Earnings Season in Full Swing and Biden's Capital Gains Tax Hike

 Summary of content for the week of  Apr 23:

1. Week 16 major indexes performance;

2. Week 16 US sector indexes performance;

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

U.S

U.S stocks closed little change with the week ended Apr 23. All three major indexes closed with moderate losses after four-week up streak.

Headlines on possible capital gains tax hike briefly rattle stocks. The proposal would hike the rate to 39.6% from the current 20% rate for those earning more than $1 million per year. Stocks recovered some of their intraday losses as investors seemed to realize that negotiations in Congress would likely make any final tax increase lower than what Biden initially proposes.

Meanwhile, earnings season continued to roll on and figures remained mostly positive. Coming week, market will be focusing on the earning reports for heavy weighted tech FAAMG+T stocks i.e. FB, AAPL, AMZN, MSFT, GOOGL and TSLA, TSLA will be the first to report on Monday.

For the week, among SPX 11 sectors indexes, small Real Estate(XLRE) outperformed and Energy(XLE) and Consumer Discretionary(XLY) lagged. Refer to below SPX sector indexes weekly performance table.

Technically, the three major indexes weekly charts remain in strong uptrend. Refer to below major indexes weekly charts.

China/HK

China SSE index outperformed for the week, with 1.39% gain. Chinese stocks rose steadily since Monday, when mainland equity markets received inflows totaling USD 2.5 billion from Hong Kong via Stock Connect, marking the third-largest single-day inflow from Hong Kong investors. Technically, both SSE and .HSI indexes appear bullish and expected for further rebound.

Singapore

STI index has been in sideway consolidation for last three weeks after six-week up streak. Technical bullish bias with next target level at around 3300 level. 

Stocks Move to New Highs as Earnings Season Begins, Strong Economic Data

 Summary of content for the week of  Apr 16:

1. Week 15 major indexes performance;

2. Week 15 US sector indexes performance;

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

U.S

U.S moved to new highs for the week ended Apr 16. DJI and SPX indexes recorded their 4^th week of gains and the technology-heavy Nasdaq(COMP) index slightly lagged and stayed just beneath its recent high.

Supportive economic and macro data reports:

ü  Consumer spending rebounds. Retail sales soared 9.8% last month compared with February, handily exceeding estimates and marking the second-fastest monthly acceleration in the last 30 years.

ü  Weekly jobless claims came in at 576,000, well below expectations and a new pandemic-era low.

ü  The Consumer Price Index (CPI) rose 0.6% in March from February and increased 2.6% from year-ago levels, the most since 2018.

ü  U.S. Treasury yields fell over the week, with the 10-year Treasury note yield declining to 1.57% from 1.67% the previous Friday.

ü  Corporate earnings growth. As the unofficial earnings season started this week, the overall sentiment seemed to get a boost from banking giants JPMorgan(JPM), Goldman Sachs(GS) and Wells Fargo(WFC).

ü  Vaccine news also appeared to drive sentiment. Markets seemed encouraged by Pfizer’s announcement that it could deliver 10% more of its vaccine by end of May than earlier promised. Modera said its vaccine was more than 90% effective at protecting against COVID-19.

SPX sectors performance. Among 11 SPX sectors, Utility(XLU) and Healthcare(XLV) stocks are among the top performers for the week, while Energy(XLE) and Communication Services(XLC) lagged.

Technically, all three major U.S indexes are in strong uptrending. 

China/HK

China's SSE index fell 0.7% over the week. Asian and Chinese markets were broadly higher Friday following key Chinese economic data. China reported Q1 GDP surged to 18.3% YoY, albeit versus a very low base in 2020 when stringent shutdowns were imposed to contain the initial COVID-19 outlook. 

Technically, SSE has been trapped within its six-week sideway consolidation range and HSI indexes within its five-week price range. 

Singapore

STI has been closed positive in eight weeks( two months) in a row! Very bullish momentum led by the banks. Frasers Logistic & Commercial Trust( Frasers L&C Tr) joined the STI index on Apr 13, replacing Jardine Strategic Holding(JSH) as the latter will be privatized. Technically, STI next major resistance level at around 3300. 

