1. Before the US stock market on May 22 (Wednesday), futures for the three major US stock indexes had mixed ups and downs. As of press release, Dow futures were down 0.12%, S&P 500 futures were down 0.09%, and NASDAQ futures were up 0.04%.

2. As of press release, the German DAX index fell 0.29%, the UK FTSE 100 index fell 0.40%, the French CAC40 index fell 0.63%, and the European Stoxx 50 index fell 0.28%.

3. As of press release, WTI crude oil fell 0.58% to $78.20 per barrel. Brent crude oil fell 0.53% to $82.44 per barrel.

Market news

Wall Street is bullish on US stocks and is already mainstream! Big Ma “idles a lot”, and Little Ma becomes “the remaining empty”. After Michael Wilson, one of Wall Street's well-known bears and stock strategist at Morgan Stanley, “confesses defeat,” his colleague Andrew Slimmon, believes that the US stock market will break through an all-time high because large amounts of cash have not yet entered the market indicate that investors are “afraid” about part of the cycle, and the subsequent “FOMO” sentiment will drive the influx of hot money. Wilson raised the target level of the S&P 500 index for the next 12 months — the S&P 500 index is expected to rise 2% by June 2025, and previously thought the index would fall 15%. For other investment banks, the mainstream view is still bullish on US stocks. For example, Bank of America and Wells Fargo's peers expect the S&P 500 index to rise further to 5,400 points and 5535 points, respectively, by the end of the year.

Federal Reserve officials reiterated that we need to see more evidence of falling inflation before cutting interest rates. Two Federal Reserve officials have reiterated that interest rates will remain high for a longer period of time, stressing the need to be patient as the Federal Reserve waits for more evidence that inflation is falling. Cleveland Federal Reserve Chairman Loretta Mester said at a symposium hosted by Atlanta Federal Reserve Chairman Raphael Bostic on Tuesday that she hopes to see “several months of inflation data seem to be declining” before cutting interest rates. Boston Federal Reserve Chairman Susan Collins also attended the Atlanta Federal Reserve Financial Markets Conference. She said she would like to see more evidence that price pressure is moving towards the Fed's 2% target. “I think this is a time that requires patience. I think the data is very complicated,” Collins said. “It's taking longer than I thought before.” Collins did not have the right to vote on monetary policy this year.

Goldman Sachs: The US dollar will be stronger in the fight against inflation, or will remain strong for a longer period of time. Goldman Sachs believes that if the Federal Reserve keeps interest rates stable and other countries choose to cut interest rates, the US dollar may remain strong for a longer period of time. The strategy team led by Kamakshya Trivedi (Kamakshya Trivedi) and Joseph Briggs (Joseph Briggs) wrote in a note to clients: “If the Federal Reserve remains stable, but more other jurisdictions decide to implement domestic easing rather than wait for the Federal Reserve, this policy divergence may cause the dollar to stay strong for a longer period of time.” These analysts believe that Canada, the UK, and the Eurozone will cut interest rates in June. Since this year, the exchange rate of the US dollar against all G10 countries has risen, and Bloomberg's index tracking the strengthening of the US dollar has risen by nearly 3%.

Bond traders cut their bets on the Fed's interest rate cuts, and US debt bears are back on the rise. After the US April CPI data released last Wednesday was better than expected, the market is betting that the Federal Reserve will cut interest rates by nearly 50 basis points this year. However, bond traders have once again expressed doubts about whether the Federal Reserve will cut interest rates twice as expected by the market. The swap market currently suggests that the Federal Reserve will cut interest rates by about 40 basis points by the end of this year. The first rate cut will be in November. Position conditions suggest that new short bets have been re-established as bond yields have risen in recent days. Meanwhile, long positions on US Treasury bonds have been partially cleared. Traders remain cautious and wait for more data to confirm that inflation is moving in the right direction, while waiting for the Federal Open Market Committee (FOMC) minutes of the May meeting to be released on Wednesday to provide new clues about the Federal Reserve's policy path.

Biden plans to release 1 million barrels of gasoline before US Independence Day to lower oil prices. The Biden administration will release 1 million barrels of gasoline from the northeastern US reserves to lower gas station prices before the July 4 Independence Day holiday and summer driving season. Energy Secretary Jennifer Granholm (Jennifer Granholm) said in a statement on Tuesday: “By strategically releasing this reserve between Memorial Day and July 4, we will ensure sufficient supply flows to the three states (regions) and the Northeast when people need it most.” Gasoline futures have risen 19% this year due to production cuts by the Organization of Petroleum Exporting Countries (OPEC) and fears that the Israeli-Hamas war will trigger a wider Middle East conflict, leading to supply disruptions and rising oil prices. The rise in energy prices sparked speculation in April that the Biden administration might use the strategic oil reserves of Texas and Louisiana before the November presidential election.

