U.S. Stocks on 2nd Losing Week on Rising Yield Ahead of Nov 5 Election

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

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

U.S.

For the week of Nov 1, the major indexes finished mostly lower over an busy week of economic data and earnings reports. The tech-heavy Nasdaq Composite(COMP) reached intra-week record high on Wednesday before falling back sharply on Thursday. Roughly 42% of the S&P 500(SPX) companies reported Q3 earnings over the week, including  five of the so-called Magnificent Seven stocks. Refer to below major indexes performance table for the week.

All major indexes in my watchlist recorded negative return for the month of October. Refer to below monthly performance table.

Key highlights for the week and next:

1.    There were 169 SPX firms reported earnings, overall results helped lift Q3 EPS of SPX estimate to 5.1% from the previous 3.6%. Of the 70% of S&P 500 companies reporting to date, 75% have beaten analysts' EPS estimates, and 60% exceeded revenue expectations. Including five of the so-called Magnificent Seven mega-cap technology-oriented stocks: Meta and Microsoft, Google parent Alphabet, Apple, and Amazon.com. Overall earnings have been decent, with Amazon (AMZN) and Alphabet (GOOGL) results impressed the markets. 

2.    U.S. nonfarm jobs report released on Friday for the month of October showed the total new jobs came in well below expectation, with 12k jobs added versus forecasts of 100k. The average monthly jobs added this year are now about 170k, below last year’s average of 250k but still above the long-term average of 148k. The jobs added however were mainly negatively impacted by Boeing strike and Hurricanes. 

3.    U.S election and Fed meeting coming week. The U.S presidential election is on Tuesday Nov 5. The Fed meeting is also on deck for Wednesday and Thursday Nov 6 and 7. It’s expected there would be another 0.25% rate cut on track.  In fact, markets are now pricing in higher probabilities of rate cuts at both the November and December Fed meetings. 

4.   November and December in election years have tended to be positive months for markets. Historically election-related market volatility has often been buying opportunity. 

5.    October's ISM Manufacturing PMI was weak at 46.5%, its lowest level in 15 months. It was the seventh straight month of contraction for the index. Manufacturing contributes about 11% to U.S GDP while private consumption contributes about 68%. 

6.    Treasury yield hit 4-month high. The weak manufacturing and payroll reports failed to prevent the yield on the benchmark 10-year U.S. Treasury note from moving to another four-month intraday high (4.37%) on Friday, perhaps in response to expectations for an eventual renewal inflation and growth pressures. 

SPX sectors in play

Two out of the 11 SPX sectors posted weekly gain. Communication Services(XLC) and Financials(XLF) sectors closed positive, while Real Estate(XLRE) lagged. Refer to below SPX sectors ETF weekly performance table.

SPX sectors forecast earnings 2025:

Indexes technical levels

Dow and SPX closed 2^nd weekly decline, while the tech-heavy Nasdaq(COMP) index closed with 1^st weekly loss. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks retreated despite data showing a pickup in economic activity. The Shanghai Composite Index(SSE) fell 0.84%, while the blue chip CSI 300 gave up 1.68%. In Hong Kong, the benchmark Hang Seng Index lost 0.41%. (Refer to the above weekly performance table).

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

1.    China’s factory activity expanded for the first time since April amid better demand. The official manufacturing purchasing managers’ index (PMI) rose to an above-consensus 50.1 in October from 49.8 in September. The nonmanufacturing PMI, which measures construction and services activity, increased to a lower-than-expected 50.2 in October from 50 in September. The rise in services activity was partly attributed to increased spending during the country’s Golden Week holiday. Separately, the private Caixin/S&P Global survey of manufacturing activity rose to 50.3 in October from the prior month’s 49.3 amid new order growth. 

2.    In the property sector, the value of new home sales by the country’s top 100 developers rose 7.1% from a year ago after September’s 37.7% drop, marking the first year-on-year growth in 2024, according to the China Real Estate Information Corp. 