Stocks Hit New Highs on Strong Data

Summary of content for the week of  Apr 9:

1. Week 14 major indexes performance;

2. Week 14 US sector indexes performance;

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

U.S

U.S stocks closed steadily higher to record highs for the week ended Apr 9. The technology-heavy Nasdaq Composite Index(COMP) outperformed the broad market SPX index but stayed below its Feb peak, while DJI and SPX indexes hit record highs. 

Strong Economic Data: Trading got off to a strong start thanks to the previous week's monthly job data for March, which added 916k, well above forecast, and the most since last August. This week's data also surprised on the upside. The ISM report for service sector jumped to its highest level on record, mirroring the ISM's previous week released manufacturing report that has reached its highest level in 37 years. 

Growth stocks handily outperformed value shares, narrowing the performance gap for the year to date. Among SPX 11 sectors, the Technology(XLK) sector outperformed, and Energy(XLE) lagged. Refer to the below sector index ETFs weekly performance table for details.

Coinbase IPO in the coming week. One of the most high-profile public listings to hit the market this year will no doubt be Coinbase Global, the leading cryptocurrency exchange in the U.S. Coinbase(COIN.O) IPO trading will kickstart on Apr 14, Wednesday via a direct listing with no underwriters. Unlike many other IPOs, Coinbase already making a net profit expected approximately $730 million to $800 million for Q1 2021 alone. Click HERE for more info. 

China/HK

China/Hong Kong markets recorded weekly losses, extending several weeks of underperformance against other major global markets. Data indicating higher inflation and elevated U.S-Sino tensions weighed on sentiment and outweighed positive corporate earnings. 

On the corporate front news, China fines Alibaba(BABA/9988.hk) record US$2.75 billion for anti-monopoly violations over the weekend. BABA already under selling pressure for a couple of months since its Ant mega IPO was halted abruptly last November. HK's star tech stocks such as Tencent(700.hk) also under selling pressure after its biggest shareholder selling a 2% stake in the week. 

Technically, both SSE and HSI indexes' major uptrends are still well intact. 

Singapore

STI gained modestly in the week, added 0.09% to record the 7th week up in a row. The index appears losing steam and seen some profit-taking led the local banks. Technical resistance at 3300 and immediate support at 3100-level.

Biden Announced US$2.25 Trillion Infrastructure Plan, SPX Crossed 4000 Level

  Summary of content for the week of  Apr 2:

1. Week 13 major indexes performance;

2. Week 13 US sector indexes performance;

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

4. Major indexes monthly performance for the month of March.

U.S

U.S stocks closed the holiday-shortened week higher(Stocks closed on Friday for Good Friday holiday), capped a strong Q1 2021, with the SPX crossing the 4,000-point mark for the first time ever on Thursday. Among the highlights were the ISM Manufacturing Index jumped to the highest since the early 1980s and Biden's infrastructure proposal. 

Here are the highlights of what happened:

• Biden's Plan, named "American Jobs Plan", proposed $2.25 trillion in new spending over eight years on infrastructure, manufacturing, research and development, and clean energy, among other things. 
• Biden's Administration is proposing a tax plan to raise the corporate tax rate to 28% from 21% to fund the Plan.
• U.S Manufacturing PMI jumped to 64.7 in March from 60.8 in February. Hit 37-year high.
• March nonfarm payrolls rose by 916k as reported on Friday even though the markets are closed, the unemployment rate also declined to 6%. Jobs gains well ahead of estimates for 675k. Good news for markets on Monday. 

Technically, all three U.S indexes are in a strong uptrend. Growth stocks, notably Information Technology(XLK) and Communication Services(XLC) Sectors outperformed. Refer to below SPX sectors ETF weekly performance table. 

China/HK

China SSE index closed 2nd week up, technical bullish after the recent retracement. Sentiment buoyed by the news of an additional tax reduction of RMB 550 billion to consolidate the economic recovery. 

Hong Kong's HSI index ended the holiday-shortened week with a strong recovery after the previous week's selloff. China and HK stocks both were underperformed in March and expected to rebound in the coming month(s). 

Singapore

Singapore STI index had its 6th week up in a row, with a strong March close which added 216.30-point or 7.3%, the most outperformed index. Refer to the below major indexes monthly performance for the month of March. Technically, STI next major resistance level at 3300 and support at 3100.