To The Moon

Public Holidays

Singapore and Hong Kong are closed on 1st May to celebrate Labour Day. China is closed on 1st & 2nd May as they celebrate Labour Day.

America does not have any public holidays in the coming week.

Economic Calendar (28Apr25)

Notable Highlights

• Core PCE Price Index (Mar) forecast shows inflation cooling, with YoY at 2.9% (down from 3.4%) and MoM at 0.19% (down from 0.44%), suggesting easing inflationary pressures. This should be the most watched economic data that has implications for the interest rate.

• CB Consumer Confidence (Apr) forecast at 88.5 (below the last reading of 92.9) indicates weaker consumer sentiment, which could signal reduced spending and economic slowdown.

• GDP (QoQ, Q1) forecast at 0.4% (well below the previous 2.4%) signals a significant slowdown in U.S. economic growth.

• S&P Global Manufacturing PMI (Apr) forecast at 50.7 (up from 50.2) and ISM Manufacturing PMI (Apr) forecast at 47.9 (up from 40.0) show mixed signals, with S&P indicating slight expansion and ISM still in contraction. ISM Manufacturing Prices (Apr) forecast at 69.4 (up significantly) points to rising input costs, which could fuel inflationary pressures in the manufacturing sector. Manufacturing PMI (Apr) forecast at 50.5 shows Chinese manufacturing activity having modest growth. Chicago PMI (Apr) forecast at 47.8 (down from 50.5) indicates contraction in regional manufacturing activity.

• JOLTS Job Openings (Mar) forecast at 7.568M (below the previous 7.598M) suggests a slight cooling in labour demand, potentially reflecting a softening job market. Nonfarm Payrolls (Apr) forecast at 130K (down sharply from 228K) and Unemployment Rate (Apr) steady at 4.2% suggest a weakening U.S. labor market, with slower job growth but no immediate spike in unemployment. ADP Nonfarm Employment Change (Apr) forecast at 155K (down from 198K) suggests slower private-sector hiring in the U.S.

• Average Hourly Earnings (MoM, Apr) forecast holds steady at 0.3% indicating stable wage growth, which may not add significant inflationary pressure.

• Initial jobless claims will be announced. 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 indicator of oil supply and demand, which can impact oil prices and energy markets. If the trend of excess inventories continues, demand erosion can lead to reduced production & weakened consumer spending.

Earnings Calendar (28Apr25)

Some interesting earnings include Apple, Amazon, Airbnb, Microsoft, ExxonMobil, Chevron, DuPont, PayPal, Coca-Cola, Visa, Meta, UPS, and Baxter.

Let us look at UPS

The UPS stock price has been falling for over 1 year. Technical Analysis recommends a “Neutral” rating. The analysts’ sentiment recommends a “Buy” rating. The target price of $123.69 implies an upside of over 26%.

Revenue

• Growth Trend: UPS's revenue has grown from $58.363 billion in 2015 to $91.070 billion in 2024. The 10-year compound annual growth rate (CAGR) for revenue is 4.6%, indicating steady growth.

• Key Milestones: Revenue growth was strong in 2020 (14.2%) and 2021 (15.0%), driven by e-commerce demand during the pandemic. However, there was a decline of -9.3% in 2023, followed by a modest 0.1% increase in 2024, reflecting a slowdown in demand.

• Competitive Advantage: UPS’s consistent revenue growth highlights its strong position in the logistics and delivery sector, benefiting from its extensive global network and leadership in e-commerce shipping.

Operating Profit

• Growth Trend: Operating profit fluctuated, growing from $7.668 billion in 2015 to $8.46 billion in 2024, with a peak of $12.81 billion in 2021. The operating margin declined from 13.1% in 2015 to 10.0% in 2024.

• Competitive Advantage: Despite margin compression, UPS’s ability to maintain operating profits reflects its operational scale and efficiency, bolstered by its integrated air and ground delivery network.

Earnings Per Share (EPS)

• Growth Trend: EPS grew from $5.35 in 2015 to $6.75 in 2024, with a 10-year CAGR of 7.5%.

• Volatility: EPS growth was inconsistent, with significant drops in 2016 (-27.9%) and 2023, reflecting sensitivity to economic cycles and operational challenges.

• Competitive Advantage: The long-term EPS growth demonstrates UPS’s ability to generate shareholder value, supported by its strong market position, though recent declines highlight challenges in maintaining profitability.

