Stocks Climb Back Toward Record Highs

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Table of Content:

1.    Major indexes weekly performance 

2.    S&P 500 sector index weekly performance 

3.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week ended May 10, all the U.S three major indexes closed higher. The S&P 500 Index(SPX) neared its all-time high and recorded its third consecutive week of gains. The other major indexes also advanced, with value stocks generally outperforming growth shares. The rebound over the past three weeks was helped by a better-than-expected earnings season. Artificial intelligence remains a key theme that continues to benefit the mega-cap tech and the Magnificent Seven stocks specifically. Refer to below major indexes weekly and monthly performance table.

Key highlights for the week and next:

1.    Earnings. About 90% of the S&P 500 companies have now reported earnings for the first quarter. Results have so far exceeded analyst estimates by 8.5%, which is the biggest upside surprise since the third quarter of 2021, with earnings growing 5.5% from last year. 

2.    Jobless claims hit highest level since August. The number of people claiming unemployment benefits rose to 231k in the week ended the previous Wednesday, its highest since last August. A surprise rise in weekly jobless claims at least in the eyes of investors. 

3.    Another sign of cooling labour market was the University of Michigan reported that its preliminary index of consumer sentiment in May tumbled unexpectedly to 67.4, down from a final reading of 77.2 in April and marking its lowest level in six months.

SPX sectors in play

All the 11 sectors of SPX closed with gains. Utilities(XLU) and Financials( XLF)   outperformed. Consumer Discretionary(XLY) and Energy(XLE) lagged. From earnings standpoint, communication services, consumer discretionary and technology continue to stand out for their strong growth, but other areas are also delivering solid results, namely industrials, financials and consumer staples. The only three sectors that are seeing earnings declines for the quarter are energy, materials and health care, with the latter reflecting a quarterly accounting loss from Bristol Myers. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All three indexes are approaching their all-time highs after three weeks rally. Bulls seem strong and uptrend is well intact. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks advanced as recovery hopes rose following buoyant holiday spending during the prior week’s Labor Day holiday. The Shanghai Composite Index(SSE) rose 1.6%, while the blue chip CSI 300 added 1.72%. In Hong Kong, the benchmark Hang Seng Index added 2.64%. (Refer to the above weekly performance table).

Key highlights for the week and outlook for China/HK:

1.    The private Caixin/S&P Global survey of services activity reached 52.5 in April, down from March’s 52.7, as expected, and marked its 16th monthly expansion. The Caixin/S&P composite purchasing managers’ index, which tracks both the services and manufacturing sectors, edged up to 52.8 from 52.7 in March as overall business activity expanded in April. 

2.    Tourism revenue over the five-day break rose 7.6% compared with the 2023 holiday and surpassed pre-pandemic levels, according to data from the Ministry of Culture and Tourism. Domestic revenue rose 12.7% from last year, while international trips also picked up. 

3.   China’s exports rose by 1.5% in April from a year earlier, up from a 7.5% decline in March, and broadly in line with consensus estimates.

Hang Seng Index component stocks weekly return(click to enlarge):

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index ended edged lower 0.07%. As banks down after ex-dividend. Next major resistance level is around 3400 previous highs, immediate technical support 3250 level.

STI Index component stocks weekly return:

STI weekly chart

Source: Some contents and data excerpted from various public market reports.

Stocks Rally on Fed Rate-cut Hopes

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Table of Content:

1.    Major indexes weekly performance 

2.    Major indexes monthly performance for April 

3.    S&P 500 sector index weekly performance 

4.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week ended May 3, U.S major indexes ended higher following a volatile week featuring a raft of economic and earnings data. Latest reported nonfarm payroll less than expected, and easing wage growth, bolstering investors' confidence the Federal Reserve will eventually lower interest rates. The S&P 500 index (SPX) and the Nasdaq Composite ($COMP) both ended at three-week highs. Refer to below major indexes weekly and monthly performance table. 

Index Monthly performance for April:

Key highlights for the week and next:

1.    Nonfarm payrolls reported on Friday increased 175k during April, down from an upwardly revised 315k in March and the smallest monthly increase since last October. Payrolls fell short of expectations for a gain of about 250,000. 

2.    On Friday, the Institute for Supply Management reported that its gauge of services sector activity had fallen back into contraction territory for the first time since December 2022. 

3.    Fed two-day policy meeting concluded in the week stated policymakers were not cut rates—and rates were left steady at the meeting, as was widely expected—neither did they see the need to increase rates given the “sufficiently restrictive” current stance of monetary policy. 

4.   Corporate earnings. It was the second-busiest week of first-quarter earnings reports, Apple’s earnings beat market forecast and seemed to help drive a rebound in overall sentiment. Also announced to buy back USD 110 billion of its own shares, the largest such repurchase in history. Another notable mover for the week was Tesla, which surged over 15% on Monday after founder Elon Musk made a surprise appearance in China following news of the government’s tentative approval of the self-driving technology the company has under development.

