To The Moon

Public Holidays

24 & 25 Nov 2022 - US thanksgiving long weekend

Due to the Thanksgiving holiday, the US market will close on Thursday & Friday.

Economic Calendar

Economic Calendar for the week starting 21 Nov 2022

Highlights:

• The situation in US real estate will get a better view following the building permits and new home sales.
• Initial Jobless Claims will also be a key data point for the Fed as they incorporate these data into their next interest rate hike decision. Should the jobless claims remain within expectations, the Fed can expect to remain its hawkish drive using interest rate hikes.
• Crude Oil Inventories help to paint the outlook of future consumption.
• Core Durable goods Orders (MoM October) will be a good reference for the general market “consumption”. This is a reference point used by businesses to gauge the strength of market demand.

Earnings

For the coming week, there are a few earnings of interest. Zoom was one of the Covid brands which was given much attention by Ms Cathie Woods (ARK). With the opening, the stock price has fallen.

Zoom

1 year chart of Zoom

Zoom is lingering near its 52-week low of 70.43. Though there was some recovery, but the stock has yet to establish a convincing reversal. The stock has fallen 67.51% from a year ago, a far cry from its 52-week high of 251.7.

Earnings forecast of Zoom

For the coming earnings, the market has put a forecast of 0.8324 and 1.09B for its EPS and revenue respectively. Will Zoom rise again?

News and my muse

• Africa is the new growth region. The other to consider is BRICS.
• We face daily contests for our time and attention. Our time is our life. It does not mean that we live with FOMO - fear of missing out. We must not go to extreme of trying to do everything today. Life has a pulse, let us plan well. Live, learn & enjoy the moment.
• <Reuters> In this article, various concerns towards Binance have been raised. It is needful for Binance & other crypto players to address these items. We hope that you can work with the authorities for better regulations, governance & security.
• Climate change, food and energy price inflation, debt distress, and an ongoing pandemic have created a dynamic where, in Tooze’s view, “the whole is even more dangerous than the sum of the parts.”
• <Oilprice> German authorities have stepped up preparations for emergency cash deliveries in case of blackouts to keep the economy running. More than 40% of Germans fear a blackout in the next six months, according to a survey by Funke Mediengruppe.
• Will the FTX collapse trigger the crash that we do not wish to talk about? Who else will be brought down? Most of us can accept losses from our own investing mistakes, but not from such crimes. I believe in justice. Let us learn from this.
• Should harvest, fuel, supply chain and conditions worsen, food can get more expensive though prices have reached decade-high levels.
• The crypto crash - where regulations, governance & security have failed on My muse through an Asian lens
• <New York Fed> Household Debt Rises to $16.51 Trillion on Higher Mortgage, Credit Card Balances. Total household debt rose by $351 billion, or 2.2% in Q3 of 2022. Mortgage balances climbed $282 billion & stood at $11.67 trillion at the end of September.
• <BusinessTime> CREDIT Suisse Group has started cutting senior bank jobs in Asia including 3 managing directors across investment banking & financing as the Swiss giant carries out its plan to reduce global headcount by 9,000.
• <Freightwave> FedEx Freight, the less-than-truckload arm of FedEx Corp. and the nation’s largest LTL carrier, said Saturday it will furlough an undetermined number of drivers starting in early December. This should be a busy period leading to Christmas.
• <NYTimes> Meta - The job cuts of approximately 10,000, which would start as soon as this week, would focus on the company’s devices organization, retail division and human resources.
• <NRN> Nearly 50% of small restaurant businesses were unable to pay the rent in October. In September, 36% of restaurants couldn’t pay their rent, while in August and July, the number was 46% and 45%, respectively.
• Student loan forgiveness is inflationary in nature. While student debt is a problem, one man's debt is another man's asset. Someone will have to pay for this in the end. What is of greater concern - this may not address the root causes.