3.    Taken together, the first batch of major economic indicators after the rollout of Beijing’s broad stimulus package indicated early signs of recovery in the Chinese economy. Analysts believe stock valuations will be driven by fundamentals, and focus will switch to earnings growth if economy continue to improve. 

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) settled the week at 3555.43 close, fell 1.06% for the week. The index recorded its 2^nd consecutive weekly loss and its lowest close in seven weeks. HKland was the top performer with 14% weekly gain. Refer to below index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

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

Rising Yield Weigh on U.S Stocks

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

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

U.S.

For the week of Oct 25, the S&P 500 index(SPX) finished lower after previous six-week winning streak. A slow creep upward for the 10-year Treasury note yield to near three-month highs appeared to weigh on equity buying interest. Large-cap stocks held up better than small-caps, and growth stocks outperformed value as the tech-heavy Nasdaq Composite Index gained slightly. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    Yields have moved higher since the Fed initiated its first rate cut in September and rose further this week, interrupting the stock market’s streak of gains. Bonds price keeps falling for six-week streak (Bond prices and yields move in opposite directions.) 

2.    The 10-year yield climbing from around 3.8% to 4.4%, reach its highest since last December. Yields appears to be rising for the right reasons. 1) The economy remains resilient with recession probability continuing to drop, thus leading to a more gradual rate-cutting expectation than anticipated at the September Fed meeting. 2) Concerns over U.S debt and the upcoming election. 

3.    Tesla(TSLA) outperformed the broad market and “Magnificent 7”. It was the best performer in the S&P 500 and led the Magnificent Seven, helping to keep the broad index from a steeper decline. TSLA surged 22% after its earning report, recorded its best daily gain in more than 11 years. 

4.    Upcoming two weeks important earnings and events 

SPX sectors in play

Only one out of the 11 SPX sectors posted weekly gain. Consumer Discretionary ( XLY) was the only gainer. Technology (XLK) and other large-cap techs performed relatively better. Tesla posted unexpectedly strong quarterly earnings and projected 20% to 30% vehicle sales growth in 2025. The quarterly results and bright outlook drove the stock to its best daily gain (22%) in more than 11 years on Thursday. Materials (XLB) shares lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Dow and SPX closed lower but the tech-heavy Nasdaq(COMP) index edged up higher after setting a new all-time intra-week high. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose as the central bank implemented more stimulus measures to shore up the economy. The Shanghai Composite Index(SSE) added 1.17%, while the blue chip CSI 300 gained 0.79%. In Hong Kong, the benchmark Hang Seng Index fell 1.03%. (Refer to the above weekly performance table).

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

1.    The People’s Bank of China (PBOC) injected RMB 700 billion into the banking system and left the lending rate unchanged at 2%, as expected. With RMB 789 billion in loans set to expire next month, the operation resulted in a net withdrawal of RMB 89 billion from the banking system for October. 

2.    Separately, Chinese banks lowered their one- and five-year loan prime rates by 25 basis points to 3.1% and 3.6%, respectively, making it cheaper for consumers to take out mortgages and other loans. The rate cuts were in line with a broad stimulus package unveiled by the PBOC in late September aimed at reviving China’s economy. The central bank also signaled additional easing measures in the near term, including another potential cut to the reserve requirement ratio, depending on liquidity conditions. The PBOC last cut the reserve requirement ratio by 50 basis points on September 27. 

3.    China's youth unemployment rate eased in September from a record high the prior month. The jobless rate for 16- to 24-year-olds, excluding students, came in at 17.6% in September, down from 18.8% in August, according to official data.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) settled the week at 3593.41 close, fell 1.29% for the week. The index retreated from its sideway consolidation range top, after cycled up previous week, the sideways has now into its 6^th week. Refer to below index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

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

SPX Hit New Highs Again, Six-week Win Streak

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Main Content:

1.    Major indexes weekly performanc 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

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

U.S.