SPX sectors in play

For the week, Nine out of the 11 sectors of SPX closed positive. Utilities(XLU) and Real Estate(XLRE) outperformed. Technology(XLK) and Consumer Discretionary(XLY) also among top gainers. Financials( XLF) and Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

SPX and COMP indexes both ended 2^nd consecutive week up while Dow ended 3^rd weekly gains in a row. All three major indexes weekly uptrend seem well intact.  Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose in a holiday-shortened week on hopes that the government will ramp up support. The Shanghai Composite Index(SSE) gained 0.52%, while the blue chip CSI 300 added 0.56%. In Hong Kong, the benchmark Hang Seng Index added 4.67%. Markets in mainland China were closed from Wednesday for the Labor Day Holiday and will reopen on Monday, May 6. Hong Kong markets were closed Wednesday but reopened Thursday. (Refer to the above weekly performance table).

Key highlights for the week and outlook for China/HK:

1.    China’s top decision-making body, the 24-member Politburo, pledged to implement prudent monetary and fiscal support to shore up demand at its April meeting last Tuesday. Officials stated that China would make flexible use of monetary policy tools to restore growth, including possible cuts to interest rates and the reserve requirement ratio, which sets the amount of cash that banks must set aside in reserve. 

2.    Official PMI was a better-than-expected reading of 50.4 in April, down from March’s 50.8, marking the second straight monthly expansion. The nonmanufacturing PMI reached a below-consensus 51.2, easing from 53 in March, as new orders and services activity stalled from the prior month. Separately, the private Caixin/S&P Global survey of manufacturing activity edged up to a better-than-expected 51.4 in April, marking its 16th month of expansion.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index ended its 2^nd weekly gains, reaching new highs since Aug last year. Banks such as DBS were among top gainers of the week, pushing the index higher, next major resistance level is around 3400 previous highs. Immediate technical support 3250 level.

STI Index component stocks weekly return:

STI weekly chart

Source: Some contents and data excerpted from various public market reports.

Stocks Rallied Amid Robust Tech Results

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Key takeaways:

1.    Earnings of the Magnificent 7 under spotlight for the week. Strong results helping the S&P 500(SPX) recover half of its April losses. 

2.    U.S Q1 GDP indicated growth slowed notably to 1.6% from 2.5% consensus and the slowest pace of growth in nearly two years. 

3.    Personal consumption expenditures (PCE) index rose at an annualized rate of 3.7% in the first quarter, more than expected and well above both the fourth quarter’s 1.7% increase and the Federal Reserve’s 2% long-term inflation target.

U.S.

For the week ended Apr 26, U.S major indexes managed to snap a string of three weekly losses as investors responded to the busiest week of the first-quarter earnings reporting season. The technology-heavy Nasdaq Composite Index performed best, helped in part by strength in Apple and a late rebound in chipmaker NVIDIA. Refer to below major indexes monthly performance table.

Key highlights for the week and next:

1.    Alphabet's(Google parent) shares rally sharply following robust quarterly earnings, lifting tech stocks and helping the Nasdaq Composite(COMP) end its four-week slide. Another tech mega-cap company, Microsoft (MSFT), jumped almost 2% after reporting better-than-expected quarterly results. Conversely, Facebook parent Meta Platforms fell sharply—at one point erasing nearly USD 200 billion in market value—after CEO Mark Zuckerberg announced plans to continue heavy spending on artificial intelligence and other new technologies. 

2.    Q1 GDP missed estimates and Core PCE index rebounded, more than expected.

SPX sectors in play

For the week, all the 11 sectors of SPX closed positive. Technology(XLK) and Consumer Discretionary(XLY) outperformed while Materials(XLB) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

SPX and COMP indexes rebounded 1^st week after three-week consecutive down. Both SPX and COMP closed above their 20 weekly MA, while Dow closed just beneath its 20weekly MA. Overall still uptrend. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose as investors grew more optimistic about the economy. The Shanghai Composite Index(SSE) gained 0.76%, while the blue chip CSI 300 added 1.20%. In Hong Kong, the benchmark Hang Seng Index soared 8.8%. (Refer to the above weekly performance table).

Key highlights for the week and outlook for China/HK:

1.    China’s economy is expected to grow 4.8% this year, up from a median forecast of 4.6% last month, according to 15 economists surveyed by Bloomberg. China’s gross domestic product grew an above-consensus 5.3% in the first quarter from a year earlier, accelerating slightly from the 5.2% year-over-year expansion in the fourth quarter of 2023. However, economists downgraded their inflation forecasts as declining producer prices and a persistent property market slump remain a drag on the economy. 