Price-to-Earnings (P/E) Ratio

• Valuation: The P/E ratio is 14.5, suggesting UPS is reasonably valued relative to its earnings, aligning with its stable but slower growth profile.

• 10-Year Median Returns: The 10-year median return on assets (ROA) is 9.7%, return on equity (ROE) is 157.1%, and return on invested capital (ROIC) is 15.9%, indicating solid historical returns.

• Competitive Advantage: The moderate P/E ratio and strong ROE reflect UPS’s efficient use of capital and stable valuation, supported by its established role in logistics.

Free Cash Flow (FCF)

• Growth Trend: The EV/FCF ratio is 15.6, and the 10-year CAGR for FCF is 6.1%, indicating healthy cash flow growth. The 10-year median FCF margin is 6.4%, showing consistent cash generation.

• Capital Structure: The median debt/equity ratio is 5.9, and debt/assets is 0.4, reflecting a leveraged but manageable balance sheet.

• Competitive Advantage: Strong FCF growth supports UPS’s ability to fund dividends, invest in infrastructure, and manage debt, reinforcing its competitive position in logistics.

The EPS and revenue forecast for UPS are 1.44 and $ 21.22 B. Although UPS is attractive, the recent revenue decline is a concern. With a low P/E ratio and profitability, it can be worth monitoring. I prefer to be a spectator and not an investor for now.

Market Outlook of S&P500 - 28Apr25

Observations:

• The MACD indicator has completed the bottom cross-over that suggests an uptrend.

• Moving Averages (MA). The MA50 line has started a downtrend, while the MA200 line is on an uptrend. The MA200 line may tilt into a downtrend soon. This implies a downtrend in the mid-term and a bullish trend in the long term. A death cross has surfaced when the MA50 line cuts the MA200 line from above. A death cross can be seen as a bearish indicator.

• Candle. The last candle is below the MA50 and MA200 lines, implying a bearish outlook for the medium and long term.

• The three Exponential Moving Averages (EMA) lines are showing a downtrend. However, the lines are starting to converge, and a reversal should be confirmed soon.

• Chaikin’s Monetary Flow (CMF) is in the “uptrend zone” (above the 0 line) even though the trend seems to be ranging. This implies more buying than selling.

• Let us monitor the magnitude of the rise and fall alongside the volume.

Using the daily interval, the technical indicators and moving averages point to a “Buy” rating. There are 13 indicators with a “Buy” rating and 7 with a “Sell” rating.

Let us look at candlestick patterns.

The latest candle “Bullish doji star”, is bullish. There are still a considerable number of “bearish” candles recently. Let us exercise caution.

Given the above indicators and candlestick patterns, the S&P 500 points to a more “bullish” outlook.

News and my thoughts from last week (28Apr25)

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This is stunning: 44% of Americans now believe they will be WORSE OFF financially in a year (mainly due to tariffs). We've never seen anything like this before. Not even during the Great Recession or the stagflation era (31% thought they would be worse off in a year in April 1980). (Source: Data from the University of Michigan Survey of Consumers) - X user Heather Long

Elon Musk: "The biggest mistake I made is to put too much of a weighting on somebody's talent and not much on their personality; it actually matters whether somebody has a good heart."

Interesting study on whether vaccines cause autism. Looking forward to is findings.

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The cumulative inflation from 2020 is 23.6%. Has income growth caught up?

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Import volumes will start drying up in the first week of May. Companies tied to imports: port operators, truckers, warehouses, forwarders, and railroads will all struggle. Layoffs the following week. POTUS needs to declare victory by mid-next week, or we will be looking at a doomsday scenario for West Coast supply chain workers. The logistics industry employs 8 million people in the US. - X user Craig Fuller

EUROPEAN PARLIAMENT IN ‘FINAL STAGES’ OF TALKS WITH CHINA TO REMOVE SANCTIONS - SCMP

HEDGE FUNDS TO UKRAINE: TIME TO PAY UP Ukraine owes $3.2 billion to a group of hedge funds, and talks just collapsed over a $500M payment due next month, with no deal in sight to kick the can down the road. The debt is tied to how fast Ukraine’s economy grows. If it grows more than 3%, investors cash in. That happened barely last year after a 30% crash during the war. Ukraine wants to swap the deal for regular bonds. The funds, led by Aurelius and VR Capital, basically said: Cool, but we still want $400M in cash and new bonds for the rest. Kyiv’s argument? These contracts were made in peacetime. Hedge funds’ reply? Not our problem. Source: Bloomberg

My greater concern is the loss of lives due to some critical products. This can turn bad. Will the business be willing to put people over profits to air freight some of these?

