Wrapping Up 2020 in One More Week

 Summary of content for the week of  Dec 25:

1. Week 52 major indexes performance;

2. Week 52 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

U.S

U.S major stock indexes ended mixed in a holiday-shortened week. One more week to go to end the year, 2020 will go down in history as one of the most memorable and unpredictable years of our lives. We are lucky(or unlucky for some) to witness the history, I will prepare a special year-end wrap-up edition for WeeklyWrap next week. Meanwhile, here are some major events and focuses over the week ended Dec 25:

1. Over 1 million people in the U.S receiving the first dose of the new vaccine. 

2. New relief package of USD 900 billion passed by lawmakers and Trump likely to approve it despite he has cast doubt over the bill, as the package contains key funding for vaccine distribution.

3. UK and EU agree on post-Brexit trade deal, finally.

4. New strain of coronavirus reported more transmissible in the UK weighted down on global markets on Monday but investors seemingly calmed by reassurances from the U.S health officials that the new strain did not appear more deadly and would likely be treated by the vaccines. 

5. Latest wave of the pandemic might be peaking around the world, along with the efforts of countries procuring vaccines for their people.

Technically, SPX run-up appears extended and overbought after having two-month up in a row, technical retracement or sideway consolidation possible in the coming month(s) due to profit-taking. 

Among the SPX sectors, Financials( XLF) and Technology(XLK) outperformed and are the only two sectors closed in green, helped by further gains in Apple(AAPL), while Energy(XLE) shares lagged. Refer to below major indexes weekly performance table and SPX sector indexes weekly performance table for details.

China/HK

China SSE index ended marginally up after rebound on Friday, despite flareup in Sino-U.S tensions weighed on sentiment. U.S added 58 Chinese companies and 45 Russian companies to its "Blacklist". 

Separately, Alibaba(BABA) was targeted by China's anti-monopoly probe. The world's largest financial technology company share price plunged 15% in the week, it has dropped 30% since its peak on Oct 26 so far. 

Singapore

STI has been muted in the holiday-shortened week within its 5-week sideway consolidation trading, with a bullish bias. The index was the worst performer in my focused major indexes table below, losing 11.8% YTD. However, it's expected the index will play catchup next year as Singapore already secured and will be the first Asian country to start the first vaccine doses, its export-oriented economy also expected to recover next year. 

Stocks Continue to Grind Out All-Time Highs

 Summary of content for the week of  Dec 18:

1. Week 51 major indexes performance;

2. Week 51 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

U.S

U.S stocks reached new highs on relief hopes as expectations grew for the passage of another coronavirus relief package. Here's what happened and expected:

1. A relief bill worth $900 billion to be closing on the bipartisan agreement.

2. The rollout of the Pfizer-BionTech vaccine seems to bolster market sentiment;

3. Moderna's approval given by FDA, which would nearly double doses available by the end of the year;

4. Recovery of the economy is stalling as surging virus cases have incited renewed restrictions and lockdowns, weekly jobless claims hit a three-month high. 

5. Fed's meeting this week will keep its rates low for an extended period. Will continue to buy more than $100 billion in assets per month. Fed's accommodative policy has helped the stock markets to perform well historically. 

Tesla(TSLA) was set to join SPX index on Monday. FSLA hit fresh new high with 6% gain to 695.0 on Friday.  $110 billion shares changed hands on Friday as mutual funds and ETFs adjusted their portfolios. 

Among 11 SPX sectors, Technology(XLK) was the top-performing sector with 3.2% gain while Energy(XLE) lagged despite crude oil geting higher. Refer to below SPX sector indexes weekly performance table for details.

China/HK

Shanghai Composite index(SSE) posted a weekly gain despite recording mild losses on Friday as U.S announced it was blacklisting China's top chipmaker and more than 60 other companies into its so-called Entity List. Even so, demand for Chinese assets has stayed resiient amind ample evidence that the economy is firmly recovering after being the first country to contain the pandemic. HSI index has recovered most of its losses early in the week and closed flat. 

Singapore

STI closed rebounded after the last two-week retracement. The index still losing 11.6% YTD and is still "cheaper" as compared to other regional markets, analysts expected the Singapore share will continue rebound to catch up and narrow the gap going into the next year 2021. Immedite technical resistance is the gap between 2890-2960 area. 

Vaccine, Virus and X'mas Rally

 Summary of content for the week of  Dec 11:

1. Week 50 major indexes performance;

2. Week 50 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

U.S

U.S stocks closed the week lower, the SPX ended its two-week up streak, in a rather mixed set of headlines and economic data. Major markets focus:

1. Bipartisan talks on fiscal stimulus continue to drag on;

2. Likelihood for a no-deal Brexit;

3. Pfizer/BioNTech vaccine nears distribution, could begin as early as the next week;

4. Daily U.S deaths from the virus crossed 3,000 for the first time. States re-instated stay-at-home orders;

5. Consumer sentiment in Dec surprised forecast and marking its 2nd-highest level since the onset of the pandemic

Among the SPX 11 sectors, Energy(XLE) was the only sector that closed positive with 1.2% up for the week, as Brent Oil price crossed US$50 per barrel for the first time since the onset of the pandemic. Financials(XLF) and Real Estate(XLRE) were laggers. Technically, all three major U.S indexes uptrend are well intact, with no immediate reversal signal. 

