To The Moon

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Economic Calendar (19May25)

Notable Highlights (some are taken from Grok)

• S&P Global Manufacturing PMI (May): Previous at 50.2, slightly above the neutral 50 level, indicating potential stabilisation in manufacturing activity.

• S&P Global Services PMI (May): Previous at 50.8, also above 50, pointing to modest growth in the services sector.

• Existing Home Sales (Apr): Forecasted at 4.10M, up from the previous 4.02M, indicating a potential slowdown in the housing market.

• New Home Sales (Apr): Forecasted at 700K, down from the previous 724K, suggesting a potential drop in new home purchases.

• Initial jobless claims will be announced. Initial Jobless Claims is forecasted at 232K, slightly above the previous 229K, suggesting a weakening labour market if the forecast holds. This weekly report tracks the number of new unemployment claims, serving as a leading indicator of labour 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.

This week will provide insights into the U.S. economy’s health, particularly in labour, manufacturing, services, housing, and energy sectors.

Earnings Calendar (19May25)

I am interested in the earnings of Zoom, Snowflake, Target, Lowe’s, WIX and Palo Alto.

Have we considered Snowflake?

The stock price grew 13.1% from a year ago. The Technical Analysis recommends a “Strong Buy” rating, and the Analysts’ Sentiment has a “Buy” rating. The price target is 200.82 with an upside of 9.69%.

Revenue

• Growth Trend: Snowflake's revenue has grown dramatically, increasing from $97 million in 2019 to $3.626 billion in 2025. The 7-year compound annual growth rate (CAGR) for revenue is not explicitly provided but can be inferred as substantial (approximately 83% CAGR based on the data).

• Key Milestones: Revenue growth was exceptionally strong, with increases of 173.9% in 2020, 123.6% in 2021, 106.0% in 2022, 69.4% in 2023, 35.9% in 2024, and 29.2% in 2025, reflecting rapid adoption of its cloud data platform. I have some concerns about falling revenue.

• Competitive Advantage: Snowflake’s explosive revenue growth underscores its leadership in the cloud data platform market, benefiting from the shift to cloud computing and its ability to serve enterprises across multiple cloud providers (AWS, Azure, Google Cloud).

Operating Profit

• Growth Trend: Operating profit has remained negative, worsening from a loss of -$185 million in 2019 to a loss of -$1.456 billion in 2025. The operating margin has improved slightly, from -191.9% in 2019 to -40.2% in 2025.

• Competitive Advantage: Snowflake’s persistent operating losses reflect its focus on growth over profitability, a common strategy for high-growth tech companies. Its improving margin suggests progress toward efficiency, though profitability remains a future goal. This is a red flag for me when increasing revenue correlates with increasing operating profit.

Earnings Per Share (EPS)

• Growth Trend: EPS has remained negative, worsening from -$0.75 in 2019 to -$3.86 in 2025. Growth rates show volatility, with declines like -95.7% in 2020, -160.6% in 2021, and -51.4% in 2025, reflecting ongoing, increasing losses.

• Volatility: EPS has consistently deteriorated, driven by increased operating losses and share dilution as Snowflake invests heavily in growth.

• This is a concern as the company continues to bleed losses. With increasing revenue, the losses continue to grow. There is limited optimism for a turnaround.

Price-to-Earnings (P/E) Ratio

• Valuation: The P/E ratio is negative at -47.6, reflecting Snowflake’s ongoing losses and the market’s focus on its growth potential rather than current earnings.

Free Cash Flow (FCF)

• Growth Trend: The EV/FCF ratio is 64.4, indicating a high valuation relative to free cash flow, but the screenshot does not provide a specific FCF CAGR. The improving operating losses suggest progress toward better cash flow generation.

• Competitive Advantage: Snowflake’s improving financials suggest it is moving toward stronger cash flow generation, which supports its growth initiatives, such as expanding its cloud data platform and customer base.