For the week of Oct 18, all the three major indexes closed with gains this week, extending weekly win streak to six. SPX hit a new record finish Friday on fresh tailwinds from surging company results. The tech-heavy Nasdaq Composite(COMP) outpaced other indexes thanks partly to a double-digit rally in Netflix (NFLX) following its robust earnings. Average earnings per share (EPS) are exceeding Wall Street's expectations, up more than 6.7% for the 15% of S&P 500 companies reporting third quarter results so far. Refer to below major indexes performance table for the the week.

Key highlights for the week and next:

1.   Retail sales increased 0.4% last month, accelerating from the 0.1% uptick registered in August. The September reading was slightly above the consensus estimate for a 0.3% gain. 

2.    Initial jobless claims decreased fell unexpectedly to 241k during the week ended October 12, a decline of about 19k filings. 

3.    According to the CME FedWatch Tool, there is a 91% chance rates will fall 25 basis points at the FOMC meeting on November 6–7. There's a 9% chance of no change from current rates. 

SPX sectors in play

Nine out of the 11 SPX sectors closed with gains for the week, led by the utilities(XLU) and real estate(XLRE) sectors. Energy(XLE) stocks pulled back in sympathy with oil prices, which retreated as fears of possible Israeli attacks on Iran’s oil and gas infrastructure subsided. Strong quarterly results from Taiwan Semiconductor Manufacturing(TSM), appeared to reignite excitement for artificial intelligence (AI)-related stocks that are in the Nasdaq. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes closed up for the week, hit weekly win streak to six. Uptrend appears strong, the lagging Nasdaq index rebounded up to near its best level at 18671 hit three months ago.

Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose as the central bank unveiled more support measures after data showed that deflationary pressures grew more entrenched in the economy. The Shanghai Composite Index(SSE) added 1.36%, while the blue chip CSI 300 gained 0.98%. In Hong Kong, the benchmark Hang Seng Index fell 2.11%. (Refer to the above weekly performance table).

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

1.    China’s economy in the Q3 expanded 4.6% from year-ago levels, beating a consensus estimate. This growth rate was slightly lower than the 4.7% expansion recorded in the second quarter and below the government’s stated target of “around 5%.” On a quarter-over-quarter basis, the economy grew 0.9%. 

2.    Other economic data showed signs of improvement. Industrial production rose a better-than-expected 5.4% in September from a year earlier, up from August’s 4.5% increase. Retail sales grew an above-forecast 3.2% year over year, an acceleration from the 2.1% increase logged in August. Higher sales of household appliances were a contributing factor. 

3.   Inflation. Annual inflation came in at a below-consensus 0.4% in September, the lowest level in three months and a slowdown from the 0.6% rate recorded in August. Core inflation, which strips out volatile food and energy costs, increased 0.1%, the lowest since February 2021, according to Bloomberg. The producer price index fell a bigger-than-expected 2.8% from a year ago, deepening from August’s 1.8% drop.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) closed at 3640.19, added 1.86% for the week. The index cycled up to its five-week sideway consolidation top line, closed near its best level 3652. The three local banks and SingTel led the gains this week. Overall uptrend is strong. Refer to below index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

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

SPX Hit New Highs on Solid Bank Earnings. Possible China Stimulus Ahead.

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

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

U.S.

For the week of Oct 11, both the S&P 500 Index (SPX) and Dow Jones Industrial Average(DJI) moved to record highs, helped by some upside surprises to kick off earnings season. Shares in JPMorgan Chase(JPM) and Wells Fargo(WFC) rose on Friday after the banking giants reported smaller-than-feared declines in third-quarter profits, while the former managed a small increase in revenues. Refer to below major indexes performance table for the the week.

Key highlights for the week and next:

1.    Inflation modestly higher than expected. As reported on Thursday, both headline and core inflation in September a tick above expectation, which rose by 0.2% and 0.3% respectively. On a year-over-year basis, core prices increased 3.3% in September versus 3.2% in August, marking the first increase since March 2023. 

2.    While September inflation came in slightly hotter than expected, it's unlikely to stop the Fed from continuing its easing campaign, as it has now shifted its focus from inflation to the labor market. It’s expected quarter-point rate cuts at each meeting until Fed policy settles around 3% - 3.5%. 

