To The Moon

Public Holidays

There are no public holidays in China and Singapore.

America is closed on 26May25 as they celebrate Memorial Day.

Hong Kong is closed on 31May25 as they celebrate Tuen Ng Day (also known as Dragonboat Festival).

Economic Calendar (26May25)

Notable Highlights (some are taken from Grok)

• Fed Chair Powell’s remarks could provide insights into monetary policy, potentially influencing markets depending on his stance on interest rates and inflation.

• Previous Durable Goods Orders (Apr) were at 7.5% (month-over-month). No forecast is provided, but a strong reading could signal robust economic activity, while a decline might raise concerns.

• CB Consumer Confidence (May) is forecasted at 88.0, up from 86.0. A drop in consumer confidence could indicate weaker consumer spending, a key driver of economic growth.

• GDP (Q2Q) (Q1) is forecasted at -0.3%, unchanged from the previous reading. This confirms a contraction in economic growth, which could pressure markets if the actual figure worsens.

• Core PCE Price Year-over-Year: Previous was 2.6%. No forecast, but a rise could signal persistent inflationary pressure.

• Previous Chicago PMI (May) was 44.6 (below 50 indicates contraction). Another weak reading could highlight ongoing manufacturing challenges.

• Previous Manufacturing PMI (May) (China) was 49.0 (below 50 indicates contraction). A further decline could signal weakness in China’s manufacturing sector, impacting global markets.

• Initial jobless claims will be announced. Previous Initial Jobless Claims was 227K. No forecast provided, but a rise could signal labor market weakness, while a drop might indicate resilience. 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 could see market volatility, particularly around Fed-related events and inflation data.

Earnings Calendar (26May25)

The interesting earnings this week include Nvidia, Salesforce, Costco, C3 AI, Best Buy and Dell.

Let us look at Nvidia.

The stock price grew 23% from a year ago. Technical Analysis recommends a “Strong Buy" rating. The Analysts’ sentiment recommends a “Strong Buy” rating too. The target price is $162.77 suggests an upside of 23.98%.

Performance of Nvidia (some from Grok)

Revenue

• Growth Trend: NVIDIA's revenue has shown explosive growth, increasing from $5.01 billion in 2016 to $130.497 billion in 2025. There is exceptional growth with 39.5% 10-Year CAGR.

• Competitive Advantage: NVIDIA’s remarkable revenue growth underscores its leadership in the GPU and AI markets, capitalising on the global AI boom, gaming trends, and data centre expansion, positioning it as a key player in the tech industry.

Operating Profit

• Growth Trend: Operating profit has grown dramatically from $878 million in 2016 to $81.453 billion in 2025. The operating margin has expanded significantly, from 17.5% in 2016 to 62.4% in 2025.

• Competitive Advantage: NVIDIA’s high and expanding operating margin highlights its ability to scale efficiently while maintaining pricing power, driven by its technological leadership in GPUs and AI chips.

Earnings Per Share (EPS)

• Growth Trend: EPS has surged from $0.03 in 2016 to $2.94 in 2025, with a 10-year CAGR of 59.3%.

• Competitive Advantage: The exceptional EPS growth demonstrates NVIDIA’s ability to deliver significant shareholder value, supported by its dominance in high-growth markets like AI and gaming.

Price-to-Earnings (P/E) Ratio

• Valuation: The P/E ratio is 44.4, indicating a premium valuation, which is justified given NVIDIA’s high growth and market leadership in AI and semiconductors.

• 10-Year Median Returns: The 10-year median return on assets (ROA) is 23.0%, return on equity (ROE) is 38.7%, and return on invested capital (ROIC) is 27.0%, reflecting excellent returns.

• Competitive Advantage: The high P/E ratio, combined with strong ROA and ROE, reflects NVIDIA’s ability to generate significant value, supported by its innovation and market dominance.

Free Cash Flow (FCF)

• Growth Trend: The EV/FCF ratio is 52.7, indicating a high valuation relative to free cash flow, but the 10-year CAGR for FCF is 54.1%, showing robust cash flow growth. The 10-year median FCF margin is 29.1%.

For the coming earnings, the EPS and revenue forecast are $0.0893 and $43.12B, respectively.

While Nvidia is one of the most exciting businesses, we should invest in the business at a price with a good margin of safety. I have done up price targets (with application of different margins of safety) using various valuation models. I am looking at a target per-share price of about $70.

For now, I prefer to remain a spectator instead of an investor.

Market Outlook of S&P500 - 26May25

Technical observations:

• MACD - a top crossover should be completed soon, and this suggests a potential downtrend is coming.

• Exponential Moving Averages (EMA) lines are showing an uptrend. However, the 3 lines are converging, and a trend reversal is coming.

• Both the 50 MA line and the 200 MA line are showing an uptrend.

• Chaikin Money Flow (CMF) shows more buying than selling momentum.

The daily interval is showing a “Strong Buy" for the S&P 500 index.

From 20 technical indicators, there are 14 indicators showing a “Buy” rating and 6 indicators showing a “Sell” rating.