China/HK

China stocks fell this week on renewed tensions with the U.S after a second major index provider removed some Chinese companies from its benchmarks following a Trump administration executive order. Concerns that U.S sanctions will target more Chinese companies outweighed generally positive macroeconomics data. Nonetheless, SSE index has been trading within its multi-month consolidation range with a bullish bias. HSI index trapped within its major uptrend resistance line after the recent rally. 

Singapore

STI index closed down for the 2nd week, the selling appeared under control. Immediate downside support at 2800 level. 

Stocks Close Out Solid November

 Summary of content for the week of  Dec 4:

1. Week 49 major indexes performance;

2. Week 49 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

4. Major Indexes Monthly Performance for November

U.S

U.S major indexes closed into record highs by Friday. The DJI closed out November with its best monthly performance since 1987, with 11.8% gain., while SPX and Nasdaq(COMP) also had one of their best monthly gains with 10.8% and 11.8% respectively. Refer to below major indexes monthly performance table for Nov.

Investors anticipating imminent vaccine arrival and rising hopes for a new round of fiscal stimulus also appeared to boost sentiment as jobs and other economic data show economic recovery slowing down. 

Among 11 major SPX sectors, Energy(XLE) shares bounced back after OPEC and other major oil producers reached an agreement to ease output, while Utilities(XLU) shares lagged. Refer to below SPX sector indexes ETF weekly performance table for details.

Technically, all three major indexes are in a nice steady uptrend, there are no signs of immediate reversals. For technical traders, we will just "Follow the trend until it bends".

China/HK

China Shanghai Composite Index(SSE) posted its third straight weekly gain, aided by solid economic data. 

U.S announces new investment restrictions on Chinese companies and newly added four more state-owned enterprises(SOEs) to their list including 1) Semiconductor manufacturing Internation Corp(SMIC, 0981.HK); 2)China National Offshore Oil Corp(CNOOC, 0883.HK); 3)China Construction Technolgy Co. Ltd; 4) China International Engineering Consulting Corp.(CIECC), the additional four more brings the total number of blacklist firms to 35.

Nevertheless, overseas investors interest in Chinese assets remained buoyant, as evidenced by an increase of foreign buying of Chinese bonds in November, also the renminbi(CNY) continues to appreciate against the USD in currency markets. 

Technically, the SSE index has been trading within its five-month sideway consolidation price range top, bullish bias. The HSI index closed just off 27,000 level after a four-week rally.

Singapore

STI index posts strong monthly gain since 2009, added a remarkable 15.8% in November. On weekly basis, it closed the first week down by profit-taking after a four-week rally. The index appears a lagger with a -12% YTD return, as compared to SPX's 15% and SSE's 13% return. Expected the STI will play catch-up, and more upside room even after Nov's stunning rally. Immediate technical support to watch is 2790 which is its 20dma.

Expecting Post-Vaccine Rebound

 Summary of content for the week of  Nov 27:

1. Week 48 major indexes performance;

2. Week 48 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

U.S

U.S major indexes closed higher in the holiday-shortened week. Most of the indexes hit record highs, with the DJI gaining the most attention by crossing the 30,000 threshold for the first time. 

The ascent to 30,000 was boosting by encouraging vaccine news amid rising cases and renewed shutdowns in certain regions in EU, Asia and the U.S, stock markets gains are reflecting expectations for a post-vaccine rebound next year and beyond.

Major vaccine and political events appeared supportive: 

1. The third announcement on the vaccine was from AstraZeneca(ANZ.O) in the partnership Oxford University that its vaccine  was up to 90% effective;

2. Joe Biden was preparing to nominate former Fed Chair Janet Yellen as Treasury Secretary. Yellen's appointment is welcomed by investors noted her dovish tenure while at the Fed.

3. General Services Administration(GSA) was formally beginning transition measures in preparing for a Biden administration. Trump tweeted that he was authorizing GSA's action "in the best interest of our country".

But Economic data appeared a negative sign. Initial jobless claims rose unexpectedly to their highest level in five weeks, while personal income fell in Oct. 

SPX 11 sector indexes performance. Reopening hopes boosted cyclical stocks, particularly Energy(XLE) and Financials(XLF), airlines and travel and leisure-related stocks also rebounded, while Health care(XLV), Utilities(XLU) and Real Estate(XLRE) lagged. Refer to the below table for SPX sector indexes ETF weekly performance. 

China/HK

Chinese stocks rose for the week as solid economic data outweighed concerns about rising defaults among domestic bond issuers. SSE index rose for 2nd week to near five-week highs, technically bullish bias. HSI index rose for 4th week in a row to just underneath 27,000 level. 

