Stocks Make Solid Gains in a Holiday-Shortened Week

Weekly Wrap Content for the week of Dec 24:

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

One week left to wrap up the year of 2021.

In the holiday-shortened week of Dec 24, all three major equity indexes closed higher, as the S&P 500 registered a fresh record closing level in the last session of a volatile, holiday-shortened week. Investors tried to shake off omicron concerns as some studies suggested it may be less severe than its brethren, and following additional COVID-19 treatments which were granted U.S. Food and Drug Administration (FDA) emergency use authorization. Refer to major indexes’ weekly and monthly performance tables below.

Key highlights for the week/coming week:

1.    Further evidence that omicron is milder; new treatments approved. U.S. FDA granted emergency authorization to Pfizer’s and Merck’s pills for the treatment of COVID-19. 

2.    Inflation worries may have peaked. The week’s economic data generally surprised on the upside. Durable goods orders rose 2.5% in November, well above consensus expectations and the best print since May. U.S Q3 GDP was adjusted modestly higher. 

3.    Some signs also indicated that hopes remained for the White House’s fiscal stimulus plan. Reports surfaced that Senator Manchin and the White House had been very close to reaching a deal.

SPX sectors in play

Among the 11 SPX major sectors, consumer discretionary(XLY) and technology(XLK) outperformed as economic prospects brightened, while the typically defensive utilities(XLU), and consumer staples(XLP) segments lagged. Refer to below sector indexes weekly performance table.

Technically, all three major indexes uptrend was well intact.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) slipped 0.39%, while a well-telegraphed key rate cut by the central bank for the first time in 20 months. On Monday, the People’s Bank of China (PBOC) cut the one-year loan prime rate (LPR) for the first time since April 2020, while keeping the five-year LPR unchanged.

Hang Kong(.HSI weeklychart) Hang Seng Index reversed from early intra-week selloff to new low since May 2020 and closed marginally higher for the week.

Singapore

STI index(STI weeklychart) closed flat for the week, trading within its four-week trading range with no clear direction ahead of holiday season.

Santa Claus Rally? Not Seen Yet This Year

Weekly Wrap Content for the week of Dec 17:

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

Two weeks left to wrap up the year of 2021, Santa Claus, where are you?

For the week of Dec 17, all three major equity indexes fell, as the prospect of central bank tightening and fears over the impact of the omicron variant of the coronavirus sparked considerable volatility. As longer-term interest rate expectations increased, growth stocks and the technology-heavy Nasdaq Composite Index fared the worst. Refer to major indexes’ weekly and monthly performance tables below.

Key highlights for the week/coming week:

1.    FOMC meeting in the week as all eyes were on, it announced as expected that it will wind down bond purchases at a faster rate, which are now expected to stop by the end of March. 

2.    Interest rates hikes expected to three quarter-point hikes in 2022 instead of two. This is a slightly more hawkish and expected to increase market volatility next year. 

3.    Fed Chair Jerome Powell optimistic about growth ahead. Gauges of current economic activity released on Thursday came in modestly below expectations but still indicated robust expansion, while housing market indicators surprised to the upside. 

4.    Omicron fears appeared to grow later in the week. Stocks sold off on Friday morning, but the declines may have been cushioned by growing evidence that omicron, while much more contagious, causes less severe symptoms than prior variants.

SPX sectors in play

Among the 11 SPX major sectors, Energy(XLE), technology(XLK), and consumer discretionary(XLY) shares performed worst, while the typically defensive utilities(XLU), health care(XLV), and consumer staples(XLP) sectors managed gains.  Refer to below sector indexes weekly performance table.

Technically, all three major indexes uptrend was well intact.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) fell 0.93%, amid the resurgence in global COVID-19 cases and U.S.-China tensions after Washington placed investment and export restrictions on dozens of Chinese companies for their role in allegedly repressing China’s Muslim minorities and in supporting Beijing’s military.

