Preview of week starting 30May2022

Another week awaits us.  The US opens on Tuesday as they celebrate Memorial Day on 30 May 2022 (Monday).  In Asia, Hong Kong & China will also have a short week as they close on 03 June 2022 for the Dragon Boat Festival.

Holidays

30 May 2022 - US "Memorial Day"

03 Jun 2022 - Hong Kong & China "Dragon Boat Festival"

News Recap of the previous week

Baidu continues to blaze a trail in Robotaxi in China with Apollo Go providing 196,000 rides in Q1/2022 (up 11,000% year on year).  They have arrived in Wuhan following successful launches in Beijing, Guangzhou, Shanghai and Shenzhen.

Burry's view on market crash and fake rallies

Michael J. Burry has shared his views about the market crashes and "fake" rallies.

Market ended in extreme fear with the ending of week 22 May 2022

From the Fear & Greed index, the sentiment of "extreme fear" remains in the market.  This is likely to continue in the coming week.  Hopefully, we can find some relief in some good news and earnings.

Economic Calendar

Economic Calendar for the week starting 30 May 2022

The world's factory in China will be sharing their manufacturing PMI.  This is likely to be affected by the lockdown experienced in several cities including Beijing and Shanghai.  The crude oil inventories will also provide a forecast of the consumption of the economy.  A prolonged decline can spell bad news for the US economy.

In the US, they will also be updating their manufacturing PMI.  Consumer confidence is also important as the US is essentially a consumption-driven economy.  This needs to remain strong so that the recovery can continue to gather momentum.  There are also several updates pertaining to unemployment (including JOLT job openings, unemployment rate and initial jobless claims).  The Federal Reserve will need to guide its market to steer clear of inflation and unemployment.  With their plans to sell their assets (treasury and mortgage-based securities) and interest rate hikes, these will be vital data as they decide on their moves on interest rates.

Earnings Calendar

Earnings for week 30 May 2022

In the coming week, there will be a few interesting earnings:

Gamestop, one of the darlings of the short squeeze will be sharing its earnings this week. After the apes destroyed Melvin Capital, they must be looking forward to the coming earnings.  This is an important victory where Main Street took on Wall Street to beat them in the game.  Will this change the investment landscape?  Who will be the next victim to fall following the onslaught of the apes?

Salesforce is an American cloud-based software company headquartered in San Francisco, California. It provides customer relationship management software and applications focused on sales, customer service, marketing automation, analytics, and application development.

UiPath is a global software company that makes robotic process automation software. It was founded in Bucharest, Romania, by Daniel Dines and Marius Tîrcă. Its headquarters are in New York City.

HP is a technology company born of the belief that companies should do more than just make a profit. They should make the world a better place.  Their efforts in climate action, human rights, and digital equity prove that they are doing everything in their power to make it so.  For over 80 years, their technology – a product and service portfolio of personal systems, printers, and 3D printing solutions – was created to inspire this meaningful progress.

Market Outlook

1D chart of S&P500

S&P500 has been climbing from its recent decline from the support zone around 3900.  Will this be the reversal that the market is looking for?  Will this rally continue into the coming week?  From both stochastic and MACD indicators, the chart looks to be on its steady climb up from its recent lows.  The EMA lines (8, 13 & 20) look to be converging, which is another sign of reversal.  Given the current projectile, the confirmation of the reversal from the EMA should take place this week, bearing any bad news.

Now, the news of a food crisis is popping up with different countries revealing various shortages.  With the economic calendar revealing news about PMI (production) and unemployment, these will be vital data points to help the Federal Reserve decide their next course of action pertaining to their asset sales and interest rate hike.

Michael Burry has warned of fake rallies.  Looking at the 1W charts, the market is still on a downward trend.  Thus, it could be wise to trade with prudence though several stocks appear to be at "attractive" price points.  Personally, I would prefer to observe for a while more, monitoring key support and resistance zones for the markets and various stocks.