"It's amazing how well Berkshire Hathaway and the Daily Journal for that matter have succeeded with nothing more than basic morality & sturdy common sense" - Charlie Munger Morality and common sense matter in investing.

• "You can spend all your time making money. You can spend all your love making time" - The Eagles' hit "Take it to the limit". The most important return from our investments is to gain time on our hands, for the people & things that we love.

Market outlook (S&P500) technical analysis

S&P500 `1D chart as of 20Nov22

Observations from the S&P500 1D chart:

• Stochastics indicator is showing a downtrend.
• MACD indicator is showing an uptrend.
• Note that the trading volume has been in decline over the course of the last week. Volume is a sign of momentum or strength for the ongoing trend.
• Moving Average (MA). Both MA50 & MA200 are showing a downtrend for both the mid and long-term. With the candles above MA50 and under MA200, this can also be interpreted as the mid-term being bullish but the longer-term being bearish.
• Exponential Moving Averages (EMA). The EMA lines are still showing an uptrend with signs of the lines converging. Whenever the EMA lines converge leading to a crossover, this can be read as a reversal of the current trend.

Based on the indicators above, it seems to be mixed. Though I lean towards a potential “peaking”, we may expect a downtrend after which. This is also Thanksgiving week with the US having a short trading week.

My investing muse

Flu & Covid converge in the US

In the US, it was reported by CNBC that pediatric hospitals are at an average of 78% hospitalization capacity due to the surge of RSV. In fact, the children’s hospitals are requesting for Biden Administration to declare a state of emergency.

News extract about RSV surge in US ~ CNBC

With Covid19 seeing some surge, the hospitals are concerned that they will be pushed beyond capacity with the coming winter. This is a developing situation that can disrupt the nation. With 55 million expected totravelduring Thanksgiving, the medical sector has warned of a surge following this holiday.

China eases lockdown

China lockdown news

China is imposing lockdowns despite some easing of Covid19 restrictions. This is of concern for both factory production and also livelihood. This would have some ripple effects on the world economy. Hopefully, the easing will be able to bring some relief though global demand looks to be going down.

Ukraine

So long as the Ukraine war drags on, the side effects will continue to ripple through the world economy. Fighting a war requires resources. The backing of the EU and USA looks to be tested as more citizens have raised their concerns about the resource crunch. With most of the global economy facing inflation, food and energy challenges, there are more people who have requested to return to “peace” talks to end the war. Have we wondered why these are not covered as much in the mainstream media?

US 2022 mid-term elections

While Democrats take the Senate, the Republicans are likely to take the House. This implies that most of the policies passed by the Democrats may not be cleared unless they can reach a bipartisan consensus. The next 2 years look to be a political stalemate with Biden facing challenges to pass most of their plans. This does not bode well especially when the country is still trying to navigate away from Covid, inflation and weather & supply chain challenges.

FTX

I am not an investor in Crypto because of a lack of regulations, governance and security. I do not know enough to trade crypto. I know well enough that I avoid things that I cannot value or understand.

With a brief look into Binance, the remaining (& biggest) crypto exchange in the world, I am not sure if we have any creditable players left in the field. Binance should address the concerns raised by countries like UK and Italy so that they can be reinstated to trade in these countries. These are part of the due diligence required by the various authorities.

Apart from the news of more retrenchment, increasing household debts, stubborn inflation, extreme weather & various supply chain challenges, it is hard to be bullish for the market. This is not a time to panic or panic selling. Let us consider tax loss harvesting for some of our underperforming stocks. Selling these non-performers at a loss helps us to pay lesser taxes. It is a time to be prudent, avoid leverage, and spend within our means. Let us consider setting “cash for crash” so that we can buy great companies at good discounts.

Have a blessed Thanksgiving. Let us count our blessings and not forget charity & the underprivileged. Let us pay it forward during this season.

@TigerStars

$Zoom(ZM)$ $S&P 500(.SPX)$