Expected "Goldilocks" Election Result Drives Rally

Summary of content for the week of  Nov 6:

1. Week 45 major indexes performance;

2. Week 45 US sector indexes performance;

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

U.S

U.S stocks recorded their best weekly gain since early Apr as investors reacted to the increased possibility of a divided government, including a potential Biden win and continued Republican control in the Senate. The final results are still unknown as of Saturday. However, market began to price in the scenario of a SPLIT GOVERNMENT that potentially reduces the likelihood of immediate tax hikes and increased regulations, while not removing the potential for an agreement on some form of fiscal-aid package.

Jobs data released on Friday was better than expected in Oct, showed that economy recovery is still on track despite election uncertainties, rising virus cases.

A strong week globally, the SPX index had a V-shape rebound with 7.3% gain for the week, fully recovered its past three-week losses, and closed near its peak in one month. Tech heavy-weighted Nasdaq index(COMP) was the best weekly performer with a 9% gain. All major indexes except Shanghai (SSE) had a handsome gain of more than 6% for the week. Refer to the below major indexes weekly performance table below.

Among SPX sectors, Technology(XLK) was the best performer with 9.7% weekly gain, and Energy(XLE) recorded the least gain with 0.7%. Refer to the below sector indexes performance table.

China/HK

Chinese stocks advanced as a potential Biden win raised the outlook for improved U.S-China relations. A Biden win was widely expected as a positive sign for Asia as commented by DBS analyst- more predictable economic and political policies. As we emphasized in past posts, markets hate uncertainties. 

China PMI data reports also added evidence its economy's rapid recovery from the coronavirus. Technically, SSE index still trapped inside its multi-month sideway price range since Jul, and .HSI rebounded to its 4-month top, immediate technical resistance at 26000 level. 

Singapore

STI index had its best weekly gain since Jun, added 154.84pts or 6.4% this week. immediate technical support at the 2540-2520 gap support area.