Preview of the week starting 15Aug22 - Will both Walmart and Sea Limited continue their recovery?
Public Hoildays (SG, Hong Kong, China & USA)
Nil
Earnings Calendar
Walmart
In the one last year, Walmart has fallen by 11.58%. It hit the recent 52-week low of 117.27 after reaching the high of 160.77.
The forecast for the coming earnings is 1.63 and 150.93B for its EPS and Revenue respectively. Will Walmart continue to recover despite inventory challenges (overstock) recently.
SEA Limited
Sea has fallen over 71% from a year ago. Though it is away from the 52-week low of 54.06, it remains a long distance from the 52-week high of 372.70.
The forecast for the coming earnings is -1.14 and 2.99B for its EPS and Revenue respectively. Will Sea Limited be able to continue its recovery? Personally, I will prefer for Sea Limited to enter into profits before willing to invest into the company.
Economic Calendar
FollowingChina's Industrial Production (YoY)falling to 3.8% from the forecast of 4.6%, we see more slowing down in China than expected. The lockdown situation in China seems to be improving with Shanghai schools set to be opened from 1st September 2022 barring any Covid outbreaks. With China being the world's factory, if the production trends downwards, it is not a good sign for the global economy in general.
Crude Oil Inventoriesare an important (forward-looking) indication. Oil needs to be bought, delivered, refined and shipped out to the manufacturers before it can be turned into products like plastic that easily surround us. Thus, if the oil inventory demand is "weak" (seen by having a lesser than expected drawdown of the crude oil inventories), this can lead to a further drop in oil prices. However, this also implies that the oil producers are seeing a lesser demand for oil in the coming months by both manufacturers and consumers. Such demand drop can lead to a recessionary cycle.
Retail Sales (MoM) for Julyis also a good indicator of the recovery of the market as we try to live with Covid.
Initial jobs claimsare the other key data as the Fed needs to incorporate this into their interest rate adjustments. The next FOMC interest rate announcement will only take place in September. They will be looking at a few more such updates before finalising their interest rate adjustment.
News and my Muse
My muse: to beat Tesla, you need more than a better car. You need a better factory.
News - 61% of Americans who are living paycheck to paycheck - what should one prepare for potentially tough times?
Drought affects Europe's crop yield.
PPI is down 0.5% MoM and initial jobless claims (262K) are lesser than the forecast of 263K.
BYD contributes 32.7% of China's NEV sales in July
SAIC-GM-Wuling had an 8.3% share of China's NEV retail sales in July, NIO at 2.1% & Tesla China at 1.7%. BYD achieves zero carbon emissions at Shenzhen headquarters
CONSUMER PRICE INDEX - JULY 2022
The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July on a seasonally adjusted basis. Over the last 12 months, the all items index increased 8.5% before seasonal adjustment. Source: U.S. Bureau of Labor Statistics
CNBC reported thatt grain shortage is expected to last into next year.
China starts autonomous self-driving taxi with Baidu,
Market outlook
From the 1D chart above, we have the following observation:
- The stochastics indicator is ranging. S&P500 can range in stochastic and continue to climb as per the previous trends. However, it is also in the overbought region and the market may peak soon.
- The MACD indicator is still on the uptrend and thus, we can expect the uptrend to continue.
- EMA lines are in an up trend and spread out - thus, the uptrend is likely to continue and be strong.
- The moving average (MA) lines of 50 & 200 are providing the following signals. MA50 is on an uptrend (mid-term) and MA200 is on a downtrend (longer term). With the candles above MA50, it should remain bullish in the short term.
My considerations:
- with inflation remaining at 8.5%, it remains elevated though we should see some relief due to falling fuel costs. It is important to monitor if there is any demand erosion. From the manufacturers and oil producers, there are possibilities of a decline coming up as explained earlier.
- Weather > Europe's agriculture looks to be challenged and the USA's coming crop yield may be affected with the floods, droughts, fire and heat waves. We need to monitor closely.
- Fertilizer - with the Russian sanctions, the world needs to find alternatives for 40% of the world's fertilizer from Russia.
- Elevated housing and rental costs are inflationary in nature.
- More failings of crypto firms
- Expecting the rest of the earnings to be "less" hopeful.
- With the coming winter, the gas situation in Europe needs to be worked out as they remained hostage to Russia.
- There are few global hotspots with tension, wars and rumours of wars - Taiwan, Israel, Armenia, etc
While the market can be irrational longer than we can remain solvent, I continue to remain cautious about the market in lieu of the above reasons. I hope that I am wrong but I still think that we have more trying times ahead.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- chaicka·2022-08-21QT increase to $95B/mth from Sep onward. Rate hike may not tune down (probably maintain 0.50% or 0.75% per FOMC session). For 2022, IMHO, ’surfing’ style trade. Stand-by for inevitable 2023 recession.LikeReport
- LMSunshine·2022-08-17Great info! Thanks🤗2Report
- 小辉goPro·2022-08-16forecast showing smaller invester start seeing recovery1Report
- AlvinLau·2022-08-18good sharing, Thanks1Report
- Andie8392·2022-08-17thanks for sharing .. good post1Report
- hjmac85·2022-08-17Time to buy the dip! Huat ah1Report
- Calvin20·2022-08-16Thanks for sharing1Report
- lappiloco·2022-08-17gotomoon1Report
- yp_shi·2022-08-22[What]LikeReport
- jw_la·2022-08-20CanLikeReport
- RKT·2022-08-19😁1Report
- leeWT·2022-08-18👌3Report
- Kiwo1511·2022-08-18[smile]2Report
- Rtzeey·2022-08-18👍🏻2Report
- SherlynO·2022-08-18Read2Report
- jon_·2022-08-18👍1Report
- PeterLim·2022-08-18Ok1Report
- RamKannappan·2022-08-18Good2Report
- whitesnake·2022-08-18👍🏻1Report
- GerardBungee·2022-08-18ok1Report