Strengthen in Economic Data, Inflation Worries and Cut Asset Purchases

 Summary of content for the week of May 21:

1. Week 20 major indexes performance;

2. Week 20 US sector indexes performance;

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

U.S

U.S major indexes closed mixed for the week ended May 21, with the broader SPX index ending modestly lower for 2^nd week and the tech-heavy Nasdaq(COMP) index closed positive for the first week after three-week down. These mixed results likely reflect strength in the U.S. economy, as well as concerns about inflation and the timing of when the Fed might begin to rein in its accommodative policies.

Bitcoin- Bitcoin plunged more than 28% by closing for the week. Bitcoin had been under pressure after a series of tweets last week by billionaire Tesla (TSLA.O) CEO and cryptocurrency backer Elon Musk, reversed plans to accept bitcoin as payment for his electric vehicles.  

In addition, on Friday China cracked down on mining and trading of the largest cryptocurrency as part of ongoing efforts to prevent speculative and financial risks. Bitcoin price has almost been halved now from its peak last month.

Major events happened during the period:

1.    Fed hints it may discuss tapering of asset purchases as minutes from the FOMC meeting in Apr revealed. This is negative for stock market as it will reduce hot money in the markets. 

2.    Flash PMI readings in May shows strength in U.S economy, and inflationary pressure. Flash PMI for service sector climbing to record 70.1 from 64.7 in Apr. Manufacturing PMI advanced to 61.5 from 60.5 in Apr.

Within SPX 11 sectors,  Healthcare(XLV) and Real Estate(XLRE) posted strong gains. Energy(XLE) and Industrials(XLI) lost ground. 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

On Friday, China SSE index gave back all its earlier gains in the week and closed flat. Hong Kong’s.HSI index on the other hand, rebounded for the week after three-week down, with the helping of tech stocks rebound, the HS Tech index recovered all its previous week losses, closed 6% up for the week.

Singapore

STI index rebounded and recovered about half of its previous week’s loss, closed above its 3100 technical support. Technical remain bullish as long the index can hold above its recent low 3024.