<ol>
<li>As of May 20 (Tuesday) before the US stock market opens, the three major US stock index futures are mixed. As of the time of writing, Dow futures are slightly up, S&amp;P 500 index futures are down 0.16%, and Nasdaq futures are down 0.66%.</li>
</ol>
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250520/1747741682844508.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250520/1747741682844508.png"/>
<ol>
<li>As of the time of writing, the German DAX index is up 0.61%, the UK FTSE 100 index is up 0.60%, the French CAC 40 index is up 0.56%, and the Euro Stoxx 50 index is up 0.50%.</li>
</ol>
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250520/1747741667537520.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250520/1747741667537520.png"/>
<ol>
<li>As of the time of writing, WTI crude oil is down 0.42%, priced at $61.88 per barrel. Brent crude oil is down 0.46%, priced at $65.24 per barrel.</li>
</ol>
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250520/1747741650622296.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250520/1747741650622296.png"/>
<h2>Market News</h2>
Federal Reserve's second and third in command &#34;hint&#34;: Rate cuts may not happen before September. Key officials, including Federal Reserve Vice Chairman Jefferson and New York Fed President Williams, have suggested that policymakers may not be ready to lower interest rates before September due to uncertain economic prospects. Federal Reserve's &#34;number three&#34; Williams stated on Monday: &#34;We won't be able to figure out what happened in June or July. This will be a process of collecting data, gaining a clearer understanding, and observing how things develop.&#34; The Federal Reserve's next three meetings will be held in June, July, and September. Investors currently expect less than a 10% chance of a rate cut during the next meeting on June 17-18. According to the pricing of federal funds futures, investors expect the Federal Reserve to cut rates twice by 25 basis points each by the end of the year, which is fewer than the four cuts anticipated at the end of April.
The downgrade storm continues! The &#34;government backing&#34; halo fades, Moody's downgrades deposit ratings of major US banks. Moody's has downgraded the deposit ratings of several major banks, including Bank of America (BAC.US) and JP Morgan (JPM.US), citing last Friday's downgrade of the US credit rating and the weakened support capacity of the US government for these banks. The long-term deposit ratings of Bank of America, JP Morgan, and Wells Fargo (WFC.US) subsidiaries have been downgraded by one level to Aa2, which is Moody's third-highest rating. Moody's also downgraded the senior unsecured debt ratings of some subsidiaries of Bank of America and Bank of New York Mellon (BK.US) from Aa1 to Aa2. Additionally, Moody's downgraded the long-term counterparty risk ratings of some subsidiaries of Bank of America, Bank of New York Mellon, JP Morgan, State Street Bank (STT.US), and Wells Fargo by one level to Aa2
&#34;Fiscal Frown&#34; replaces &#34;Smile Theory&#34;! Deutsche Bank warns of dollar depreciation risk. George Saravelos, Global FX Strategist at Deutsche Bank, stated that the dollar faces depreciation risks whether the U.S. falls into a fiscal crisis or an economic recession. In a report, George Saravelos pointed out, &#34;The term 'dollar fiscal frown' best describes the current situation.&#34; This statement is an interpretation of the &#34;dollar smile&#34; theory proposed by Stephen Jen over 20 years ago. George Saravelos indicated that the upcoming budget negotiations will determine the dollar's position on this curve. He stated, &#34;The extreme scenario on the left side is an overly loose fiscal stance, which would lead to declines in both U.S. Treasuries and the dollar—as we saw again this morning.&#34;
Wells Fargo supports U.S. stocks! Warns investors are overly optimistic about emerging market stocks. Wells Fargo believes that investors should reduce their holdings in emerging market stocks and instead buy U.S. stocks. The bank's investment strategist, Austin Pickle, stated in a report that although emerging economies have outperformed the S&amp;P 500 index this year, the outperformance of emerging markets is typically associated with a weakening dollar. He predicts that the dollar will strengthen and warns of risks arising from tensions in U.S.-China relations. Austin Pickle said, &#34;Market sentiment towards emerging markets has swung too optimistically.&#34; &#34;We expect a rebound in the global economy later in 2025, and many trade-related issues will eventually be resolved, which will drive up emerging market prices, but their returns will still lag behind the U.S. market.&#34;
<h2>Individual Stock News</h2>
Vodafone (VOD.US) warns that the ongoing decline in the German market will impact profits, announces a new €2 billion buyback plan. British telecom giant Vodafone released its latest earnings report on Tuesday, showing that its most critical German market has experienced a continuous decline in revenue. The company predicts that performance growth resistance in its largest market, Germany, will lead to profit growth in the new fiscal year potentially being flat or only slightly positive. The company expects its adjusted EBITDAaL for the fiscal year ending March 2026 to be between €11 billion (approximately $12.4 billion) and €11.3 billion, while the average analyst expectation compiled by Bloomberg is around €11.18 billion. The lower end of this guidance range is essentially flat compared to the previous fiscal year. The company also announced a new stock buyback plan of up to €2 billion, with the first phase of buybacks worth up to €500 million set to commence immediately.
Yalla Technology (YALA.US) Q1 revenue increased by 7% year-on-year, number of paying users decreased by 8%. Yalla Technology announced its Q1 2025 earnings. The data shows that the company's Q1 revenue was $83.9 million, a year-on-year increase of 6.5%, exceeding market expectations; net profit was $36.4 million, a year-on-year increase of 17.0%; Non-GAAP diluted earnings per share were $0.22, compared to $0.20 in the same period last year. By business segment, revenue from chat services was $53.5 million, while revenue from gaming services was $30.1 million
The average monthly active users (MAU) were 44.6 million, a year-on-year increase of 17.9%. The number of paying users was 11.8 million, a year-on-year decrease of 8.0%. Looking ahead, Yaletech expects revenue in the second quarter of 2025 to be between $76 million and $83 million.
Vipshop (VIPS.US) Q1 revenue and profit both decline, active user order volume decreases year-on-year. Vipshop's net revenue in the first quarter decreased by 4.7% year-on-year to 26.3 billion RMB (approximately $3.6 billion), and its net profit under non-GAAP decreased by 11.5% year-on-year to 2.3 billion RMB ($318.1 million), with a GAAP earnings per share of $2.57. On the operational side, the number of active customers decreased by 4.2% year-on-year to 41.3 million, and the total order volume decreased by 6.3% year-on-year to 167.2 million orders, reflecting weak consumer demand and intensified market competition pressure.
Consumer spending slows, Home Depot (HD.US) Q1 sales fall short of expectations. Home Depot (HD.US) reported that its sales in the most recent quarter fell short of expectations, indicating weakened consumer confidence and economic turmoil squeezing spending. The world's largest home improvement retailer stated that comparable sales fell by 0.3% in the three months ending May 4, a slowdown from the previous quarter. The financial report showed that Home Depot's Q1 revenue was $39.86 billion, a year-on-year increase of 9.5%, exceeding market expectations; adjusted earnings per share were $3.56, below the expected $3.59.
For the first time in nearly a year, Cathie Wood significantly increases holdings in TSMC (TSM.US), betting on AI dividends again. Renowned fund manager Cathie Wood's fund has significantly bought TSMC (TSM.US) stock for the first time in nearly a year, marking a shift in her stance—most of her funds have been continuously reducing their holdings in the chip manufacturing giant's stock since the third quarter of last year. Data from Ark Investment Management shows that Wood's flagship fund, ARK Innovation ETF, purchased 123,587 shares of TSMC American Depositary Receipts (ADR) on Monday, while the ARK Next Generation Internet ETF bought 74,189 shares. This increase in holdings comes as the world's two largest economies reach a trade truce to ease tensions. A series of AI cooperation agreements between U.S. President Trump and Saudi Arabia and the UAE also bring positive prospects for TSMC, a core supplier to Nvidia.
<h2>Important Economic Data and Event Forecasts</h2>
Beijing time 20:55: U.S. Redbook commercial retail sales year-on-year rate (%) for the week ending May 12.
The next day at Beijing time 04:30: U.S. API crude oil inventory change (10,000 barrels) for the week ending May 16.
Beijing time 21:00: 2027 FOMC voting member and Atlanta Fed President Bostic delivers opening remarks at an event.
Beijing time 21:00: 2027 FOMC voting member and Richmond Fed President Barkin delivers opening remarks at the 2025 Invest in Rural America Conference
To be determined, Google will hold its annual I/O Developer Conference.
The next day at 01:00 Beijing time: 2025 FOMC voting member and St. Louis Fed President James Bullard will speak on the economic outlook and monetary policy.
The next day at 02:30 Beijing time: NYMEX June crude oil futures will be affected by the roll-over. The last on-floor trading for May 21 will be completed at 2:30, and the last electronic trading will be completed at 5:00. Please pay attention to the expiration roll-over announcements from trading venues to control risks. In addition, some trading platforms may have an earlier expiration time for U.S. oil contracts than the NYMEX official time, so please be cautious.
<h2>Earnings Forecast</h2>
Wednesday morning: ZTO Express (ZTO.US), FinVolution (FINV.US), Tuya Smart (TUYA.US)
Wednesday pre-market: TJX Companies (TJX.US), Lowe's (LOW.US), Medtronic (MDT.US), Target (TGT.US), Baidu (BIDU.US), iQIYI (IQ.US), XPeng (XPEV.US), Manbang Group (YMM.US), Weibo (WB.US), Baozun (BZUN.US), UCL (UCL.US)

