To The Moon

Public Holidays

Singapore is closed on Monday, 12 May 2025 as we celebrate Vesak’s Day.

There are no public holidays in America, China and Hong Kong.

Economic Calendar (12May25)

Notable Highlights (some are taken from Grok)

• Core CPI (MoM) is expected at 0.3% (up from 0.1%), and CPI (YoY) at 2.4%. These inflation figures are critical. If actual numbers exceed forecasts, it may signal rising inflationary pressures, potentially prompting a tighter Federal Reserve stance. CPI (MoM) at 0.3% (previously -0.1%) reinforces this trend.

• Core Retail Sales (MoM) at 0.3% (down from 0.5%) and Retail Sales (MoM) at 0.1% (down from 1.5%) suggest a slowdown in consumer spending, which could signal weaker economic growth.

• The Philadelphia Fed Manufacturing Index at -26.4 points to continued contraction in manufacturing. PPI (MoM) at 0.2% (up from -0.4%) adds to inflation concerns.

• Fed Chair Powell Speaks (May 15, 2025): Powell’s speech at 20:40 will be pivotal. Markets will look for hints on the Fed’s reaction to the inflation data and economic slowdown signals. A hawkish tone could strengthen the USD and pressure equities, while a dovish tone might support risk assets.

• Initial jobless claims will be announced. Initial Jobless Claims at 228K (slightly up) indicate a stable but not improving labor market. This weekly report tracks the number of new unemployment claims, serving as a leading indicator of labor market health. 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. This event tracks the weekly change in U.S. crude oil inventories, an oil supply and demand indicator that can impact oil prices and energy markets. If the trend of excess inventories continues, demand erosion can lead to reduced production & weakened consumer spending.

Overall: Inflation is trending higher, but retail sales and manufacturing data suggest economic softness. The Fed may face a balancing act—addressing inflation without stifling growth. Markets will likely remain volatile, with a focus on Powell’s remarks for clarity on future rate decisions.

Earnings Calendar (12May25)

I am interested in the earnings of JD, Sea, Monday, NU, Tencent, Alibaba, Walmart and John Deere.

Let us look at Monday.

Monday’s stock price grew 53% from a year ago. The technical analysis recommends “Strong Buy”. The Analysts’ sentiment has a “Buy” rating. The price target of $343.89 suggests an upside of 23.59%.

Revenue

• Growth Trend: Monday.com's revenue has grown significantly, increasing from $78 million in 2019 to $972 million in 2024. The 6-year compound annual growth rate (CAGR) for revenue is not explicitly provided but can be inferred as substantial (approximately 52% CAGR based on the data).

• Key Milestones: Revenue growth was strong, with increases of 106.3% in 2020, 91.3% in 2021, 68.4% in 2022, 40.6% in 2023, and 33.2% in 2024, reflecting rapid expansion driven by demand for its work management platform.

• Competitive Advantage: Monday.com’s impressive revenue growth highlights its strong position in the software-as-a-service (SaaS) market, capitalising on the shift toward remote work and collaborative tools, with a scalable platform that caters to diverse industries.

Operating Profit

• Growth Trend: Operating profit has improved, moving from a loss of -$93 million in 2019 to a loss of -$21 million in 2024. The operating margin has also improved, from -118.5% in 2019 to -2.2% in 2024.

• Operating Margin: The operating margin has shown steady improvement, moving from -118.5% in 2019 to -93.4% in 2020, -40.9% in 2021, -29.3% in 2022, -5.3% in 2023, and -2.2% in 2024, indicating progress toward profitability.

• Competitive Advantage: Monday.com’s narrowing operating losses demonstrate its ability to scale efficiently while managing costs, a key strength for a high-growth SaaS company as it approaches profitability.

Earnings Per Share (EPS)

• Growth Trend: EPS has improved from a loss of -$2.36 in 2019 to a profit of $0.62 in 2024. Growth rates show significant improvement, such as 34.0% in 2022, 98.7% in 2023, and 1,650.0% in 2024, reflecting the transition to positive earnings.

