U.S Stocks Getting New Highs, DJI Gets a Revamp as Apple share Splits

 Summary of content for the week of  Aug 28:

1. Week 35 major indexes performance;
2. Week 35 US sector indexes performance;

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

U.S

Stocks continued to grind higher on largely positive news flow about potential vaccines for COVID-19, as well as better-than-expected economic data readings such as personal income and consumer spending. SPX is up nearly 52% since bear market bottom in March and is up 8.58% YTD(refer to below major indexes weekly performance table). 

2% Inflation Level. Fed Chairman Jerome Powell stated at its annual policy symposium that Fed will allow inflation to run "moderately" above its 2% goal for some time, which means it will not raise the interest rate for the next couple of years. The low-interest environment is generally positive for stock markets. 

Dow Jones Industrial Average(DJI) Gets a Revamp. In its biggest adjustment since 2013, DJI announced that Salesforce.com(CRM), Amgen(AMGN) and Honeywell(HON) will replace Exxon Mobil(XOM), Pfizer(PFE) and Raytheon Tech Corp(RTX) effective Sep 1. The addition of CRM and removal of XOM is the main headline and triggered by Apple(AAPL)'s 4-for-1 stock split. Since DJI is a price-weighted index, the changes will make it more reflective of the current state of the U.S economy, which is more consumer and tech-oriented than industrial based.

AAPL's 4-for-1 stock split will be effective on 31 Aug 2020. Those who bought AAPL on or before 28 Aug will get additional three shares for each one originally holding. Refer to AAPL's Investor Relations FAQ page (Click HERE) for more info.

Large tech firms continued to drive the market's upward momentum. Among 11 major SPX sectors, Communication Services(XLC) and Technology(XLK) outperformed for the week, and Utilities(XLU) lagged. Refer to below SPX sectors indexes weekly performance table.

China/HK

Mainland Chinese stock markets rose for the week. SSE index added 0.68%, and its YTD return is 11.6%-- is the 2nd best performer index after Nasdaq(COMP)'s 30.4% so far. HSI index added 1.2% for the week but has been underperformed with YTD negative 9.8% return, 2nd worst just better than Singapore.

Singapore

Singapore's STI index edged up 0.4% for the week but it's the worst-performing index with YTD negative 21.2% return, far away below its peers. The city-state's export-oriented economy hit hard by COVID-19 pandemic. With a belief that it will recover eventually, we should continue to balance our portfolio to have the local banks, technology and consumer-related top players while waiting for the recovery. 

SPX Marks the Fastest Bear Market Recovery in History

  Summary of content for the week of  Aug 21:

1. Week 34 major indexes performance;
2. Week 34 US sector indexes performance;

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

U.S

SPX index advanced for the fourth straight week. Technology stocks leading the index to a new record high. By common definition, this marked the fastest recovery from a bear market in history according to Dow Jones Market Data. 

Uneven performance. Technology stocks such as Google( GOOGL.O) and Apple(AAPL.O) which are heavy weighting in benchmark indexes were among the best performers. AAPL has 7% weighting in SPX and 8% in the DJI index. AAPL becomes the first company that has crossed U$2 trillion in market capitalization this week, the company announced a four for one split and will be trading ex-date Aug 31,2020. Meanwhile, value sectors such as financials and energy shares recorded declines. Refer to below 11 SPX sector indexes weekly performance table.

China/HK

Mainland China stocks ended the week slightly higher as the postponement of the U.S-China trade deal review. Shanghai SSE index recorded 10.84% YTD return, second-best index after Nasdaq index as shown in my major indexes weekly performance table below. Technically, SSE index has been in sideway consolidation after having a breakout from its major downtrend line. Bulls are in control. 

HSI is just sitting above 25000 level, within its consolidation range. 

Singapore

STI index has been the worst index performer, with negative 21.5% YTD return, a lagger. A lot of room to the upside for it to catch up. Singapore retailers have been net buyer and institutions have been the net seller this year, according to MKES research webinar today Aug 22. Technically, STI's immediate at 2500 then 2400 level. 

SPX Backed to Pre-Pandemic Level, gained 4.4% Year-To-Date

 Summary of content for the week of  Aug 14:

1. Week 33 major indexes performance;
2. Week 33 US sector indexes performance;

3. Gold and Silver Price
4. Major indexes weekly charts of support and resistance levels;

U.S and Global

U.S stocks extended their weekly gain, though it appeared bumpy and very near unchanged mark. SPX rises to within a whisper of its all-time high last seen on Feb 19. So far, the index has rebounded 50% from its Mar lows, but the economy still a long way from recouping its pre-pandemic GDP level. The giant difference was attributed by some analysts as the stocks are forward-looking and reflect future expectations, but economic readings display recent but backward-look activities. While markets appear churning at the top, there are some bearish divergency signals that emerged for now, keep monitoring.

GOLD and Silver

Gold and silver experienced profit-taking, recorded their first week down after 9-week consecutive up. In its latest filing, Warren Buffet's company Berkshire added just a single new stock to his portfolio: Barrick Gold (Code: GOLD.N), read more HERE 

SPX Sector Indexes Industrial(XLI) and Energy(XLE) outperformed this week while Utility(XLU) and Real Estate(XLRE) lagged. 

China/HK

Mainland China stock ended the week broadly unchanged as investors stayed on the sidelines ahead of the U.S-China phase one deal review on Aug 15. It reported on Sat the two sides have decided to postpone the meeting to a future date. 

U.S continues to take action against Chinese big tech companies such as TikTok, Tencent's WeChat and the latest on Alibaba increased uncertainties to HK financial markets.  HSI index rebounded this week after 4-week down in a row.

Singapore

STI recorded 2nd-week rebound in a row. Immediate technical support at 2477-2502 level and upside 2705 level.

Dollar Drops, Gold and Silver up

 Summary of content for the week of  Jul 32:

1. Week 32 major indexes performance;
2. Week 32 US sector indexes performance;

3. US Dollar Index, Gold and Silver Price
3. Major indexes weekly charts of support and resistance levels;

U.S and Global

U.S stock extended the previous weekly gains, DJI played catch-up for the week and was the top performer index with 3.8% gain weekly. Nasdaq hit record new high and SPX just a throw stone away from its all-time high in Feb 2020. U.S economy added 1.76 million jobs in Jul, beating estimates, against negative sentiment on the stalled fiscal stimulus package and the heightened tensions between U.S and China.

Industrial and Financial outperformed. Market rotated to the more cyclical sectors such as Industrial(XLI) and Financials( XLF) from the big tech names in the previous week. Real Estate(XLRE) and Healthcare(XLV) lagged for the week.

USD, Gold and Silver. Dollar Index $DXY continues under downside pressure, mainly due to economic downturn, high level of government debt, and near-zero interest rates. Against the dollar index, Gold and Silver price rallied high. Gold hit a record of $2063 before profit-taking a bit, as investors worry that unprecedented government stimulus would cause a spike in inflation. Another precious metal that might play catch-up is Silver, which started rally since Jul to close at 28.4 this week, but still far away from its peak at 49.85 in 2011. 

China/HK

Mainland Shanghai Composite Index SSE up for 2nd week in a row after data lifted confidence in economic recovery. Technically SSE index has broken u major triangle formation and currently in 5-week sideways consolidation range with a bullish bias. HSI index appears much weaker, fell 4th week and still unable to clear 25000 resistance level. Increased on virus cases and Trump's attack on TikTok then WeChat in the week caused a knee-jerk selling of Wechat parent Tencent(700.HK) to 10% in one point and still down 5% after recovered about half of its loss on Friday. Tencent is the single most weighted stock in the HSI index. 

Singapore

STI dipped below 2500 support level in the week then rebound closed above it, the first week up after 4-week down streak. A good level to consider accumulate some good fundamental blue chips such as the three local banks. Refer to the major index weekly charts below.

Index Weekly Wrap for the Week of Jul 31

Summary of content for the week of  Jul 31:

1. Week 31 major indexes performance;
2. Week 31 US sector indexes performance;
3. Major indexes weekly charts of support and resistance levels;

4. Major indexes monthly performance for July

U.S and Global

U.S stocks closed modestly higher for the week, tech-dominant Nasdaq index led stocks higher, DJI index however closed inched down a little. U.S 2Q GDP released showing the sharpest quarterly decline on record, big tech held earnings spotlight, which reporting results significantly better than expected. However, COVID-19 relief bill was stalled at congress negotiation. 

U.S GDP  US 2Q GDP reported a 9.5% decline( equilalent to a 32% annualized decline), the largest such drop in GDP back to 1947, its 1Q GDP was +0.3%. In comparison, China's 2Q rebounded to +3.2% from 1Q GDP -6.8%. U.S housing remains to be on solid footing, driven by record-low interest rates. 

Earnings The strong getting stronger. Almost half of the SPX 500 earnings derived from sectors are less impacted or even benefit from the pandemic such as tech and healthcare sectors. On the other hand, energy, industrials and consumer discretionary earnings dropped more than 50%. The largest five stocks in SPX 500 i.e. Microsoft, Apple, Amazon, Facebook, and Google now account for about 23% of the index and up 30% on average this year. 

Fed is the key to support stock markets. The Fed vows to do "whatever it takes" to support economic recovery. With ample liquidity and near-zero interest rate for an extended time. I think it's difficult for stocks to drop even headlines news U.S virus cases breaking record on a daily basis. 

Among SPX 11 major sectors, Technology(XLK) outperformed, and Energy(XLE) lagged for the week. Click HERE for more information on XLK ETF available at NYSE ARCA. 

Major Indexes Jul performance Shanghai Composite Index(SSE) outperformed in Jul with 10.9% up and Straits Times Index(STI) was the only one in red with 2.3% down. U.S three major indexes and SSE all recorded 4-month up in a row, HSI recorded 2nd month up straight, STI has been in sideways consolidation mode for 4-month. Refer to the below Index Monthly Performance table.

China/HK

China's official PMI for Jul reported positive figure 51.1 above expansion mark 50 level. Technically, SSE index rebounded for the week, reserving its previous 2-week down. HSI index recorded 3-week down in a row however, the selling appeared moderate with immediate technical support level at 24500. 

Singapore

STI was the worst performer this week with 50pts or 2% down(refer to the below major index weekly performance table). The selloff came in as bad economic data and missed earnings reported, local banks DBS, UOB and OCBC led the selloff as MAS urges them to curb dividend payment. DBS and UOB will be reporting 1H20 earnings results on Aug 6 and OCBC on Aug 7, expected to be watched closely in the week ahead. Technically STI trading just above its major support level 2500, let's see if it can hold in coming week.