Stocks Up, Markets Finish Off May Positively

Summary of content for the week of May 28:

1. Week 21 major indexes performance;

2. Week 21 US sector indexes performance;

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

U.S

U.S major indexes finished up for the week ended May 28, bringing the broader SPX index to within 0.5% of the all-time intraday high it hit on May 7 and ended the month with a small gain, SPX added 1.16% for the week. Nasdaq(COMP) index performed best with 2.06% weekly gain and DJI added 0.94. U.S trading volumes were light ahead of long weekend as Monday May 31 is a holiday. Refer to major indexes weekly performance table below.

Major events happened during the period:

1.    Weekly jobless claims fell more than consensus expectation, to a new pandemic-era low of 406k. Positive for stocks. 

2.    Republicans proposed US$928 billion counteroffer to President Joe Biden’s latest proposal of US$1.7 trillion.

Within SPX 11 sectors, Consumer Discretionary(XLY) and Communication Services(XLC) performed best, Facebook and Google parent Alphabet helped communication services stocks outperform within the S&P 500, and a rebound in Tesla boosted consumer discretionary shares. Utilities (XLU) and Healthcare(XLV) lagged. Refer to below weekly sector indexes for details.

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

China/HK

China SSE index rose strongly, SSE index posting best weekly gain in more than three months. In an effort to reduce financial risks, policymakers promised zero tolerance for commodity speculation and further cracked down on cryptocurrency mining.

Data shows funds flowing into China equities via China-HK Stock Connect hit US$3.4 billion on Wednesday, among the largest-ever daily net inflows. Mainland funds were active in buying HK listed blue chips as well such as HKEX(388hk) and tech giant Tencent(700hk).

Hang Seng Index gets overhaul: The .HSI index revamp first step will expand the benchmark from 55 to 58 names, with the addition of auto and battery maker BYD(1211hk); real estate Country Garden(2007hk) and solar panel glass maker Xinyi Solar(968hk) effective on Jun 7. The HSI will add five new stocks each quarter, expanding to 80 in total by mid-2022, when it will cover around 71% of the Hong Kong stock market (versus 57% today). The overhaul of the HSI, first announced in March, reflects the growing influence of China’s tech giants and a bid to increase the index’s relevance since its creation in 1969.

Both China SSE and .HSI indexes weekly charts are bullish, especially SSE index which is the best performer with 3.28% gain.

Singapore

STI index recorded its 2nd-week rebound streak, as the no. of Covid-19 cases appear to be stabilised over the past two weeks. Malaysia announced total nationwide lockdown from 1-14 as Covid-19 cases hit a new record, expected to have minimum impact on Singapore as the government already tightened up border control for all international travelers into Singapore.

STI weekly chart in range-bound, immediate resistance at 3237 recent high and major support at 3024.