• Volatility: EPS has been volatile, with a notable decline of -66.1% in 2020 and -15.6% in 2021, but the recent shift to positive EPS in 2024 is a strong positive signal.

• Competitive Advantage: The shift to positive EPS in 2024 highlights Monday.com’s maturing business model and ability to generate shareholder value, driven by its growing customer base and product adoption.

Price-to-Earnings (P/E) Ratio

• Valuation: The P/E ratio is very high at 437.8, reflecting Monday.com’s low earnings relative to its stock price and the market’s high expectations for future growth.

• 10-Year Median Returns: Specific median returns over 10 years are not provided, but from 2019 to 2024, return on assets (ROA) improved from -88.9% to 2.2%, return on equity (ROE) from -87.4% to 3.5%, and return on invested capital (ROIC) from -96.9% to 3.3%, showing a positive trend.

• Competitive Advantage: The high P/E ratio indicates strong market confidence in Monday.com’s future growth, supported by its improving returns, though it also suggests potential overvaluation if growth expectations are not met.

Free Cash Flow (FCF)

• Growth Trend: The EV/FCF ratio is 42.7, indicating a high valuation relative to free cash flow, but the screenshot does not provide a specific FCF CAGR. The improving operating profit suggests progress toward positive cash flow generation.

• Capital Structure: The screenshot does not provide debt/equity or debt/assets ratios, but Monday.com is known for maintaining a low-debt profile, focusing on equity financing to support growth.

• Competitive Advantage: Monday.com’s improving financials suggest it is moving toward stronger cash flow generation, which supports its growth initiatives, such as product development and market expansion.

Overall Assessment

Over the period from 2019 to 2024, Monday.com has demonstrated exceptional growth, with revenue increasing significantly and operating losses narrowing to -$21 million in 2024. EPS has shifted from a loss to a profit ($0.62 in 2024), with strong growth in recent years. The company does not pay dividends, focusing on reinvestment to fuel growth. The extremely high P/E ratio (437.8) reflects market optimism about Monday.com’s future, though it also suggests potential overvaluation. Improving ROIC (3.3% in 2024) and a high gross margin (89.3%) underscore its competitive advantages, including its leadership in work management software, a scalable SaaS model, and growing adoption across industries. Monday.com’s focus on collaborative tools positions it well for continued growth, though its high valuation requires sustained performance to justify investor expectations.

The forecast of the EPS and revenue are 0.703 and $275.61M. For this stock, I choose to observe from the side for now.

Market Outlook of S&P500 - 12May25

S&P 500 has risen 8.55% from a year ago.

From the Daily interval technical indicators, they point to a “Strong Buy” rating for the S&P 500. 18 indicators have a ”Buy” rating and 3 with a “Sell” rating.

Technical analysis of S&P 500:

• Exponential Moving Average (EMA) lines are on an upward trend (short to medium term).

• The MACD indicator shows an uptrend and may peak in the coming days.

• A death cross was formed following the intersection of the MA 50 line (from the top) with the MA 200 line. This implies a pending downtrend.

• With the candles above the MA50 line and below the MA200 line, this implies a bullish trend in the mid-term and bearish in the long term.

• The Chaikin Money Flow (CMF) indicator shows more buying than selling volume. There is a weakening buying momentum.

Observations about the candlestick patterns (inputs from Grok):

• Bearish Signals Dominated Early 2025: Patterns like the Evening Doji Star, Doji Star Bearish, Three Black Crows, and Three Outside Down (Feb-Mar 2025) accurately predicted the sharp correction from the S&P 500’s peak near 6,000 to its low around 5,345.01. These patterns reflect strong selling pressure and a reversal of the prior uptrend.