Singapore

Singapore STI rose 4th week in a row to a new high of 2920 since Mar 6, 2020 and off by profit-taking, as there is a gap resistance level at 2959-2892 area. The index appeared to be technically overbought, do expect profit-taking or sideway consolidation in coming week(s). 

                                     

Central Theme Now: Sector Rotation

 Summary of content for the week of  Nov 20:

1. Week 47 major indexes performance;

2. Week 47 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

U.S

U.S major indexes ended mixed for the week ended Nov 20, SPX and DJI finished lower after two-week up in a row but tech-heavy Nasdaq index(COMP) record slight weekly gain. As the incoming positive vaccine news and restriction measures resurface caused by the recent spike in virus cases and hospitalizations, we see this tug-of-war likely continuing between the leaders so far and the economically sensitive investments that have lagged. 

Sectors Rotate: Tech and growth stocks, and also stocks related to "stay-at-home" led the mark since Mar bottom. However, the recent vaccine developments acted as a catalyst for the shift in investment theme, as confidence in economic rebound a matter of time has been strengthened. In the previous two weeks, We see obvious rotation to cyclical sectors such as energy and financials which have been negatively impacted by the pandemic. 

Among 11 SPX sectors, Energy(XLE) outperformed as oil prices rose. Healthcare(XLV) and Utilities(XLU) lagged. Market starts to pay attention to travel and holiday leisure-related stocks such as airlines, cruise ships, and casino stocks. Refer to below weekly sector performance table. 

China/HK

Shanghai SSE index rose strongly to its two-month high after solid economic data, China also signs the Regional Comprehensive Economic Partnership(RCEP) with 14 other Asian countries. The free trade area is the world's biggest accounts for over 30% of the current global GDP. Technically, SSE still trading inside its four-month sideway price top range. 

HSI index also rose to its four-month high, 3rd week consecutive up, next resistance to watch out is at 27000 level. 

Singapore

STI has been exceptionally strong in the past three weeks, added a total of 15.3% as compared to its total loss of 25.7% from the beginning of the year till three weeks ago. Immediate technical resistance to watch at previous high 2839 hit in June. The badly hit airline and related stocks performed the best, such as SIA and SATS.

Vaccine Optismism Prompts Market Rotation

 Summary of content for the week of  Nov 13:

1. Week 46 major indexes performance;

2. Week 46 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

U.S

U.S stocks build on gains following vaccine news. All three major U.S indexes added to the previous week's sharp gains and hit new all-time new intra-week highs, DJI and SPX able to close at new high but Nasdaq closed lower as technology stocks trailed most other sectors. 

Stocks surged on Monday after Pfizer and BioNTech announced that their vaccine had 90% effectiveness, triggering a wave of hope that vaccines will address the coronavirus crisis and accelerate the economic recovery. It's expected mass production and widespread distribution of a vaccine will likely take at least months, and in the meantime the virus cases continue to surge to a new high in the States and many of E.U countries. Thus, do expect market volatility along the way of recovery. 

Market Rotation. The Pfizer news prompted a sharp rally in cyclical shares, especially those of travel and leisure-oriented firms. Energy and banks rebounded, conversely "stay-at-home" stocks such as Amazon and Netflix were sold out.

Among SPX 11 major sectors, Energy(XLE) and Financials(XLF) were the two top-performing sectors this week with 17% and 8% gains. Conversely, Technology(XLK) was the only sector closed underwater this week, losing 0.3%. Refer to below SPX sectors' weekly performance table.

China/HK

Shanghai stocks declined slightly for the week as unfavorable macro news outweighed generally positive corporate earnings. U.S-China relations suffered their latest setback when Trump announced prohibiting Americans from investing in Chinese firms that have ties to the country's military. The list of companies includes China Mobile and China Telecom, whose U.S listed shares fell sharply on Friday U.S trading hour.

China's proposed antitrust laws were the second recent setback for China's top internet companies after fintech company Ant Group's IPO was pulled back on Nov 3. Alibaba(BABA) continued under selling pressure on Friday. 

Technically, SSE index still trading within its 4-month sideways price range, under consolidation with bullish bias as the index is well trading above its 50 and 200 weekly MA. HSI index closed 2nd week up, still in bullish momentum as it closed above 26000-level for the first time since early March this year.

On his keynote speech to Caixin Summit on Friday, the billionaire founder of the world's biggest hedge fund Bridgewater Ray Dalio believes now is "Special Moment" for Markets as China ascends. Foreign flows into China's stocks and bonds market seeing very strong. 

Singapore

STI index rallied for 2nd week, was the best performer for the week(refer to my major index performance table below). It has recorded 11.5% strong gains for the last two weeks, recovered some of its loss but the index still underwater 15.87% YTD, one of the worst-performing Asian indexes. Immediate technical resistance at 2733 level-50weekly MA for the coming week.