3.    The CME FedWatch Tool shows a decent (14.1%) chance of the Fed keeping rates steady for the Fed’s next policy meeting in November. Minutes from the Fed’s last policy meeting released Wednesday, also revealed that several members preferred only a 25-basis-point (0.25 percentage points) rate cut. 

4.    The Q3 earnings season kicked off on Friday, with some of the big U.S. banks reporting better-than-expected results. Consensus expects earnings for the quarter to grow 4.2%, the fifth consecutive quarter of growth. A key trend to watch is whether an expected slowdown in earnings of the Magnificent 7 group of stocks coincides with a pickup in earnings growth from the rest of the market, or the S&P 493. 

SPX sectors in play

Six out of the 11 SPX sectors closed with gains for the week. Technology (XLK) outperformed, as a solid gain in NVIDIA(NVDA) shares compensate for a decline in Google parent Alphabet(GOOGL), following reports of a possible breakup of the company. Tesla was also weak following a skeptical response to the company’s highly anticipated unveiling of its new “robotaxis” and “robovans.” Utilities(XLU) shares lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes closed up for the week with each added more than 1%. Both the SPX and DJI closed at record new highs. Going forward, elevated valuations, geopolitical risks in the Middle East, and a tight U.S. presidential election could act as catalysts for short-term volatility.

Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks fell over a holiday-shortened week as optimism about Beijing’s stimulus measures waned. The Shanghai Composite Index(SSE) lost 3.56%, while the blue chip CSI 300 gave up 3.25%. In Hong Kong, the benchmark Hang Seng Index fell 6.53%. (Refer to the above weekly performance table).

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

1.    The National Development and Reform Commission(NDRC), the country’s economic planning agency, announced at a press conference on Tuesday that China would speed up countercyclical measures to support growth. The speech largely reiterated plans to boost investment and increase direct support to low-income groups and new graduates. Officials also stated that the central government will continue issuing ultra-long special sovereign bonds in 2025 to fund major projects and invest RMB 100 billion in strategic areas. 

2.    The People’s Bank of China launched a RMB 500 billion swap facility to provide liquidity to institutional investors to buy stocks, Bloomberg reported. Under the mechanism, the central bank will accept applications from nonbank financial institutions such as securities firms, funds, and insurers to obtain highly liquid assets, such as government bonds and central bank bills, if they provide certain collateral. The facility was part of a sweeping stimulus package announced by the central bank in late September that included interest rate cuts and other measures aimed at jumpstarting China’s economy. 

3.    Spending by Chinese consumers over the long holiday that ended Monday lagged pre-pandemic levels, Bloomberg reported, citing official data. Passenger traffic rose by 5.9%, while spending increased by 6.3% year on year. Box office sales totaled RMB 2.1 billion, down from RMB 2.7 billion reported a year earlier. However, average daily spending per trip was approximately RMB 131, up from RMB 113 during the five-day Labor Day holiday in May. 

4.    The highly anticipated briefing by China’s Ministry of Finance has wrapped up on Saturday Oct 13 - alas with no specific pledge of the 2 trillion yuan ($283 billion) in fresh economic stimulus that investors were hoping for in the lead up to the event. However, Policymakers offered clearer guidance on the focus of fiscal policy, vowing new measures to support the beleaguered property sector and to relieve the debt burden of local officials. Investors are turning their attention to the next meeting in the coming weeks of China’s top legislature, the National People’s Congress(NPC) Standing Committee, which has the power to approve more government bond sales. Investors and analysts expect China to deploy as much as 2 trillion yuan in fresh fiscal stimulus in order to shore up growth and boost confidence, a flash survey by Bloomberg shows.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) closed with a modest decline of 0.43% for the week. The index has been in sideways trading in the range of 3544- 3653 level over the past four weeks, while it hit new record of 3652.62 during this period. There were only five stock closed up among its 30 component stocks(refer to below STI index stock weekly return table). Overall, the index still in uptrend but in sideway consolidation mode right now, the healthy breather is essential for a bull market to continue.

Refer to below index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

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