Rising Bond Yield and Leverage Ratio for Banks

 Summary of content for the week of  Mar 19:

1. Week 11 major indexes performance;

2. Week 11 US sector indexes performance;

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

U.S

U.S major indexes continued to move to record highs early in the week(DJI and SPX both registered new highs) but then lost ground as the 10-year bond yield reached its highest level in over a year to a high of 1.75%. Energy stocks fell sharply as crude oil price(WTI) saw its biggest daily drop on Thursday since last summer, seemingly driven by rising U.S inventories and demand concerns.

Financials-the banks fell back on Friday after the Fed announced it was not extending a rule that relaxed the leverage ratio for banks during the pandemic, which expired at the end of the month. The announcement placed significant pressure on the Financial sector.

Statement after the Fed's two-day meeting reiterated its dovish monetary stance, anticipated no rate hikes until 2023, and showed their confidence that the increase in inflation will be short-lived. So on Friday, there was this change of sentiment in the technology and financial sectors. For the week, Communication Services(XLC) led by FB outperformed, whereas the Financials(XLF) and Energy(XLE) sectors lagged. Refer to below SPX sectors weekly performance table for details.

Technically, the three major indexes' weekly charts uptrend still intact.

China/HK

China SSE index underperformed other major markets on Friday and erased the previous four-day gain to end 1.4% down for the week. As negative headlines about the first day's talks at the U.S.-China meeting in Alaska, with each side criticizing the other. SSE index registered 4th week down in a row. However, Hong Kong's HSI index appeared to be stabilizing after a two-week down, recorded a 0.87% gain for the week. Both SSE and HSI weekly charts are still uptrend technically. 

Singapore

STI outperformed this week with a 1.27% gain, refer to below major indexes weekly performance for details, registered its 4th week up in a row. Watch out for the possible rotation back from financials to technology stocks in the coming week(s) as the effect that the Fed will not extend leverage ratio on banks(refer to the above U.S section). Technically, STI immediate major resistance at 3285 and immediate support at 3100 level.