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.