are at the greatest risk. US Bank Lending Drops by Record $105 Billion in Two Weeks, Trillions Moving to Money Market Accounts, Elon Musk Warns ‘Trend Will Accelerate’ Highly classified Pentagon documents leaked online revealed how the US spies on allies & foes alike, deeply rattling US officials, who fear the revelations could jeopardize sensitive sources & compromise important foreign relationships. Independent mortgage banks & mortgage subsidiaries of chartered banks lost an average $301 per loan, largely to the increased cost of financing a loan and decreased housing According to data released by Descartes on Tuesday, U.S. imports totaled 1,853,705 twenty-foot equivalent units in March, down 27.5% year on year but up 6.9% from February and up 4.2% from March 2019, pre-COVID. US import has a major YoY drop and there is inventory build-up in the US. This implies that the goods are not sold as quickly as forecast. Suppliers could be forced to sell at discounts. Argentina is tackling a severe economic crisis. Government figures show more than 18 million people are unable to cover their basic food needs. Rising inflation and a sluggish economy have left more people homeless. The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1% in March on a seasonally adjusted basis. Over the last 12 months, the all items index increased 5.0% before seasonal adjustment. “The main takeaway from Wednesday’s Federal Reserve minutes is that the central bank anticipates a mild recession in late 2023 and that the soft landing window seems to be closing quickly,” - Nancy Davis, Quadratic Capital Management Producer Price Index (PPI) has reported a major drop yesterday. PPI precede CPI. There are other reports of excessive inventory on hand. Could this be due to overstocking & demand erosion? More CPI drop to follow? Growth of China’s dominance European funds invested directly in real estate recorded outflows of £172 million ($215.4 million) in February, according to Morningstar Direct data. Some analysts now see real estate stocks falling by 20%-40% by next year. Market Outlook - 17 Apr 2023 1D chart of S&P 500 Technical observations of the S&P500 1D chart: The stochastic indicator has completed a top crossover and a downtrend is expected though it is also possible to be ranging sideways. The MACD indicator is on an uptrend. Moving Averages (MA). The MA50 line implies an uptrend in the mid-term. The MA200 line is turning upwards and could imply an uptrend in the long term. With the last candle being above both the MA50 line and MA200 lines, this can be interpreted as an uptrend in the mid-term and the long-term. Exponential Moving Averages (EMA). The lines are on an uptrend. From the above technical indicators (for 1D), the market looks to be going up, with all 21 technical indicators recommending a strong buy. However, should the earnings disappoint, the drop could be significant. My investing muse - CPI, bank and AI The earnings of the Big 3 banks (JP Morgan, Citibank & Wells Fargo) came out to be better than expected. It gave a strong start to the earnings season. However, the Big 3 banks have benefited as consumers moved their deposits out of smaller/regional banks. Most of these have ended up with the Big 4 (including Bank of America). The banking crisis is yet over. With the latest interest rate hike, the banking sector would have incurred more unrealized losses to their long-term assets like bonds and treasuries. Though these could be held on till maturity but these would also be one of the first assets to be liquidated in event of a bank run. CPI came out to be much lesser than anticipated. The market breathed a sigh of relief with YoY falling from 6.0% last month to the latest 5.0%. This is a significant drop in terms of inflation. The market is guessing that the Fed may take a “less hawkish” approach especially when the initial jobless claims rise. However, we need to understand that 5.0% YoY inflation remains a long way from the target of 2.0%. Thus, the Fed may still remain hawkish till the job is done. AI remains a hot topic as more look to this to improve their productivity while reducing their costs. Beyond just business matters, it is needful for us to look at aspects concerning ethics, fair competition, content ownership and integrity. The progress made by AI is astounding in some sectors and this could lead to even more retrenchment along the way. Conclusion We have some good news and the technicals are showing a potential market rally in this coming week. As more earnings are reported, let us take note of the outlook too as this would way on the market sentiments and the stock prices. With more warning about a coming recession, it is time for us to review our portfolio. Maybe we should cut some losses from stocks that are losing value and consider some hedging strategy as we prepare for more challenging days ahead. @TigerStars $S&P 500(.SPX)$ $Tesla Motors(TSLA)$ $Apple(AAPL)$