U.S Stocks Declined on Inflation Fears and Political Uncertainties

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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 Jan 10, major stock indexes declined in the shortened week. Financial markets was largely negative after latest strong jobs data, which well above expectation. Government bond yields moved sharply higher, the higher yields weighed on stocks, particularly those with the highest valuations. The Nasdaq Composite fell 2.34%, its biggest weekly drop since mid-November. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    U.S Economy. December nonfarm payrolls came in at 256k, well above expectations of 165k, while unemployment rate fell to 4.1% from 4.2%. Wage gains continue to outpace inflation rate, a positive for consumers and sentiment. 

2.    Resilient labor market and hawkish Fed minutes indicate a slower pace for rate cuts. As a result, government bond yields moved higher last week, and stock market declined. In fact, according to the CME FedWatch tool, markets now expect just one more Fed rate cut in 2025. 

3.    Inauguration Day of the President-elect Trump is less than two weeks away on Jan 20. While the incoming administration has highlighted several policy initiatives – including tariffs, immigration and energy reform, deregulation and tax cuts – it remains to be seen which of these are prioritized in the weeks ahead. The uncertainty around which policies are prioritized, and in what order, may continue to remain an overhang on markets. 

SPX sectors in play

Three out of the 11 SPX sectors recorded weekly gain. Growth and high valuation stocks underperformed while defensive sectors such as Energy(XLE) and Health Care(XLV) stocks outperformed. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes declined in the week, SPX and Nasdaq dropped to their level in November. Dow went back down to its Oct level. Lower highs and lower lows seen on their daily charts which indicate a downtrend is formed on short term time frame though weekly chart still uptrend. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks fell as data showed that the economy remained stuck in deflation. The Shanghai Composite Index(SSE) lost 1.34%, while the blue chip CSI 300 gave up 1.13%. In Hong Kong, the benchmark Hang Seng Index fell 3.52%. (Refer to the above weekly performance table).

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

1.    Inflation data released Thursday showed that China is still grappling with deflationary pressures. The consumer price index rose 0.1% in December from a year earlier, in line with estimates and down from 0.2% in November amid lower food and fuel prices. 

2.   Separately, the private Caixin/S&P Global survey of services activity rose to a better-than-expected 52.2 in December, the highest level since May. The reading matched official data released the prior week showing that nonmanufacturing activity rose to 52.2 in December—the highest level in nine months—after Beijing rolled out a broad stimulus package in late September. 

3.   In a statement following its quarterly policy meeting, The People’s Bank of China said that it will implement a moderately loose monetary policy this year to support economic growth. The central bank pledged to increase financial support for the technology, emissions, pensions, and digital sectors. It also announced that it will reduce the reserve requirement ratio and interest rates when appropriate to boost consumption. 

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

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) inched lower 0.01% this week, closing at 3801.56 after hitting new record at 3886.98 intra-week. Three local banks were the top performers this week while the REITs were at the bottom of the performance table as shown below. Interest rates sensitive part of the markets was negatively affected by the sharply higher US bond yields.

Click below for STI stocks weekly performance table.

STI weekly chart

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

U.S Stocks Close Out Another Strong Year

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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 Jan 3, major stock indexes were slightly lower during the holiday-shortened week, although broad gains on Friday helped indexes finish off their worst levels. Underperformance at the beginning of the week was partially attributable to some profit-taking heading into the end of the year as Tuesday was the fourth consecutive day of declines for the S&P 500 Index. However, despite the year-end slump for U.S. equities, 2024 marked the second straight annual gain of over 20% for the S&P 500 Index(SPX) and capped off the best two-year stretch in 25 years. The Nasdaq Composite(COMP) also finished the year up over 20% for the sixth time in the past eight years. Refer to below major indexes performance table for the week and major indexes performance for the month of December and year 2024.

Major indexes monthly performance for December and for the whiole year 2024.

Key highlights for the week and next:

1.    U.S GDP. The U.S. economy appears to have grown at a 2.7% pace in 2024 (including Q4 estimates). This is down only marginally from 2023’s 2.9% rate and above the estimated long-term growth rate of around 2%. Consumer spending accounting 70% of GDP, remains supportive. For 2025, it’s believed the U.S. economy will continue to see positive but more moderate economic momentum. 

2.    Fed slows the pace of interest rate cuts to settling in the 3.5%-4% range, two or possibly three rate cuts is expected currently. 

3.    Jobless claims of 211k for the week ended Dec 28. This was a decline from the prior week’s reading of 220k and was the lowest level in eight months. 