Is Social media socialising?

GOOGLE IS ASKING SOME OF ITS EMPLOYEES TO COME TO THE OFFICE AT LEAST 3 DAYS A WEEK OR LOSE THEIR JOB PER CNBC

It is not about setting tariffs. It is about getting China to the table. If they ignore the USA, all changes would be irrelevant.

BREAKING: China made 5nm chips without EUV. Let that sink in. No ASML. No Nikon. Just brute-force DUV, clever engineering, and sheer industrial will. Moore’s Law didn’t die. It moved to Shanghai.

Chinese data centres refurbing and selling Nvidia RTX 4090D GPUs due to overcapacity — 48GB models sell for up to $5,500. China’s AI rush is leading to billions of dollars in idle infrastructure. The report states that an AI data centre requires a utilisation rate of more than 70% to 75% for it to turn a profit. However, activation rates remain below 20%, meaning a significant amount of capacity is left unused and many GPUs remain idle. - Tom’s Hardware

This can suspend most CAPEX investments till some certainty is established. What the market dislikes is uncertainty.

European Parliament in ‘final stages’ of talks with China to remove sanctions.

Daily ocean container bookings from China to the United States have plummeted by 20% compared to the same period last year. For trucking companies that have long depended on the steady flow of goods from the Port of Los Angeles, this downturn spells trouble. - FreightWaves

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Retail investors' market sentiment is FAR from depressing: A RECORD 279,000 new accounts were added on Interactive Brokers in Q1 2025. Options contract volumes were up 25% year-over-year, futures volumes up 16%, and stock share volumes up 47%. - Finchat.IO

U.S. TO CHINA-BUILT SHIPS: PAY UP—$5.2M PER PORT CALL OR SAIL ELSEWHERE. That oil supertanker made in China? It’ll now cost up to $5.2 million just to drop anchor at a U.S. port. The U.S. is replacing flat port-entry fees with charges based on a ship’s size—bad news for giant tankers, great news (maybe) for American shipyards. U.S. Trade Representative Jamieson Greer: “Ships and shipping are vital to American economic security and the free flow of commerce. The Trump administration’s actions will begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships.” Oil traders are already swerving Chinese-built tankers like they’ve got barnacles—nobody wants a $5 million pit stop. Source: ZeroHedge

The entire COVID-19 crash of 2020 lasted 1 month and 3 days and wiped $7 trillion from the US Market. $6.5 trillion was wiped from the market this year in April over 2 days alone. The entire world shut down in 2020. The market right now believes the Tariff War is far worse.

China has stopped all liquefied natural gas imports from the U.S.

My Investing Muse (28Apr25)

Layoffs, Delinquency & Closure news

• High-end apparel chain Ted Baker Canada, which operated 31 Ted Baker stores in the U.S. and 25 in Canada, along with eight Brooks Brothers Canada shops, and seven Lucky Brand Canada stores, a year later in April 2024 filed to restructure under Canada's Companies' Creditors Arrangement Act and for Chapter 15 bankruptcy to liquidate and close all of the North American stores. Luxury fashion retailer McMullen on Aug. 21, 2024, filed for Chapter 11 protection in the Northern District of California, reportedly facing a lawsuit filed by online competitor Moda Operandi over alleged copyright infringement. - The Street

• And sometimes, unfortunately, times just get too tough for some businesses to survive. Such is the case in Oxford Junction, Iowa. Its very last remaining grocery store, Coon's Corner, is finally closing its doors. The store had been open for over 150 years. - TT News

• The Federal Deposit Insurance Corporation to cut 20% of its staff, per Reuters.