Early in the week, Beijing pledged economic stability in 2022 at the government’s annual Central Economic Work Conference, which analysts viewed China’s policy statements as dovish overall.

Hang Kong(.HSI weekly chart) Hang Seng Index fell to finish at its lowest close in more than 18 months, as Sino-U.S. tensions weighed on investor sentiment already hit by concerns about the Omicron coronavirus variant, inflation and policy tightening. The .HSI index just dipped below its key technical support level 23200 for the week.

Singapore

STI index(STI weekly chart) closed lower for the week but trading within its three-week sideway range. More or less same as previous week, there is no clear direction for STI in coming week, unless it has broken its sideway range.

Stocks Rebounded on Easing Omicron Worries

Weekly Wrap Content for the week of Dec 10:

1. Week 49 major indexes performance;

2. Week 49 US sector indexes performance;

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

U.S

For the week ended Dec 10, the major equity indexes rebounded, after two weeks of losses, as fears seemed to abate about the new omicron variant of the coronavirus. Most of the benchmarks moved near their record highs, The SPX index recorded its best weekly gain since February. Refer to major indexes’ weekly performance tables below.

Key highlights for the week/coming week:

1.    Weekly unemployment number for previous week dropped to 184k-the lowest since 1969. The number of open jobs in the U.S. also rose much more than expected to a record 11 million, with most of the gains coming in accommodation and food services. 

2.    Nov consumer price index reported on Friday, rising 6.8% on a YoY basis, the biggest jump since 1982. 

3.    FOMC meeting coming week. The pace of tapering will likely increase from $15 billion per month currently, to perhaps close to $30 billion per month.

SPX sectors in play

Information technology(XLK) stocks drove much of the rally, as solid gains in Apple pushed the market capitalization of the world’s most highly valued public company near USD 3 trillion. Shares of financial firms and utilities lagged but still recorded gains. Refer to below sector indexes weekly performance table.

Technically, all three major indexes uptrend was well intact.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) rose 1.6% after the central bank cut the reserve requirement ratio (RRR) for banks and November factory gate inflation cooled, easing inflation concerns. However, worries about property sector defaults and the withdrawal of more U.S.-listed Chinese companies dampened sentiment after ride-hailing app Didi Global said it would delist from the New York Stock Exchange earlier this month.

Hang Kong(.HSI weekly chart) stocks rebounded 1^st week after three weeks down, bulls had relief for now as the .HSI index’s key technical support level 23200 hold for now.

Singapore

STI index(STI weekly chart) closed first week up after two weeks losses, rebounded to close just beneath 200dma 3142 level. Current level, there is no clear direction for STI in coming week.

Stocks Continue Down on Concerns about Taper and Omicron Variant

Weekly Wrap Content for the week of Dec 3:

1. Week 48 major indexes performance;

2. Week 48 US sector indexes performance;

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

4. Major indexes performance for Nov

U.S

For the week ended Dec 3, the major equity indexes pulled back on news that the Federal Reserve could curtail its monthly asset purchases at a faster rate and fears that the emergence of the omicron strain of the coronavirus could weigh on global economic growth and contribute to supply chain disruptions. Growth-related issues such as Information Technology and Consumer Discretionary leading the way southward. Refer to major indexes’ weekly and monthly performance tables below.

Key highlights for the week/coming week:

1.    Powell says Fed may consider tapering bond purchases at faster pace in his testimony before Congress. 

2.    Weaker-than-expected job creation in November. Nonfarm payrolls increased by 210k sequentially in November—well below the 546k positions added in October and less than half of analysts’ consensus estimate.

SPX sectors in play

Large-capitalization stocks outperformed smaller- and mid-cap benchmarks. Out of the SPX 11 sectors, the communication services sector(XLC) gave up the most ground. Utilities(XLE) was the only sector to post a gain. Refer to below sector indexes weekly performance table.

