To The Moon

Public Holidays

Singapore, Hong Kong, China & the USA do not have public holidays in the coming week.

Economic Calendar (03Mar2025)

from Investing.com

Notable Highlights

• S&P global manufacturing PMI for February will be released with a forecast of 51.6. The market is expecting growth in global manufacturing.

• ISM manufacturing PMI and ISM manufacturing prices will be released in the coming week too. The PMI is a reflection of the growth or contraction of the manufacturing sector. An amount that is more than 50 will reflect growth. However, the price forecast stands at 56.2. This implies inflationary pressure for manufacturing costs, which will likely be passed on to consumers.

• ADP nonfarm employment change has a forecast figure of 144,000. This is a good reference concerning employment in America.

• S&P Global Services PMI has a forecast of 49.7. This suggests that Global Services may have a contraction.

• ISM non-manufacturing PMI and ISM non-manufacturing prices will be released in the coming week. This is a good reference concerning services. The previous price of 60.4 implies a high price that is typically inflationary.

• Average hourly earnings results will also be in the coming week, together with nonfarm payrolls and the unemployment rates. These are important considerations for the Federal Reserve before deciding on the next interest rate decision.

• Initial jobless claims will be announced. The Federal Reserve uses this as one of the key macro data references as it balances inflation and employment in the economy.

• Crude Oil Inventories can be seen as forward indicators of market demand and consumption. If the trend of excess inventories continues, demand erosion can lead to reduced production & weakened consumer spending.

Earnings Calendar (03Mar2025)

I am interested in the earnings of SEA, Crowdstrike, JD, Broadcom, Costco and Kroger in the coming week.

Let us look into SEA Ltd.

Sea Ltd is in the digital entertainment, e-commerce and digital financial service businesses in Southeast Asia, Latin America, Asia and internationally.

Observations:

• The revenue grew from $161 million in 2014 to $13 billion in 2023.

• The operating profit turned black finally in 2023 with an amount of $343 million.

• Earnings per share (EPS) have grown steadily from -$0.34 in 2014 to $0.25 in 2023.

• However, the P/E of the stock remains at 713.3 (very high). Does this imply an overvaluation?

• The 10-year median margins for Gross Profit and Free Cashflow (FCF) are 31.8% and -12.7%, respectively.

The stock price grew 149.3% from a year ago. The technical analysis has a “Neutral” rating. The Analysts Sentiment has a “Buy” rating. The target price is $129.85, which implies an upside of 2.03%.

The EPS and revenue forecast are 0.63 and $4.08B, respectively.

From the data above, Sea Ltd is a stock that we can pay attention to. I prefer better profitability, but it deserves more research for now. For now, I prefer to monitor this stock.

Market Outlook of S&P500 - 03Mar2025

Observations:

• The MACD indicator is starting a downtrend. A top crossover has been completed.

• Moving Averages (MA). Both the MA50 line and the MA200 line are on an uptrend. The MA50 line may see a change in trend direction soon. The last candle is above the MA200 line. The last candle is sitting below the MA50 line. This implies a bullish outlook for long term and a bearish outlook for the mid-term.

• The 3 Exponential Moving Averages (EMA) lines are showing a downtrend.

• Chaikin’s Monetary Flow (CMF) shows an uptrend (above the 0 line). However, the trend has been falling for the last few days.

The S&P 500 index has grown 15.91% from a year ago. For the technical (Daily), it has a recommendation for “Strong Sell”

The S&P500 Technical Analysis (Daily) is showing a “Strong Sell” rating. There are 18 indicators that show a “Sell” rating and 5 indicators showing a “Buy” rating.

The candlestick patterns above point to a more “bearish” output.

With the above information, I lean towards a bearish outlook in the coming days.

News and my thoughts from last week (03Mar2025)

How can the legacy media survive their self-destruction?

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has now erased -$450 BILLION of market cap over the last 24 hours. This comes after the company crushed earnings expectations, posting record quarterly revenue of $39.3B. -X user The Kobeissi Letter

January PCE inflation, the Fed's preferred inflation measure, falls to 2.5%, in-line with expectations of 2.5%. Core PCE inflation was 2.6%, in-line with expectations of 2.6%. This marks the first decline in PCE inflation since September 2024.

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Hedge funds are RUSHING to the exit at nearly a RECORD pace: Hedge funds have been selling US technology stocks in February at the fastest rate since the 2021 Meme Stocks Craziness. Over the last 5 days alone, they reduced their exposure at the 2nd-highest pace in 4 YEARS. - Global Markets Investor

Overvaluation is a part. For those who invested in AI, how long can they wait to reap their rewards. After the earnings of the Magnificent 7, can the S&P493 tank the market?

