Lip reading is incredibly valid. Many deaf or partially deaf people use it to help them understand what is being said to them or around them.
Watch an NFL or college football game. There’s a reason coaches call plays with a clipboard in front of their mouths.
It is if you know the context and a large index of previous content within that context. A football coach calling a play is one of those times, I can agree.
But I don’t think there is enough context in this case.
Just my 10 cents.
I do think Lady Obama could have avoided any second guessing, by just being solemn and quiet during the observation, no matter how awe struck (or bored/disappointed, if others are correct).