• Recent Bullish Signal: The Bullish Doji Star (Apr 25, 2025) aligns with the recent recovery in the S&P 500, as the price has risen to 5,659.91. This suggests that the market may be attempting to reverse the downtrend, though it’s still below the longer-term resistance levels (e.g., 200-period MA at 5,748.28 from prior analyses).

With the factors above, the S&P 500 should be on an uptrend in the coming days. The S&P 500 may hit a peak in the coming days.

News and my thoughts from last week (12May25)

10000 hours do not guarantee success but it is part of the journey to mastery. Buffett underlined the importance of identifying what skills you already have and what you love doing, and then find people who can teach you to improve. Ideally that means spending time with instructors or mentors, though it may be just as valuable to read what experts in your field have written on the subject. - CNBC

“Energy costs are a significant factor in the overall production cost of a smelter. High energy costs plague the US aluminium industry, forcing cutbacks and closures.” - Wood Mackenzie (CNBC)

Xeneta’s Chief Analyst warns that a return to Red Sea routes could flood the market with capacity, potentially causing a dramatic collapse in freight rates, further exacerbated by a slowdown in U.S. imports. - GCaptain

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Listings just hit 123,000 in April 2025. 53% higher than normal. And prices are now dropping across the state. - X user Nick Gerli

For the first 3 months of 2025, nonfarm payrolls have been revised DOWN by a total of 124,000. March alone was revised by 43,000, Overall, 12 out of the last 15 months have been revised down

New York Services sector outlook is at CRISIS levels: Business climate expectations in the NY services sector fell to -50 points in April, the lowest since the GREAT FINANCIAL CRISIS. Economic conditions dropped to -60.7 points, the lowest in 4 years - X Global Markets Investor

Check out the April data: China’s exports to the US: Down 17% but China’s TOTAL exports: Up 8% - X user S. L. Kanthan

Doctors warn accounting firms against private-equity firms, citing eroded patient care under their ownership. Profits over purpose & people? - WSJ

Cargo thieves are attacking the U.S. supply chain at alarming rates - CNBC

"Our 12-month recession risk estimate remains 45%. Beyond US-China, we still expect further tariff increases and a meaningful risk that some of the paused “reciprocal” tariffs will take effect after all." - Goldman Sachs from The Street

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US companies announced $233.8 billion in buybacks in April, the second-highest amount since data began in 1984. This is a sharp reversal from the $39.1 billion announced in March, the least since October 2020. Year-to-date, repurchase announcements have reached a record $665.1 billion. Buyback announcements have now surpassed the previous high of $598.5 billion set in 2022. US executives appear to be signalling confidence in their stocks after the recent market sell-off.

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Home insurance rates are going up across the U.S., and in some places, people are losing coverage altogether. One of the biggest reasons? Natural disasters are worsened by increasing temperatures. - The CoolDown

McDonald's sales in the US dropped by the most in 5 YEARS: US same-store sales fell 3.6% year-over-year in Q1 2025, the most since the 2020 CRISIS. This comes as consumers sharply pulled back on spending. Consumer spending accounts for ~70% of GDP - X user Global Markets Investor

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Berkshire Hathaway's cash position when Warren Buffet announced his retirement. - X user Financelot

'We wouldn’t bet on a currency going to hell': Warren Buffett’s big warning on the U.S. dollar - BusinessToday

“Dip in container ship arrivals started,” the report states. “For example, only 14 arrived past three days, and only 10 are scheduled to arrive next three days, whereas 17 in three days would be ‘normal.’” - Daily Breeze

Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers, have so outpaced their American counterparts that ‘Made in the U.S.A.’ is no longer a viable option for most Apple products.” - Inc

Protectionism can be an admission that the country has fallen behind, but some protectionism can be needed.