Technically, all three major indexes uptrend was well intact, DJI closed down 4th week in a row, while both Nasdaq and SPX indexes closed 2nd week lower.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) recorded a weekly gain despite a resurgence of U.S.-China tensions after Chinese ride-hailing app Didi said it would delist its U.S.-listed shares from the New York Stock Exchange. Didi plans to list its shares on the HKEX in three month time then to delist on the NYSE by June next year.

Hang Kong(.HSI weekly chart) stocks tumbled another 3.9%, down three-week in a row, touched its 1-year low this week dragged mainly by the tech sector. .HSI index has been the worst major index performer YTD with -13%, as compare to SPX’s 21% gains. Refer to the above weekly index performance for more info.

Singapore

STI index(STI weekly chart) had broken all its three major technical support i.e the 50/200/250dma in just three session straight earlier in the week, and since recouped part of its losses and closed back above its 250dma(one-year line) at 3090. Immediate key support to watch is at 3040 recent low.

Stocks Tumble Amid Covid New Variant Flare-Up

Weekly Wrap Content for the week of Nov 26:

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

For the week ended Nov 26, stocks declined for the holiday-shortened week after Friday’s news about the emergence of a new, potentially more contagious, coronavirus variant in South Africa triggered a sharp sell-off in riskier assets such as equities. Treasury yields decreased on Friday amid the flight to assets viewed as safe-havens. Value stocks held up better than growth companies despite Friday’s selling pressure on stocks related to leisure and travel. Refer to major indexes’ weekly performance tables below.

Key highlights for the week/coming week:

1.    Biden renominates Powell as Fed chair. Powell was widely viewed as less dovish than another candidate Lael Brainard. FOMC meeting minutes from Nov showed that some policymakers advocated for a quicker taper. 

2.    Oil market shrugs off release from reserve. Oil prices actually rose on the news before it plunged 13% on Friday on fears that the new variant will damage demand for oil.

SPX sectors in play

10 out of the SPX 11 sectors closed in red for the week, the only sector closed in positive is Energy(XLE). Travel-related stocks dropped as Asia and Europe reinstated some restrictions, though stay-at-home and some vaccine oriented stocks gained ground. For the week, Consumer Discretionary(XLY) and Communication Services(XLC) were the worst performers. Enrgy(XLE) and Consumer Staples( XLP) holding relatively well. Refer to below sector indexes weekly performance table.

Technically, all three major indexes' uptrend was well intact, DJI index closed down for 3rd week, while both SPX and Nasdaq retreated after hitting intra-week record high.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) ending flat amid U.S.-China tensions and rising economic pressures that raised expectations for supportive government measures. Premier Li Keqiang said that China should step up efforts to stabilize employment, financing, and other key areas and that the government was studying policies on tax and fee cuts, along with some reforms, to support businesses.

Relations with the U.S. remained tense over the status of Taiwan and trade issues. The U.S. Commerce Department issued a trade blacklist naming a dozen Chinese companies that it said supported the military modernization of the People’s Liberation Army. Reports that China’s tech watchdog has asked the management of China’s ride-hailing app Didi Global to delist the company from the New York Stock Exchange due to data security concerns also underscored the depth of mistrust between both countries.

Hang Kong(.HSI weekly chart) stocks tumbled 3.9%, was the worst major index performer for this week. Alibaba’s dual listing counter in HK closed at its lowest.

Singapore

For the year-to-date(YTD), STI has been one of the best Asia performing index with 11.3% YTD return, well above other major regional indexes, refer to the above major indexes weekly performance table. STI index(STI weeklychart) retraced back to close just at its 50dma this week, which is a major support level. Next major support level would be 200dma at 3133 should be drop further. 

Stocks Mixed as Nasdaq Hits Record High

 Weekly Wrap Content for the week of Nov 19:

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

For the week ended Nov 19, the major indexes ended mixed as investors weighed strong economic and profits data against inflation fears, ongoing supply strains, and a rise in coronavirus infections in some regions. Growth stocks handily outpaced value stocks, helping lift the Nasdaq Composite to another record intraday high on Friday. Market activity was generally subdued as the Thanksgiving holiday week approached. Refer to major indexes’ weekly performance tables below.