Short-Term Outlook: Bullish

• The Morning Doji Star and Morning Star (both emerging as of May 23) are strong bullish reversal patterns, suggesting that the current pullback may be nearing its end. These patterns indicate a potential resumption of the uptrend.

• The Bullish Doji Star (daily, May 22) further supports a short-term bounce, aligning with the idea that the recent decline is a correction within a broader bullish trend.

• The prior technical analysis (May 23) showed the price above the 200-period MA with a positive MACD and CMF, reinforcing the bullish short-term outlook despite the pullback.

Long-Term Outlook: Bullish

• The S&P 500’s recovery, combined with its ability to hold above the 200-period MA, suggests the longer-term trend has shifted to bullish, as noted in prior analyses.

• The bearish patterns from early 2025 (e.g., Three Black Crows, Three Outside Down) accurately predicted the correction, but their influence has faded as bullish patterns (e.g., Bullish Doji Star, Three Outside Up) have dominated since April 2025.

• The emerging Morning Doji Star and Morning Star patterns further support the continuation of the longer-term uptrend, provided the price holds above key support levels.

Given the above, an uptrend is expected and a reversal is on the cards too.

News and my thoughts from last week (26May25)

"Companies are cracking down on remote work to get employees to quit," per BI

It is not wrong to question everything. Take all things with a pinch of salt.

Nearly 75% of all restaurant traffic is now drive-thru or takeout orders, per the National Restaurant Association

On Wednesday, the Treasury Department found that there was tepid demand for an auction for $20 billion worth of bonds, and ended up paying a slightly higher interest rate (or yield) than expected. - NPR

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Legendary investor Jim Rogers exits global equities, hoards cash and precious metals due to mounting debt crisis - DimSum Daily

Michael Burry says: "The biggest financial crisis we've seen since 2008 will hit Wall Street next year, that’s why i sold 99% of my stocks"

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Strong surge in truckload spot rates - Sonar

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Institutional investors remain bearish on US stocks: A net 38% of institutional investors were underweight US equities in early May, the lowest since May 2023, according to BofA. Outside of 2023, this marks the lowest allocation since the lead-up to 2008. Over the last 5 months, this percentage has fallen by ~70 points, the biggest drop on record. The difference between the proportion of investors being overweight Eurozone versus US equities hit a net ~75%, the highest since October 2017. By comparison, 4 months ago, the net percentage was -62 points, the lowest since 2012. The sentiment shift among professional investors has been historic. - X user The Kobeissi Letter

The head of the busiest U.S. port does not expect imports to soar after last week's tariff truce between Washington and Beijing that temporarily lowered the duty to 30% from 145%. - Reuters

JP Morgan Chase, Bank of America and Wells Fargo left the top triple-A rating club over America's burgeoning $36 trillion debt. - Yahoo Finance

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Serious Delinquencies (Unpaid Balances of at least 90 days) are rising across the board, including Mortgages, Home Equity Credit Lines, Auto Loans, Credit Cards, and Student Loans - BarChart

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The more you pay for interest, the less you have for the country - defense, education, infrastructure, healthcare, energy, social security & more. Can America chart a different trajectory?

Treasury Secretary Bessent says, "we are going to grow the GDP faster than the debt growth and that will stabilise the debt-to-GDP." - CNN

My Investing Muse (26May25)

Layoffs & Closure news

• Walmart is slashing about 1,500 US jobs as part of a restructuring plan to cut expenses and simplify operations following its recent price hikes. - Daily Mail UK

• Booz Allen will cut 7% of its workforce, 2,500 employees, per Bloomberg

• Walgreens, which operates about 8,600 stores, in 2024 said it would close 1,200 underperforming stores over a three-year period, with 500 closings planned in fiscal year 2025, as part of its out-of-court restructuring plan. - The Street

The above are some news items about layoffs and closures. As tariffs negotiation drags on, the collateral to businesses (especially smaller ones) can compound.

Okun's Law: This empirical relationship suggests an inverse correlation between unemployment and GDP. When GDP grows, unemployment tends to fall as businesses hire more workers to meet increased demand. Conversely, when GDP declines, unemployment rises due to reduced economic activity and layoffs. Specifically, a 1% decrease in unemployment is typically associated with about a 2-3% increase in GDP, though the exact ratio varies by economy and time period.

Is population the next immediate crisis?

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Population collapse is a massive crisis - Elon Musk

Some have argued that the population is a closer and more urgent crisis than climate change. The drop in population puts more financial pressure on the working class to fund the country’s growth and development. With fewer working citizens, there could be less spending power, affecting GDP and the overall quality of life.

My final thoughts

International relationships continue to strain under the banner of tariffs. Europe and Apple have been hit by tariffs that attempt to “drive” manufacturing back to America.

Once we can navigate through the challenges in the supply chain, resources, equipment maintenance, infrastructure, policy, skilled labour, energy and more, we can consider relocating the business to America. How long will it take to build? What policy may change when President Trump’s term ends in 3.5 years? Without certainty and reliability, this can add to the complexity of setting new manufacturing capacity.

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

$NVIDIA(NVDA)$

$S&P 500(.SPX)$