SPX sectors in play

Four out of the 11 SPX sectors recorded weekly gain. Energy(XLE) and Utilities( XLU) stocks outperformed while Consumer Discretionary(XLY) and Materials(XLB) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes closed slightly lower in the holiday-shortened week, although a rally on Friday helped indexes finished off their worst levels. All three major indexes weekly uptrend remain intact, the SPX closed just at its 50dma after Friday’s rebound. Nasdaq Composite(COMP) rebounded Friday from its 50dma, closed in between its 20 and 50 dma. Dow was the weakest among the three, sideways below its 20/50dma. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks retreated as weaker-than-expected manufacturing data hurt investor sentiment. The Shanghai Composite Index(SSE) fell 5.55%, while the blue chip CSI 300 lost 5.17%. In Hong Kong, the benchmark Hang Seng Index gave up 1.64% during the holiday-shortened week. (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 third consecutive month. The official manufacturing PMI slowed to 50.1 in December from 50.3 in November, according to the statistics bureau. Though December’s reading surpassed the 50-mark threshold separating growth from contraction, it missed economists’ forecasts. The nonmanufacturing PMI, which measures construction and services activity, rose to a better-than-expected 52.2 in December from November’s 50 reading. 

2.    Separately, the Caixin China General Manufacturing PMI slowed to 50.5 in December from 51.5 in November. Though December marked the third straight month of expansion for the private survey, it too lagged economists’ forecasts. Taken together, the data pointed to a tentative recovery in the economy after Beijing unleashed a barrage of stimulus measures in September. However, “prominent downward pressures remain, with tepid domestic demand and mounting unfavorable external factors,” Caixin Insight Group noted in a statement accompanying the release. 

3.    December property sales stay unchanged from last year. The value of new home sales by the top 100 developers stayed flat in December from a year earlier compared with November’s 6.9% drop, according to the China Real Estate Information Corp. New home sales rose 24.2% month on month. For the full year, sales from the top 100 developers sank 28.1% versus a 16.5% drop in 2023. The data added to evidence of a possible turnaround in China’s housing market after Beijing unveiled a rescue package to revive the troubled sector in late September. 

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

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) added 0.8% this week, closing at 3801.83, recorded 2^nd weekly gains, the index remains in the bullish trend. Top index gainers including Seatrium and REITs, while the banks had mixed performance. Below is the weekly performance of the index stocks.

Click below for STI weekly chart.

STI weekly chart

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

HAPPY NEW YEAR 2025!

 Dear all readers, Wishing you and loved ones a HAPPY NEW YEAR!

Stocks Closed Higher on Holiday-Shortened Week

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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 Dec 27, major stock indexes produced moderate gains in the final full week of the year. The relatively quiet week started with a continuation of the previous Friday’s move in a rally largely driven by large-cap growth stocks, with the technology-heavy Nasdaq Composite leading the way and the Russell 1000 Growth Index outpacing its value counterpart through Tuesday. However, this trend reversed following Wednesday’s market closure for Christmas as most indexes declined in the second half of the week, giving back some of their earlier gains. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    U.S consumer confidence as reported on Monday fell in December to 104.7 from 112.8 in November. 

2.    Labor Department reported on Thursday that applications for unemployment benefits declined slightly to 219k for the week ended December 21, the lowest reading since mid-November. 

3.    Coming week important data to watch: China manufacturing PMI on Tuesday 31 December and US manufacturing PMI on Friday Jan 3. 

 

SPX sectors in play

Six out of the 11 SPX sectors recorded weekly gain. HealthCare(XLV) and Technology(XLK) stocks outperformed and Consumer Staples(XLP) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes closed higher this week. Nasdaq Composite(COMP) rebounded after previous week’s decline. SPX closed 1^st weekly gain after two-week decline. Dow also rebounded 1^st week after three-week down. All three indexes weekly charts are still in uptrend while Dow below its 50dma, SPX closed between its 50 and 20dma and Nasdaq is the strongest among the three, closed just above its 20dma. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose amid hopes that the government will announce further stimulus measures to support growth. The Shanghai Composite Index(SSE) added 0.95%, while the blue chip CSI 300 gained 1.36%. In Hong Kong, the benchmark Hang Seng Index added 1.87% during the holiday-shortened week. (Refer to the above weekly performance table).

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

1.    Chinese officials plan to sell a record RMB 3 trillion in special Treasury bonds next year as Beijing ramps up efforts to bolster the economy, Reuters reported, citing unnamed sources. The reported bond issue is a sharp increase from the RMB 1 trillion sovereign debt issuance in 2024, and proceeds will be used for boosting consumption via subsidy programs, equipment upgrades, and investment in innovation-driven sectors as China braces for a potential second trade war with the U.S. 

2.    The People’s Bank of China injected RMB 300 billion into the banking system via its medium-term lending facility and left the lending rate unchanged at 2%, as expected. With RMB 1.45 trillion in loans due to expire in December, the operation resulted in a net withdrawal of RMB 1.15 trillion from the banking system, the largest liquidity drain via the one-year lending facility since 2014, Bloomberg reported. 