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Freddie Mac (Housing) delinquencies are now HIGHER THAN 2008

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US credit card debt has hit a record of $1.2 trillion

GERMAN COMPANIES' INSOLVENCIES ARE RISING - German company insolvencies SPIKED nearly 17% in 2024 in November (preliminary). In October, the increase was as much as 36%. In effect, the index of insolvencies rose to the highest in at least 7 YEARS. - X user Global Markets Investor

US CREDIT CARD DELINQUENCIES ARE RISING - US credit card serious delinquency rates for subprime borrowers rose to 22% in Q3 2024, the highest in over 12 YEARS. They account for ~23% of the consumer credit market, according to the Fed. - X user Global Markets Investor

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The US economy is more dependent on the stock market than EVER: The top 10% of US income earners now reflect a RECORD ~50% of all consumer spending. At the same time, the top 10% own ~87% of the stock market. A severe bear market could lead to a depression. All on the Fed? - X user Global Markets Investor

India is home to 1.4 billion people but around a billion lack money to spend on any discretionary goods or services, a new report estimates. Is this an issue of inflation meeting stagnant income? - BBC

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US auto loan serious delinquencies have been rising at an ALARMING pace: US auto loans serious (90+ days) delinquency rates hit the highest level since the Great Financial Crisis. Serious delinquencies have been surging for all age groups with the youngest hit the most. US car market BUBBLE is popping: US auto loans serious (90+ days) delinquency rates hit 3.0% in Q4 2024, the highest in 14 years - the Financial Crisis recovery period. Serious delinquencies now surpassed the 2001 recession and the 2020 Crisis levels - X user Global Markets Investor

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The US job market leading indicator is plummeting: The average weekly hours worked by Americans fell to 34.1, the lowest since the Great Financial Crisis and in line with the 2020 crisis low. Typically, hours worked decrease before LAYOFFS pick up. The US Job numbers have been revised DOWN by a whopping 600,000 for 12 months ending March 2024: The BLS reported in February job numbers were overstated by the most since 2009, the last year of the Great Financial Crisis. Expect more revisions to come. - X user Global Markets Investor

U.S. to Impose Hefty Port Fees on Chinese Ships: Proposal would impose millions in new fees on shipping giants Cosco and Maersk for entering U.S. ports - WSJ

My Investing Muse (03Mar2025)

Layoffs & Closure news

Retailers will close up to 15,000 stores this year, more than double the 7,325 closures in 2024 and breaking the closure record set in 2020 during the pandemic. Retailers are projected to open only 5,800 stores, slightly less than the 5,970 opened last year, but representing a widening gap favoring closings over openings. - Forbes

DBS has identified 13,000 employees that require upskilling or reskilling in order to enable them to be future-ready, it said on Tuesday (Feb 25). This comes after Bloomberg on Monday reported that the lender plans to cut about 4,000 of its contract and temporary staff over the next three years. - Business Times (SG) DBS to cut 4,000 temp staff over next 3 years, replace them with AI. Will there be more AI-led retrenchment?

Onsemi to Cut 9% of Workforce Amid Restructuring Charges related to the layoffs are expected to cost around $50 million to $60 million and be recorded in 2025 - WSJ

EY to cut about 100 staff, warns of ‘targeted restructuring’ - AFR

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Chevron Corp has announced that it will lay off 15-20% of its global workforce and reorganize its business structure. - OilPrice

The Trump administration has restructured USAID, placing employees on leave and cutting 2,000 positions. - LiveMint

TikTok has laid off at least a dozen employees in Singapore as part of long-term growth plans that seek to reduce the global workforce to streamline operations. - VNExpress

Starbucks will lay off 1,100 corporate employees, CEO Brian Niccol said Monday. The cuts will not affect staff at cafes. Niccol said he aims to streamline the company's operations. - CNBC

The above are some snippets of news about layoffs and closures in the past week. There seems to be more of such news in recent weeks. Widespread retrenchment is one of the early signs of a market correction.

Over-Valuation News

These are some news that show overvaluation in the American market:

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U.S. Stock Market reaches the most overvalued level in history - BarChart

Warren Buffett's Berkshire Hathaway cash pile hit a new RECORD of $334.2 billion in Q4 2024. The cash share of total assets hit 29% and even exceeded 2005 levels seen before the Great Financial Crisis. - X user Global Markets Investor

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S&P 500 Price-to-Book (P/B) ratio hit ~5.3x and exceeded the 2000 Dot-Com Bubble Peak levels. Book value is simply the company's total assets minus its total liabilities. P/B ratio has DOUBLED over the last 5 years - X user Global Markets Investor

The news extract above suggests that the market is overvalued.

My final thoughts

I saw the following in of the X posts.

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From X user Guilherme Tavares

The SPX line is expected to move in the same direction as the JOLT line. This is a matter of time before JOLT turns upwards or the SPX line moves downwards.

There seems to be a more bearish sentiment in the market. When such sentiment takes over, it can affect the market much more than statistics or data points. When the market turns fearful, the panic can be exponential, leading to market corrections. Some have said that a market correction is overdue, and we should be prepared for one. With the current valuation, not trading can also be a good trade.

Let us research before investing. I wish you all a great week ahead.

@TigerStars

$Sea Ltd(SE)$

$S&P 500(.SPX)$

$SPDR S&P 500 ETF Trust(SPY)$