The EPS and revenue forecast are 0.211 and $1.01B. It seems that Snowflake is on its way to breakeven. Let us monitor.

Market Outlook of S&P500 - 19May25

From the Daily interval technical indicators, they point to a “Strong Buy” rating for the S&P 500. 20 indicators have a ”Buy” rating and 0 with a “Sell” rating.

Technical Analysis for the S&P 500:

• The price is above the 8, 13, and 20-period EMAs, as well as the 50-period MA, indicating a strong short-to-medium-term bullish trend.

• The MACD line is above the signal line with a positive histogram, indicating strong bullish momentum in the short-to-medium term. The bullish crossover (MACD above signal) and the widening positive histogram confirm the increasing buying momentum, aligning with the recent price surge above key moving averages.

• A CMF value close to 0.3 reflects strong accumulation, supporting the recent price increase and suggesting that the uptrend has solid backing from market participants. This is the highest CMF value seen in the recent charts, reinforcing the strength of the current bullish move.

• This increase in volume during the rally adds credibility to the bullish trend, indicating broader market participation in the upward move.

• Short-Term: Bullish. The price is above the short-term EMAs and the 50-period MA, with a strong bullish MACD crossover, high CMF, and increasing volume, confirming a robust uptrend.

• Long-Term: Bullish. The break above the 200-period MA (5,789.85) signals a potential reversal of the prior downtrend. If the price sustains above this level, it could confirm a longer-term bullish trend.

Observations about the candlestick patterns (inputs from Grok):

• Short-Term Outlook: The emerging Morning Doji Star and Morning Star patterns, combined with the strong technical indicators from the prior analysis, suggest that the S&P 500 is likely to continue its upward trajectory. The next target is the prior high around 6,000, which could be tested soon if the bullish momentum persists.

• Long-Term Outlook: The break above the 200-period MA and the current bullish candlestick patterns indicate that the S&P 500 may be entering a new longer-term uptrend. However, confirmation will depend on sustaining above the 200-period MA and breaking the 6,000 resistance with strong volume.

• Actionable Insight: The bullish candlestick patterns and technical indicators support a continuation of the uptrend. Traders should watch for a break above 6,000, which could signal a return to the prior highs. If the price pulls back, the 200-period MA (5,789.85) should act as strong support. Monitor volume and CMF to ensure the bullish trend remains intact.

With the factors above, the S&P 500 should be on an uptrend in the coming days.

News and my thoughts from last week (19May25)

Some of us are fixated on the tariffs. While we wait on the tariffs outcome, there are other areas that we should monitor - banking, debts (federal, corporate and consumer - auto, mortgage, credit card, BNPL, credit), real estate, retail and insurance.

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US consumer credit card serious delinquencies are rising at a CRISIS pace: The share of US credit card debt that is past due at least 90 days hit 12.3% in Q1 2025, the highest in 14 YEARS. The percentage has risen even faster than during the Great Financial Crisis. Ouch.

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Global 30-Year Bond Yields from Europe to North America to Asia are screaming "EMERGENCY" - X user BarChart

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Michael Burry has sold every stock in his portfolio except for a new position in Estee Lauder, - X user The Kobeissi Letter

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Toyota has forecasted a 21% profit decline for the current financial year, per Reuters

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Bottom 60% of U.S. households cannot afford a "minimal quality of life" — Ludwig Institute for Shared Economic Prosperity (LISEP). This measures education, healthcare, child care, technology gadgets etc. Neoliberal capitalism causes huge inequality. Don’t be fooled by GDP. - X user SL Kanthan

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US household debt jumped $167 billion, to a record $18.2 TRILLION in Q1 2025. In 10 years, household debt has surged by a MASSIVE $7 TRILLION. In Q1, mortgage debt rose $199 billion to a record $12.8 trillion. As a % of GDP, household debt is ~72%. - X user Global Markets Investor

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Total Household Debt rises to a new all-time high of $18.21 trillion - BarChart

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The US government cannot afford a recession: In previous economic cycles, the US budget deficit widened by ~4% of GDP on average during recessions. This would imply a ~$1.3 trillion deterioration of US government finances if a recession hits in 2025. That said, if the US enters a recession, long-term interest rates will likely go down. A 2-percentage-point decrease in interest rates would save ~$568 billion in annual interest payments. However, this means government finances would worsen by more than DOUBLE the amount saved in interest due to a recession. An economic downturn would be incredibly costly for the US government.

