To The Moon

Investors wrapped up a strong week for stocks, after a cooling in trade-war tensions between US and China eased. The Dow erased its 2025 loss, while the S&P 500 scored its 5th consecutive day of gains after trade-war tensions between US & China, eased. As of Fri, 16 May 2025, year-to-date, both Dow and S&P 500 have gained +0.78% and +1.53% respectively. By the time market called it a week: (see above) DJIA: +0.78% (+331.99 to 42,654.74). S&P 500: +0.70% (+41.45 to 5,958.38). P/E ratio has hit a 2-month high. It posted 28 new 52-week highs and no new lows Nasdaq: +0.52% (+98.78 to 19,211.10). 2,792 stocks rose and 1,607 fell as advancing issues outnumbered decliners by a 1.74-to-1 ratio. On Friday, 17.61 billion shares changed hands compared with the 17.04 billion average from the last 20 sessions. US market rallied to cap the week on a high despite weaker-than-expected US economic reports out on Friday. (see below) Consumer Sentiments (May 2025 - Prelim) US consumer sentiment for May 2025 (preliminary) has dropped to 50.8, from April’s 52.2. This is the 2nd lowest reading on record, with the lowest “50” recorded on 24 Jun 2022. At the same time, US consumers' 12-month inflation expectations jumped to 7.3% from April’s 6.5%. (see below) Demographically, both Democrats and Republicans anticipated higher inflation in the near term. Two things to note about this report though : Majority of this survey was completed before the US & China announced a 90-day reduced-tariff between the 2 countries on Mon, 12 May 2025. The pause has taken effect since Wed, 14 May 2025. Will sentiments “improve” when the final report for May 2025 is out on Fri, 30 May 2025 ? US Import Price Index (MoM). On Fri, 16 May 2025, Bureau of Labour Statistics (BLS) released US Import Price Index for April 2025. It showed an unexpected increase of +0.1% from the previous month, following a -0.4% decline in March 2025. This rise defied market expectations, as economists had forecast a -0.4% decrease. Key Drivers. Increase was primarily driven by higher prices for non-fuel imports, which rose +0.4% in April, the largest monthly gain in a year. Notable contributors included Capital goods - import prices rose by +0.6%. Non-fuel industrial supplies and materials. Consumer goods (less motor vehicles) rose by +0.3%. Automotive vehicles import prices rose by +0.2%. Food, feeds, and beverages, import prices were unchanged. In contrast, fuel import prices fell for the 2nd consecutive month, dropping -2.6% in April, after a -3.4% decline in March. This was largely due to lower prices for petroleum and natural gas April 2025’s Import Prices index readings suggest limited overall import-driven inflation (for now). It also highlights underlying price pressures in certain sectors, with future inflation trends likely to depend on (a) the evolving impact of tariffs and (b) global economic conditions. What’s In-store in Coming Week. (1) Economic Reports. Week of 19 May 2025 will be ‘relatively’ quiet, without major economic reports, except for : Mon, 19 May 2025 - US leading economic indicators. Thu, 22 May 2025 - US weekly jobless claims & continuing claims. Thu, 22 May 2025 - S&P Flash US Service & Manufacturing PMIs. (2) Q1 2025 Quarterly Earnings. Similarly, the number of companies reporting their earnings are gradually trailing off as mega caps have all reported, earlier on with only a handful remaining: Tue, 20 May 2025 - $Home Depot(HD)$, $Palo Alto Networks(PANW)$, VIking Holdings (VIK) Wed, 21 May 2025 - $Lowe's(LOW)$ , $Target(TGT)$, $Baidu(BIDU)$, Snowflake Inc (SNOW), $XPeng Inc.(XPEV)$. US Market Mood. (1) Dictator’s Tariffs. The new week should be a “bad” one for investors after Trump announced US’s unilateral tariffs letters to be sent to “non-consequential” countries, to cut short negotiation time. (see below) This is something I have mentioned out in my post, dated 13 May 2025. Click here ! for details, Repost to share ok - tks. This is what happens when there is no thought process before enacting a policy, only to have to backtrack or “fix it” along the way, ensuing uncertainty / chaos and a volatile market in the process. Last week’s US-China trade tension easing euphoria is but temporary as analysts warned that sustaining such rally will be difficult amid ongoing trade tensions. The possible risk of renewed escalation, has once again been ignited by the man who sparked this global frenzy. This is US democracy at its finest. (2) Credit Worthiness Cut. To ensure coming week will be bad for US market was Moody’s Friday breakout news that, it has downgraded US’s credit rating. (see above) Moody’s was the last of the 3 agencies (S&P Global and Fitch Ratings) to do so. (see below) Standard & Poor’s had already downgraded US credit rating since way back in August 2011. Fitch Ratings undertook to cut US’s credit rating only 1 year 8½ months ago. Moody’s delayed its cut as long as possible, throwing in the towel as the cut is responsible. Predictions. (1) Volatility likely, but not full-blown panic: Latest inflation and jobs reports out, suggests some resilience. The S&P 500 has also rebounded and erased year-to-date losses. With the rebound, market strategists caution that equities are now "approaching overbought conditions" and are vulnerable to negative headlines, like the latest Trump has delivered over the weekend. (2) Short-term caution, Slower gains expected: Weariness about US economic fallout from the remaining tariffs-including higher consumer prices, reduced corporate earnings, and slower GDP growth-could limit further stock gains in the near term. The average effective US tariff rate remains historically high (16–18%), keeping pressure on inflation and consumer spending. (3) No widespread panic (yet): While Asian markets and US futures have previously reacted sharply to tariff news, current sentiment is less panicked than during the initial April announcement. Although fears of a worst-case recession scenario have eased (last week), due to temporary truces, it still to-be-seen how countries will react to Trump’s latest declaration, abandoning negotiations upfront. Economic and Market Impacts (4) Consumer Prices and GDP: Short-term consumer prices are expected to rise by 1.7%, with an average household facing a -$2,800 loss in purchasing power (2024 dollars). Real GDP growth for 2025 is projected to be -0.7% lower, and unemployment is expected to rise by +0.4% by year-end. (5) Sectoral Effects: Manufacturing may see modest gains, but sectors like construction and agriculture are likely to contract due to the +30% tariffs imposed on China. (6) US Treasury Rising Further? As reported by Reuter, Immediately after the announcement, yields on US 2-year Treasuries increased, and were up 2 basis points (bps) late on Friday at 3.993%, and climbed to a session peak of 4.012%. Meanwhile, yields on benchmark 10-year notes reversed the earlier fall and jumped as high as 4.499%, as per the report. Latest news ! On Mon, 19 May 2025 - US’s 10-year Treasury yields climbed 4 basis points to 4.52%. US’s 30-year Treasury yields rose 6 basis points to 5.00%, that was last seen in 2023 with a peak of 5.18% (highest since 2007). Time to take (whatever) profits first and then wait for this self-directed chaos to play itself out as US edges closer to end Q2 2025 soon. What do you think ? Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. 3 'Must Buy' Non-US Stocks To Have & Hold ? AAPL Bond 'better' than AAPL Stock ? US Market & WMT end on a Friday Low ? Do you think now’s the time to sell off for profits first, wait for stock prices to fall before entering again’? Do you think US banks will be affected by the downgrade come Monday ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents