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.