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30-Year Treasury Yield jumps to 4.94%, sitting near the highest levels of the last 18 years - BarChart

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With the latest tariff updates, we can expect there to be an increase in shipping costs and possible delays with a surge of orders. Let us plan for both "Just in time" and "Just in case" scenarios.

Bank of America, Wells Fargo and Citigroup Set Aside $34.86 billion for Credit Losses Amid Rising Macro Uncertainty - DailyHodl

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My Investing Muse (19May25)

Layoffs & Closure news

• HSBC targets 10% workforce cut in global restructuring strategy - People Matters

• Luxury is on life support. Burberry is cutting 1,700 jobs. They showed Akeroyd the door last summer, and begged Schulman to hawk trench coats & scarves again, But who’s really splurging on scarves? Affirm wants to know - X user Amanda Goodall

• MICROSOFT TO LAYOFF ~7,000 EMPLOYEES. Microsoft is cutting 3% of its workforce. - X user Gurgavin

• Japanese carmaker Nissan has said it will cut another 11,000 jobs globally and shut seven factories as it shakes up the business in the face of weak sales. Falling sales in China and heavy discounting in the US have taken a heavy toll on earnings, while a proposed merger with Honda and Mitsubishi collapsed in February. - BBC

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246 US large companies have gone bankrupt year-to-date, the most in 15 years. This is up from 206 recorded last year and more than DOUBLE during the same period in 2022. In April alone, the US saw 59 bankruptcy filings as tariffs ramped up. So far this year, the industrials sector has seen 41 bankruptcies, followed by 31 in consumer discretionary, and 17 in healthcare. According to S&P Global, consumer discretionary companies have been hit the hardest due to market volatility, tariffs, and inflation uncertainty. We expect a surge in bankruptcies in 2025. - X user The Kobeissi Letter

Downgrade of the USA

Here is some news about Moody’s downgrade of the US credit rating:

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Moody's just downgraded the United States' credit rating for the FIRST time in history. The reason: An unsustainable path for US federal debt and its resulting interest burden. Moody's notes that the US Debt-to-GDP ratio is on track to hit 134% by 2035. Federal interest payments are set to equal ~30% of revenue by 2035, up from ~18% in 2024 and ~9% in 2021. Furthermore, deficit spending is now at World War 2 levels as a percentage of GDP. The US debt crisis is our biggest issue, with the least attention. - X user The Kobeissi Letter

Moody's downgrade US credit rating from AAA to AA1. Institutions rushed to sell $SPY a couple minutes before the downgrade. $2b sold at highs before news came out.This is a huge deal. Investment funds have minimum ratings they have to keep to to maintain their risk profile. pensions for example often have to keep to AAA rated bonds for say 85% of their investments. this will trigger a huge sell off and will result in less future investment, hence higher yields and higher borrowing costs.

Will there be a selling off of US assets following this credit downgrade? We know more when the market opens in the coming week.

My final thoughts

The US/China tariff has reached a temporary status. While it is inflationary in outcome, there is at least stability in this 90-day window. We are expecting more deals to be announced in the coming days. This will bring some stability to the market.

There are good developments as Trump secured huge investments from the Middle East. This has sparked a rally in the stock market as optimism returned. Technical indicators are pointing to a continuous rally in the coming days. In the mix of good and bad news, will the bulls emerge victorious?

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

$S&P 500(.SPX)$

$Snowflake(SNOW)$