3.    Manufacturing profits extend declines. Profits at industrial firms fell 7.3% in November from a year ago, according to the National Bureau of Statistics. November’s decrease marked the fourth consecutive monthly decline, albeit a narrower one than October’s year-on-year 10% drop. While the slower pace of decline followed Beijing’s extensive stimulus measures, the results showed that the policies have yet to arrest the decline in corporate earnings, which are under pressure from deflation in China over the past year.

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

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) added 1.39% this week, closing at 3771.63, recovered about half of its previous week’s loss. The index’s uptrend still well intact- currently hovering its 20dma. Seatrium was the top gainer of the week with 7.3% up. Only one stock – SingTel closed lower this week. Below is the weekly performance of the index stocks for reference.

Click below for STI weekly chart.

STI weekly chart

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

U.S. Stocks Slide Amid Hawkish Fed Stance

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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 Dec 20, major stock indexes declined during the week, although a rally on Friday helped major indexes recover some of their lost ground. Losses were broad-based, though smaller-cap indexes generally fared worst. The event dominating sentiment during the week appeared to be the Fed’s rate announcement following its highly anticipated policy meeting that concluded Wednesday. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    Fed rate cut. At final FOMC meeting of 2024, the Fed did cut rates by 0.25%, bringing the fed funds rate to 4.25% - 4.5%. However, it caught markets off guard with a hawkish tilt to its updated economic projections and indicated only two rate cuts in 2025, below the September estimate of four rate cuts. Markets initially reacted negatively, with bond yields moving higher and stocks moving sharply lower. The Fed pointed to two reasons for its more cautious approach to rate cuts – the outlook for inflation and the unknowns around tariff policy in the year ahead. 

2.    A strong U.S. economy. The Q3 annualized GDP figures came in at 3.1%, above forecasts of 2.8%, driven by healthy consumption of 3.7%. The Fed GDP-Now forecast also calls for Q4 U.S. GDP to come in around 3.2% annualized. This data confirms that U.S. economic growth is on pace to end the year above trend, which is typically in the 1.5% - 2.0% range.

3.    Friday morning’s release of the personal consumption expenditure (PCE) inflation report. The core PCE index—the Fed’s preferred measure of inflation—rose by 2.8% year-over-year in November, in line with October’s reading and slightly lower than consensus expectations. The better-than-feared report seemed to help push stocks higher on Friday to finish the week above their worst levels. 

SPX sectors in play

All the 11 SPX sectors recorded weekly losses. Technology(XLK) stocks outperformed relatively better while Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes closed lower this week. Nasdaq Composite(COMP) recorded 1^st weekly loss after four-weekly up streak, SPX closed 2^nd weekly down and Dow closed with 3^rd weekly loss. All three indexes weekly charts are still in uptrend while Dow closed below its 50dma, SPX closed just above its 50dma and Nasdaq still well above its 50dma. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks retreated as disappointing data raised concerns about the economy. The Shanghai Composite Index(SSE) fell 0.7%, while the blue chip CSI 300 lost 0.14%. In Hong Kong, the benchmark Hang Seng Index declined 1.25%. (Refer to the above weekly performance table).

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

1.   China November activity data pointed to the uneven nature of China’s recovery amid a looming trade war with the U.S. Retail sales expanded a below-consensus 3% from a year ago, down from October’s 4.8% rise and highlighting Chinese consumers’ unwillingness to spend. Fixed asset investment grew 3.3% in the January to November period, lagging forecasts, and less than the 3.4% increase in the calendar year to October. Property investment in the period fell 10.4%. Industrial production was a bright spot, rising a better-than-expected 5.4% from a year earlier amid demand for robots, passenger cars, and solar panels. 

2.    China's youth unemployment rate eased for the third consecutive month after hitting its highest level this year in August. The jobless rate for 16- to 24-year-olds, excluding students, was 16.1% in November, down from 17.1% in October, according to official data. Urban unemployment remained steady at 5%, as expected. 

3.    Property downturn stabilizes. New home prices in 70 cities fell 0.1% in November, slowing from October’s 0.5% drop, according to the National Bureau of Statistics. While November’s dip marked the 17th monthly decline, it was the slowest pace since June last year, according to Reuters. China’s property market has showed signs of stabilizing after Beijing unveiled a sweeping package in late September aimed at reviving the crisis-hit sector. Analysts anticipate that the government will ramp up efforts to stimulate growth as China’s economy faces higher tariffs and other challenges under the incoming Trump administration.

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

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) fell 2.37% this week, closing at 3,719.93—its lowest level in six weeks. The losses were broad-based, with 29 of the 30 constituent stocks declining, while one closed flat. This decline may indicate profit-taking as investors wrap up for the year. Despite this, the STI has delivered a year-to-date (YTD) price return of 14.8% and maintains an uptrend on its weekly chart. Below is the weekly performance of the index stocks for reference.

Click below for STI weekly chart.

STI weekly chart

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