Individual stock news

Vipshop (VIPS.US) Q1 net profit increased 24.6% year over year, and GMV increased 8.0% year over year. Vipshop's total net revenue for Q1 was 27.6 billion yuan, up 0.4% year on year, falling short of market expectations; net profit attributable to the company's shareholders was 2.3 billion yuan, up 24.6% year on year; after dilution, revenue per ADS was 4.18 yuan, compared to 3.16 yuan for the same period last year. Non-GAAP net profit attributable to the company's shareholders was 2.6 billion yuan, up 24.8% year on year. After dilution, revenue per ADS was 4.66 yuan, compared to 3.52 yuan in the same period last year, exceeding market expectations. GMV increased 8.0% year over year in the first quarter, rising from 48.5 billion yuan in the same period last year to 52.4 billion yuan. Gross profit increased 10.9% year-on-year, to 6.5 billion yuan from 5.9 billion yuan in the same period last year. The number of active customers was 43.1 million, compared to 43.7 million in the same period last year. The total order volume was 178.5 million, compared to 184.4 million in the same period last year. Looking ahead to the second quarter, Vipshop expects its total net revenue to be between 26.5 billion yuan and 27.9 billion yuan, a year-on-year decrease of about 5% to 0%.

Yixian E-commerce (YSG.US) released a quarterly report: revenue of 773 million yuan, achieving both cosmetic and skincare growth. Yixian e-commerce achieved revenue growth of 773 million yuan in the first quarter, in line with the company's previous revenue guidelines and continued its growth trajectory. Among them, the skincare business maintained healthy and sustainable growth, achieving revenue of 245 million yuan in the first quarter of 2024, accounting for 31.7% of total revenue. Up to now, the skincare business has accounted for more than 30% of revenue for 8 consecutive quarters, and the revenue structure continues to be optimized. Furthermore, the makeup business continued to enrich its product layout, and revenue increased by 3.2% over the same period last year, returning to a value growth trajectory. Benefiting from the deepening of strategic transformation, the company's hematopoietic capacity continues to improve. The gross margin for the first quarter reached 77.7%, an increase of 3.4 percentage points over the previous year. During the reporting period, Yixian E-commerce continued to increase investment in R&D to consolidate R&D innovation.

Pinduoduo (PDD.US) financial report for the new quarter: The business is still growing and will invest more to deepen high-quality development. Pinduoduo Group achieved revenue of 86.8 billion yuan in the first quarter, an increase of 131% over the previous year. 2024 is an important year for Pinduoduo Group to continue deepening its high-quality development strategy. It is also a “consumption promotion year” determined by the Ministry of Commerce. Pinduoduo responded positively. In the first quarter, during festivals such as the Spring Festival, it launched a series of measures to help businesses and benefit the people. While guiding high-quality consumption, it collaborated with quality merchants to focus on the “Chinese fashion brand” theme to enrich high-quality supply, improve a high-quality ecosystem, and drive steady growth in performance through policies and activities.

Target (TGT.US)'s profit for the first quarter fell short of expectations, and its stock price fell. Target shares fell 7.7% in pre-market trading this Wednesday, hitting a three-month low. The decline stemmed from the first-quarter earnings report published by the well-known discount retailer, which showed that profits fell short of market expectations, mainly due to weak sales performance of non-essential goods. According to financial reports, Target's net revenue for the first quarter declined slightly from US$950 million or US$2.05 per share in the same period last year to US$942 million, which is equivalent to US$2.03 per share. This figure fell short of FactSet's earnings estimate of $2.06 per share. Additionally, the company's total revenue fell 3.1% year over year to $24.53 billion, although slightly higher than FactSet's consensus of $24.52 billion. Same-store sales also fell 3.7%, in line with expectations. Despite the challenges, Target's gross margin actually increased, from 26.3% to 27.7%.

Nvidia's (NVDA.US) performance isn't just about technology stock trends! This year's “booming” electricity stocks are also at stake. Nvidia, the AI chip giant named “Earth's Most Important Stock” by Wall Street firm Goldman Sachs, will announce the company's performance data for the first fiscal quarter of fiscal year 2025 and the performance outlook for the next fiscal quarter in the early hours of Thursday morning Beijing time, and hold a performance conference call at around 5 a.m. Nvidia's earnings report unquestionably relates to the belief of global technology stock investors in AI. Its financial data and performance prospects for the next fiscal quarter directly determine the stock price momentum of global technology stocks in at least the short to medium term. However, it is worth noting that this time, the investors behind power stocks and renewable energy stocks, which have soared this year, are also fully focused on Nvidia's earnings report. Analysts generally expect Nvidia's total revenue for the first fiscal quarter to be about 24.6 billion US dollars, an increase of more than 240% year over year; earnings per share increased 418% year over year to 5.60 US dollars.

Key economic data and event forecasts

22:00 Beijing time: The total annualized total number of existing home sales in the US in April (10,000 households).

22:30 Beijing time: US EIA natural gas inventory changes for the week ending May 17 (100 million cubic feet), US EIA crude oil inventory changes for the week ending May 17 (10,000 barrels).

At 21:40 Beijing time, FOMC voting committee and Chicago Federal Reserve Chairman Goulsby delivered the opening address at an event in 2025.

The next day at 02:00 a.m. Beijing time: The Federal Reserve announced the minutes of the monetary policy meeting.

Performance Forecast

Thursday morning: Nvidia (NVDA.US), Synopsys (SNPS.US), Snowflake (SNOW.US), Sound Network (API.US)

Thursday pre-market: NetEase (NTES.US), YouDao (DAO.US), Shell (BEKE.US), BILI.US (BILI.US), Weibo (WB.US), 1 Pharmaceutical Network (YI.US)