Key highlights for the week/coming week:

1.    Retail sales jumped 1.7% in October, the biggest gain since March, while September’s increase was revised higher. Signs that the economic expansion was regaining momentum. 

2.    The House narrowly passed President Biden's $1.75 trillion social spending bill, sending it to the Senate. 

3.    Investors await Fed chair announcement-in particular, whether President Joe Biden would reappoint current Chair Jerome Powell or instead promote Fed Governor Lael Brainard, who is widely viewed as among the most “dovish” of Fed officials. 

Sectors in play

SPX 11 sectors performance for the week, Consumer Discretionary(XLY) and Technolgoy(XLK) outperformed, led by solid gain in Amazon shares and rebound in Tesla, while strength in Apple supported technology shares. Energy(XLE) stocks dropped alongside oil prices after China and the U.S. discussed releasing strategic reserves and U.S. inventories rose for the first time in five weeks. Financials(XLF) also weak. 

Technically, all three major indexes uptrend was well intact, DJI index closed down 2^nd week, while SPX and Nasdaq holding well, Nasdaq hit fresh new high.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) edged up 0.6%. Disappointing earnings and revenue from e-commerce giant Alibaba Group Holding for the September quarter topped off a week that saw more negative headlines on the economy amid a scramble from real estate firms to raise funds.

Data released at the start of the week showed that economic momentum stayed weak in October as the real estate downturn weighed on industry. Prices for new and resold homes fell amid deeper contractions in construction starts and investment by developers.

Hang Kong(.HSI weekly chart) stocks tumbled 1.1%, dragged down by disappointing result from Alibaba.

Singapore

STI index(STI weekly chart) closed flat in a very quiet trading week. With a 0.8 per cent trading range, it was the STI's second narrowest weekly range in the past five years, according to SGX.  

Stocks Down on Inflation Concerns

Weekly Wrap Content for the week of Nov 12:

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

For the week ended Nov 12, the major indexes retreated from record highs, as investors confronted data showing the highest inflation in three decades. On Tuesday, the S&P 500 Index registered its first decline in nine sessions, ending its longest winning streak since 2017. The major indexes fell mid of week following news that the consumer price index (CPI) jumped 0.9% in October, well above consensus expectations of around 0.6%. The increase brought the year-over-year CPI increase to 6.2%, the highest since December 1990. Refer to major indexes’ weekly performance tables below.

Key highlights for the week/coming week:

1.    The headline CPI reading came in at 6.2% year-over-year, the highest level since 1990, while the PPI reading was 8.6%, the highest on record since 2010. 

2.    This week’s notable IPO of electric vehicle maker Rivian—the largest for a U.S. company since Facebook’s in 2012.

Sectors in play and what are the stocks to benefit in inflationary environments.

Historically, one of the best hedges to inflationary pressure is to invest in equities, which tend to outpace the rate of inflation over time. Consider this year, for example: While inflation is up 6.2% year-over-year, the S&P 500 is up 24.7%. Value and cyclical sectors like financials, energy and industrials tend to outperform.

SPX 11 sectors performance for the week, the small materials sector(XLB) performed best, seemingly helped by the recent passage of the Biden administration’s USD 1.2 trillion infrastructure bill in the House of Representatives. Consumer discretionary(XLY) shares led the declines in the S&P 500 following a steep fall in Tesla, after CEO Elon Musk announced plans to sell some of his shares. Energy(XLE) shares were also especially week as oil prices backed away from recent peaks. Refer to below SPX sector ETF’s weekly performance table.

Technically, all three major indexes hit fresh record highs, with very bullish uptrend.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) added 1.4% which was the biggest weekly gain in two months, amid speculation that Beijing would announce easing measures to help indebted property companies as the specter of defaults continued to loom over the sector.

The previous week, cash-strapped developer China Evergrande Group averted a last-minute default for the third time in the past month. Property is a key pillar of China’s economy, and worries have grown that the sector’s financial woes could spill into other sectors.

