To The Moon

What a way to start a new trading week, with a “Bang”. US market rallied after it was announced that US and China agreed to temporarily slash tariffs following negotiations over the weekend in Geneva, Switzerland. The 90-days halt has raised hope that a trade war won’t push US economy into a recession. Personally, I think this is the false hope that traders “want to believe” so that it is trading-as-usual again. US market as of 12 May 2025 By the time US market closed for the day: DJIA: +2.81% (+1,160.72 to 42,410.10). Near intraday high, with strong buying enthusiasm intact. S&P 500: +3.26% (+184.28 to 5,844.19). Index has gained more than 20% since its April 2025’s low. Posted 15 new 52-week highs and 3 new lows. Nasdaq: +4.35% (+779.43 to 18,708.34). Exit bear market with advancing issues outnumbered decliners by a 2.84-to-1 ratio and recorded 83 new highs and 50 new lows. On Monday, about 20.20 billion shares changed hands compared with the 16.52 billion moving average for the last 20 sessions. Can traders & investors look forward to another day of rally ? Apparently not ! The 3 US composite indexes’ futures are poised to open marginally lower on Tuesday (see above) Like previous run up to CPI release, US market is nervous over the Consumer Price index (CPI) report due out today, before trading starts. CPI - Commonsense Prediction? Even without looking at any estimates, anyone who have been following up on Trump’s tariffs policy would already know the outcome. Although Trump’s reciprocal tariffs were put on hold on 09 Apr 2025 for 90-days, almost immediately after it has gone into effect, there’s still the baseline 10% tariffs that’s still in play. For Mexico & Canada, tariff is paused for USMCA-compliant goods while non-compliant goods are subjected to 25% tariffs. Even with the slashing of -115% tariffs off each other, US is still charging a 30% tariff on China’s import and China is still levying a 10% tariff over US imports. The impact for April maybe muted or best case scenario - status quo. This is because many US importers stockpiled goods ahead of tariffs, delaying price adjustments. The inventory buffer likely muted April’s tariff impact. Having said that, consumers might already experience price hikes because businesses have passed on costs. Based on analysts’ comments, the full inflationary tariffs’ impact will take 3–6 months to materialize. The Bigger Picture. CPI data for April 2025, will be important to monitor for any immediate post-tariff inflation impact. Together with US industrial production and retail sales numbers for April, they will be eyed for early indications of whether GDP could fall again in Q2 2025. CPI Forecast by Fed Res. Bank of Cleveland. Looking at Cleveland central bank’s estimates: (see above) Headline inflation. Projected a +0.22% monthly increase, with an annualized rate of 2.43%. This marked a slight acceleration from previous month that saw a -0.1% monthly decline and a 2.4% annual rate. Core inflation. Projected a +0.23% MoM, with a YoY rate of 2.83%. Monthly reading remains status quo but annual rate has edged up marginally from April’s readings. Assuming CPI comes in a slightly higher than last month’s, will US market react negatively and fall as steeply as it has risen on Monday ? What do you think ? Magnificent 7 - Best & Worst Performing Stock. It has been more than a month since I last covered the Magnificent 7 stocks’ movement. With a robust US market, let’s see if it is The Return of The Tech stocks again. (see below) Magnificent 7: Past Month Perf (as of May 13, 2025) Best Performer: $Tesla Motors(TSLA)$ surged the most (+26.17%) over the past month, rebounding sharply from earlier losses. Worst Performer: $Alphabet(GOOG)$ declined the most (-1.17%), with a notable slide in share price. Other (in descending order of gains): $Meta Platforms, Inc.(META)$ : is the 2nd best performing stock coming in at +20.31%. $Microsoft(MSFT)$: Is it any wonder that this is the 3rd best stock, having overtaken Apple Inc by market capitalization. $Amazon.com(AMZN)$ came in 4th after being reprimanded by Trump for thinking of displaying the tariff-amount on his eCommerce platform. Nvidia(NVDA)$ performed ‘better’ than I have expected. It notched a +11.10% after having fallen when Trump further tightened chips export to China, followed by a +145% tax. Apple Inc(AAPL)$ is just chugging along and is expected to weather through Trump’s tariff given the exceptions. Outlook. Tesla: Is expected to remain volatile; recent rally could continue if earnings and production improve and its robotaxi roll out without a hitch. These positive factors are its headwinds too. Meta & Microsoft: Stable earnings and strong fundamentals suggest moderate upside, but less explosive growth than in prior years. Amazon, Apple & Alphabet: Recovery seems possible if trade tensions ease (ultimately) and consumer demand rebounds, but macroeconomic headwinds and high valuations are pushbacks. Nvidia: Remains under pressure due to high expectations and recent profit-taking. Now investors need to wait patiently for Trump’s Middle East (May 13 - 16) trip conclude. Hopefully the Middle East will be able to fill the void left by China. Looks like national security is not that important (afterall) when dollars & cents are concerned. Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. ADM, NKE, GM fall, if US-China Trade Talk Stalls ? TSLA rally for a 4th Week, this Week ? NIO on Catalyst watch, Time to Buy ? Do you think Tesla will be able to retain its lead by end Q2 2025 ’? Do you think US Dept of Justice will be able to successfully break up Google into its constituent parts ? 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