Index Weekly Wrap for the Week of Mar 22- U.S Yield Curve Inverted

Summary of content for the week of Mar 22:

1. Week 12 major indexes performance;
2. Week 12 US sector indexes performance;
3. Major indexes weekly charts of support and resistance levels.

U.S stocks sold off on Friday took the broad SPX index down from 5-month high hit the day before. A plunge in long-term 10-year treasury yield falling below short-term 3-month T-bill yield as investors worried over a potential recession. 

SPX technicals look pretty bearish, as seen from below SPX weekly chart, it had a fake-out weekly candlestick, selloff back below its previous predominant box, this usually means it will continue to test the box bottom level in coming week(s).

Meanwhile, recession in the past have typically came around a year after an inversion occurred. Data from Bianco Research shows that the 3-month/10-year curve has inverted for 10 straight days six or more times in the last 50 years, with a recession following on average, 311 days later.

This week, the Fed signaled low rates and easing monetary conditions by keeping rate unchanged at current level-expecting no new rate hiking this year, stocks responded favorably at first, but soon gave back these gains as the focus turned to what the Fed's pause might mean about the underlying health of economy. Prospect of lower rates are good for real estate(XLRE) sector, which is one of the performers with the SPX index. The financials(XLF) sector was sell-off, as lower rate is no-good for the banks. 

In Asia, China Shanghai Composite Index SSE rose for 2nd week in a row as domestic investors confident that the government would continue to step up easing measures to support its slowing economy. The possible U.S-China trade deal also helped sentiment, as U.S delegates preparing travel to Beijing for next round of talks on Mar 28-29.

Hongkong Hangseng and Singapore STI index are influenced by both China and U.S, both indexes are up this week but to a small extent. HSI rebounded to its 50% Fibonacci retracement level which measures from high in Feb-Nov 2018,  which acts as a major technical resistance level. STI traded much lower to its 50% Fibonacci retracement level at 3300, which it hit Feb 2019 then came down lower till now, refer to its weekly chart as follows.