Stocks Continue to New Highs on Stimulus Hopes

  Summary of content for the week of  Jan 22:

1. Week 3 major indexes performance;

2. Week 3 US sector indexes performance;

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

U.S

Major three U.S indexes closed new high for the week, despite retreat on Friday. In focus is the $1.9 trillion stimulus plan and worsening coronavirus news, coupled with the vaccine rollout. 

It's expected the bull market has further room to run, though a period of consolidation and short term pullback is highly possible as markets have already priced in improvement in fundamentals. Rising corporate earnings and easy Fed policy are a powerful combination for rising stock markets. 

Among 11 major SPX sectors, five sectors closed positive and six sectors closed in the red. Communication services(XLC) outperformed for the week, boosted by sharp gain in Netflix. Technology(XLK) also very strong. Financials(XLF) and Energy(XLE) lagged. Refer to below sector weekly performance table for details.

This week will see more corporate earning results out. On Wednesday Jan 27, the three heavyweights Apple(AAPL), Tesla(TSLA), and Facebook(FB) will report their earnings. 

China/HK

China's SSE index rallied amid strong economic data and on hopes of warmer U.S-China relations under Biden's administration. China's 4Q GDP growth accelerated to 6.5% yoy, making it the only major economy to regain its pre-virus trend. Both SSE and .HSI weekly charts have had a four-week rally in a row, seen strong buying interests in Chinese stocks, especially Chiese technology stocks, such as Tencent(700hk), Alibaba(9988hk),Meituan(3690hk) etc. Technically both indexes appear to be overbought after a recent rally, expected short-term consolidation or pullback before a further upside move. 

Singapore

STI has a good start this year but it still has far more room for upside to catch up. Immediate technical resistance at 3100, expected the banks and Semicon names will perform better. Semicon globally under huge demand this year, Singapore-related companies such as AEM, UMS, Micro-mechanics etc expected to perform better.