.SPX

U.S. stock index futures were mixed, with market news suggesting that Federal Reserve officials hinted that interest rate cuts may not occur before September. Dow futures rose slightly, while S&P 500 and Nasdaq futures fell by 0.16% and 0.66%, respectively. Major European stock indices generally rose, while WTI and Brent crude oil prices dipped slightly. Moody's downgraded the deposit ratings of major U.S. banks due to the downgrade of the U.S. credit rating and weakened government support capacity

- U.S. stock index futures showed mixed results ahead of the market opening, with the Dow slightly up while the S&P 500 and Nasdaq futures fell.  
- European indices, including Germany's DAX and the UK's FTSE 100, experienced gains, while WTI and Brent crude oil prices declined.  
- The Federal Reserve officials indicated that interest rate cuts are unlikely before September, and Moody's downgraded the deposit ratings of major U.S. banks due to reduced government support.

Zhitong

Moodys

S&P 500

Deutsche Bank AG

Vodafone 

Ucloudlink

GraniteShares 2x Long NVDA Daily ETF

NVIDIA

Home Depot

Full Truck Alliance

ZTO EXPRESS-W

YieldMax NVDA Option Income Strategy ETF

Taiwan Semiconductor

Bank of NY Mellon

Target

TUYA-W

Bank of America

Medtronic

Yalla

Williams

BIDU-SW

WB-SW

Lowes

Wells Fargo

State Street

JPMorgan Chase

Vipshops

FinVolution

iQIYI

XPENG-W

U.S. Stock Market Outlook | The three major stock index futures are mixed, and Federal Reserve officials hint that interest rate cuts may not occur before September