Hang Kong(.HSI weekly chart) stocks climbed 1.8%, the most in three weeks, rebounded after its two-week losing streak.  

Singapore

STI index(STI weekly chart) closed retreated after hitting new intra-week high since Jan 2020, Singapore local banks led the rally and expected to continue outperform in the inflationary environments. 

Stocks Post Fresh Records Following Upbeat Labor Report

Weekly Wrap Content for the week of Nov 5:

1. Week 44 major indexes performance;

2. Week 44 US sector indexes performance;

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

U.S

For the week ended Nov 5, the major indexes finished higher, posting a fifth-straight week of gains, while notching fresh record highs in the process. The moves came following an upbeat October labor report that showed a larger-than-expected increase in jobs created and a decline in the unemployment rate. Refer to major indexes’ weekly performance and monthly performance tables below.

Key highlights for the week/coming week:

1.    Fed November 2-3 meeting. Will begin to wind down(“taper”) its monthly pace of bond purchases, currently at $120 billion, by $15 billion per month. At this pace, the Fed will phase out the purchases entirely by next June. However, last week's message from the Fed calmed some nerves, as Chair Powell reiterated the view that inflation pressures are expected to be transitory (though with less certainty) and that the Fed will be patient on rate hikes. 

2.    Data shows the last Fed tapering in 2013 had little impact on equity markets. While volatility increased as former Chair Bernanke hinted at a step-down in asset purchases, equities performed well during the 10 months of tapering. The S&P 500 rose 9.5%, with the health care, real estate and utilities sectors leading the market gains. 

3.    Nonfarm payroll data released on Friday shows the U.S. economy added 531,000 jobs in October, the most since July and the first upside surprise in three months. 

4.    Expected favorable seasonality could help to add to this year’s tally. Historical data of SPX monthly performance since 1989 shows the two-month stretch between November and December has been rewarding for investors, with above-average equity-market gains and the highest chances of positive returns, at 78% and 81% chances of positive returns, with average gains at 2.1% and 1.6% respectively.

For the week, Technology stocks and small-caps were particularly strong, and growth shares outperformed value stocks. Oil prices dropped from their recent highs after Biden administration officials mentioned the possibility of releasing supply from the strategic petroleum reserve, hurting energy sector stocks. Among 11 SPX sectors,  Consumer discretionary(XLY) and Technolgy(XLK) shares fared best, Financials(XLF) and Healthcare(XLV) lagged. Refer to below SPX sector ETF’s weekly performance table.

Technically, all three major indexes hit fresh record highs, with very bullish uptrend.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) retreated 1.6% as headlines about the beleaguered property sector and a growing COVID-19 outbreak across the country dampened sentiment. Renewed restrictions in many places raised worries about supply chain constraints dampening the country’s growth outlook as infections spiked near a three-month high.

China’s property sector is grappling with a deepening liquidity crisis reflected in a wave of offshore debt defaults, credit rating downgrades, and selling in the stocks and bonds of major developers. Seven of the top 10 China-listed developers by revenue recorded steep declines in profitability in the July-to-September quarter, which has increased pressure on Beijing to support the stressed sector. Kaisa Group Holdings became the latest developer in China’s USD 5 trillion property sector to reveal that it was having debt problems.

On the economic front, China’s official manufacturing Purchasing Managers’ Index fell to a worse-than-expected 49.2 in October from 49.6 in September, below the 50-point mark separating growth from contraction. October marked the second month that factory activity contracted and was the latest sign that the economy was losing steam after a strong recovery from the pandemic.

Hang Kong(.HSI weekly chart) stocks closed with 2^nd weekly loss, and was the worst performing index for the week.

Singapore

STI index(STI weekly chart) closed at a new high since Jan 2020, renewed its strong upward move after the previous week’s pause. Singapore local banks led the rally and are expected to continue to outperform in anticipating rising rates.