• The manufacturing layoffs are starting to happen from the tariffs. Volvo is laying off several hundred workers in Pennsylvania, and Mack Trucks is laying off at its Maryland plant. X user - Heather Long

• May 5th, federal student loan collections resume. Let's break it down. Over 5 million borrowers are already in default - 5M ya'll!!! 4 million more are in late-stage delinquency. Nearly 10 million could be in default within months. That’s 25% of the federal loan portfolio at risk. Only 38% of borrowers are current. Everyone else is delinquent, paused, or stuck in limbo... and they were more than clear in that PR that the Department is done waiting. X user Amanda Goodall

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Housing defaults have skyrocketed. This is unlike anything we’ve seen in a decade - X user Bravos Research

US bankruptcies are SKYROCKETING: US weekly bankruptcy filings 4-week average jumped to 7, the most since the 2020 Crisis. Outside of 2020, this is the highest level since the Financial Crisis. Companies with more than $50 million in liabilities

US bankruptcies are rising as if there is a CRISIS: 188 US large companies declared bankruptcy in Q1 2025, the most in 15 YEARS. This is up 35% from 139 recorded in Q1 2024. In 2024, big bankruptcies hit 694, the most in 14 YEARS. - X user Global Markets Investor

The above are some of the layoff and closure news. Let us monitor this, as this can lead to market-wide concerns.

The Trade and Tariffs War

Here is some news about the trade and tariffs war:

• China asks South Korea not to export products using rare earths to US defence firms - Reuters

• India to impose 12% tariff on steel to limit cheap imports from China.

• Jeffrey Sachs warns India not to fall into the US trap of “containing China.” Indian host: “But maybe we want to contain China!”

• US Treasury Secretary Bessent says the tariff war with China is unsustainable, and he expects de-escalation.

• President Donald Trump’s tariffs on Chinese imports threaten to disrupt Southern California’s trade and logistics economy, a sector that moves a third of the nation’s container cargo and supports nearly 2 million jobs, according to a new analysis. 8 million people unemployed, shelves thinning, hospitals out of needles and supplies. Air plane and missile production lines start to face crunches in 3 months. And headaches ( 80% of the whole spectrum of pain killers have active ingredients from China).

• President Donald Trump’s tariffs on Chinese imports threaten to disrupt Southern California’s trade and logistics economy, a sector that moves a third of the nation’s container cargo and supports nearly 2 million jobs, according to a new analysis.

• $1.1 trillion of trade creates value for both countries. It is a willing buyer meeting a willing seller. With Tariffs, the balance is affected. There is still room for both countries to prosper together.

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The CEOs of three of the nation's biggest retailers — Walmart, Target, and Home Depot — privately warned Trump that his tariff and trade policy could disrupt supply chains, raise prices, and empty shelves - Axios. Trump was warned of empty shelves and financial turmoil from tariffs and firing Powell. His U-turn pushed stocks higher - CNN. The empty shelves can be problematic for the citizens. This can spike inflation and bring chaos. These can be avoided if we can all work together.

• Boeing CEO confirms Chinese airlines have returned new planes - X user Insider Paper

• US: We are negotiating with China and will even reach an agreement. Tariffs will be reduced soon. China: All this is fake news. The two sides have not consulted or negotiated on tariffs, let alone reached an agreement. US: We are waiting for a call from China. They will call. They are eager to reach an agreement. China: All this is fake news. This tariff war was initiated by the US. China's attitude is clear. If you want to fight, we will fight to the end. If you want to talk, the door is open. Dialogue and negotiation must be equal, respectful and reciprocal, so we will not take the initiative to call. - X user Loong of the East

U.S.-China trade tensions, driven by tariffs, are causing global ripple effects, including supply chain disruptions, economic risks, and strategic posturing. The US should experience goods and service shortage in the coming weeks. This can spike prices and some businesses can go under. Let us monitor this closely.

My final thoughts

What can be more difficult than buying the dip? Buying the dip with leverage.

There are many who have celebrated the week as market turn green. Companies from China, America and other countries can experience disruptions, delays and some of them, closures.

Without stability with tariff outcomes, companies can choose to wait it out. It is possible if American businesses has China as a minor supplier. For those who rely mostly or entirely on China, their existence is under threat. American corporations have managed to meet the Trump administration to de-escalate the tariffs tension. This privilege is not available to most businesses. This should suggest inadequate preparations before execution.

In some cases, tariffs might as well become embargo. Through my Asian lens, it is more a conflict of culture where tariff is the “weapon” of choice. I do not wish bad upon any countries. However, America runs a risk of isolation and pushing more countries towards China.

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

$S&P 500(.SPX)$

$United Parcel Service Inc(UPS)$

$Cboe Volatility Index(VIX)$