My Investing Muse (12May25)

Layoffs & Closure news

• As leases expire, Family Dollar is closing over 1,000 store locations. But the discount chain is trying to breathe new life into the stores that remain. - The Street

• Now, Rite Aid is putting close to its entire real estate portfolio up for grabs as part of the Chapter 11 process. Rite Aid has almost 1,200 store leases and is looking to have bidders take over. - the Street

• The Olefins 6 “cracker” facility in Teesside, controlled by Sabic, employs hundreds of workers and has been undergoing a major conversion to run on gas feedstock. But Sabic paused that work months ago and is now understood to be on the verge of announcing the plant’s closure amid spiralling costs and concerns about high energy prices. - Telegraph UK

• DHL to close Southern California warehouse, lay off 346 workers. Competitor UPS plans to close small Wisconsin facility. - FreightWaves

• Presently, JCPenney operates just over 600 stores, and it continues to close more. And now it plans to close seven stores by the end of May 2025. - The Street

• Hudson’s Bay is about to disappear. The oldest company in North America (founded in 1670) is about to close its doors forever. - UnionRayo

• A Detroit-based grocery-hauling company with over 300 trucks has filed for bankruptcy alongside several partner companies. SFD estimated 5,001 and 10,000 creditors, with liabilities totalling between $500 million and $1 billion. - FreightWaves

• Big Four accounting firm PwC is laying off about 1,500 employees in the United States, a company spokesperson said on Monday (May 5). - Business Times

• MGM Resorts International has issued layoffs that will affect concierge services at several of its Las Vegas properties on the city’s iconic Strip - TravelNoire

• Layoffs tied to the manufacturing, distribution and freight sectors have surged across the southeastern U.S. since the beginning of April. More than 1,300 job cuts have been announced, according to media reports and WARN Act notices. - FreightWaves

• Intel plans massive layoffs under new CEO: 21,000 employees to lose their jobs - Infoemplea2

These developments highlight mounting pressures across retail, manufacturing, logistics, and professional services, driven by high costs, bankruptcy proceedings, and strategic downsizing. Coupled with concerns over consumer debt, CMBS, federal and corporate debt, and geopolitical uncertainties, these trends reinforce the need for a cautious investment stance. Close monitoring of economic indicators and global developments is critical.

Of Debts and Delinquency

Here is some of the news involving debts and delinquency.

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In 2025, $7 trillion worth of Treasury debt comes due. That’s what is called a “maturity wall” The government’s only option is to borrow new money to pay back the maturing debt - X user Bravos Research

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The delinquency rate on commercial mortgage-backed securities (CMBS) for offices rose to 10.3% in April, near the highest on record. Delinquency rates on these loans are now up 9 percentage points over the last 3 years. By comparison, delinquency rates hit 10.7% at the post-2008 peak. The multifamily delinquency rate surged 113 basis points in April, to 6.57%, the highest since 2015. The overall US CMBS delinquency rate jumped to 7.03%, the highest since January 2021. The commercial real estate crisis is worsening. - X user The Kobeissi Letter

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US federal interest costs hit $1.1 TRILLION in Q1 2025, just shy of a record set in Q4 2024. As a % of tax receipts, this is ~35%, only below the 1980s-1990s, and above the World War II levels. - X user Global Markets Investor

My final thoughts

In conclusion, this week's market outlook calls for heightened caution. Rising consumer debt, commercial mortgage-backed securities (CMBS) vulnerabilities, escalating federal deficits, and corporate debt levels pose significant risks that could sway market stability. Additionally, the China-USA meeting in Switzerland, aimed at charting a path forward, warrants close attention, as do the ongoing military hotspots that could further unsettle global markets. While opportunities may arise, a prudent approach—marked by monitoring and disciplined risk management—is essential to navigate these turbulent waters.

Let us review our expenditures, income, and savings. Let us spend within our means, invest with what we can afford to lose, and avoid leverage. I am reviewing my holdings and plan to cut losses with businesses losing their competitive advantages. I would also consider hedging and adding some defensive positions.

Let us do our due diligence before we take up any positions. Let us have a successful week ahead.

@TigerStars

$Monday.com Ltd.(MNDY)$

$S&P 500(.SPX)$