2.    Chinese banks left their one- and five-year loan prime rates unchanged at 3.45% and 3.95%, respectively, as expected, after the People’s Bank of China kept its medium-term lending rate on hold the prior week.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index also recorded its 1^st weekly rebound after three-week consecutive decline. The index had a bullish breakout from its past 6 months consolidation and reached new high since Aug last year(based on adjusted price. Immediate technical support 3250 level and upside resistance at 3340.

STI Index component stocks weekly return:

STI weekly chart

Source: Some contents and data excerpted from various public market reports.

Stocks Continue Decline On Geopolitical and Interest Rate Concerns

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Key takeaways:

1.    The S&P 500(SPX) is down about 5.5% from recent highs, while the Nasdaq(COMP) is down around 7%, after a 28% rally in the S&P 500 over the past six months, a period of consolidation or some profit-taking was expected. 

2.    Corrections in the 5%-15% range are typical in any given year if not into a deep bear-market( with 20% or more losses). 

3.    Market expectation of Fed rate cuts reduced to one cut in 2024 from the six that were priced in at the start of this year. 

4.    Q1 earnings season is underway, mega-cap technology firms, including Microsoft, Google, and Meta will all be reporting earnings next week, with investors closely watching for signs of any weakness.

U.S.

For the week ended Apr 19, stocks recorded their third consecutive week of broad losses, as concerns over tensions in the Middle East and the possibility of U.S. interest rates remaining “higher for longer” appeared to weigh on sentiment. Both the SPX and COMP indexes fell a sixth-straight day, pushing SPX below 5000 on its weakest stretch in 18 months. The COMP ended at a three-month low. Mega-cap technology shares lagged as rising rates placed a higher theoretical discount on future earnings. Refer to below major indexes monthly performance table.

Key highlights for the week and next:

1.    Oil and commodity prices move slightly below recent highs as hopes rise for easing geopolitical tensions. WTI oil retreating to $82 per barrel from $87 (a high for the year) two weeks ago. However, spot gold price still very bullish, recorded its five-weeks gain nearly $2400 per ounce. 

2.    Fed signals rate cuts will wait in response to data. On Tuesday, Fed Chair Jerome Powell stated at an economic conference that “recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence.”  U.S treasury yields have moved higher as market expectations of Fed rate cuts have decreased. 

3.    Magnificent 7 stocks have corrected 8.4% as compared to SPX’s 5.5% retreat from recent highs. Magnificent 7 represented by Apple, Amazon, Alphabet, Meta Platforms, Microsoft, NVIDIA and Tesla. 

4.    Q1 earnings season is underway, mega-cap technology firms, including Microsoft, Google, and Meta will all be reporting earnings next week, with investors closely watching for signs of any weakness.

SPX sectors in play

For the week, four out of the 11 sectors of SPX closed positive. Growth and the interest-rate-sensitive parts of the market, including small-cap stocks and the real estate sector(XLRE), have pulled back more. Tech(XLK) and Consumer Discretionary(XLY) lagged. While Utilities(XLU) outperformed. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

SPX and COMP indexes declined for 3^rd week in a row, SPX back to its 20 weekly MA support level and COMP already dropped below it. SPX and COMP have pullback 5.5% and 7% respectively from their recent highs. The Magnificent 7 declined 8.4% from recent highs. The DJI index closed almost flat after two-week down. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose after the economy expanded more than expected in the first quarter.  The Shanghai Composite Index(SSE) gained 1.52%, while the blue chip CSI 300 added 1.89%. In Hong Kong, the benchmark Hang Seng Index gave up 2.98%. (Refer to the above weekly performance table).

Key highlights for the week and outlook for China/HK:

1.   China’s gross domestic product expanded an above-consensus 5.3% in the first quarter from a year ago, accelerating slightly from the 5.2% growth in last year’s fourth quarter. On a quarterly basis, the economy grew 1.6%, rising from the fourth quarter’s 1.4% expansion.

2.    The People’s Bank of China injected RMB 100 billion into the banking system via its medium-term lending facility compared with RMB 170 billion in maturing loans and left the lending rate unchanged, as expected.Hang Seng Index stocks top weekly gains: ENN Energy(2688) +10.37%; China Hongqiao(1378) +9.28%;   

3.    China’s new home prices fell 0.3% in March, matching February’s 0.3% drop and extending losses for the ninth consecutive month, according to the statistics bureau.

Hang Seng Index component stocks weekly return(click on picture to enlarge):

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index closed on its 3^rd weekly decline with 1.26% loss this week. The index has been hovering around its 50dma and 200dma 3180 level last week. Immediate technical support 3140 and resistance 3200.

STI Index component stocks weekly return(click on picture to enlarge):

STI weekly chart

Source: Some contents and data excerpted from various public market reports.