Headlines Focus on Fed’s Hawkish Outcome, Cyclical Stocks Fell

Summary of content for the week of Jun 18:

1. Week 24 major indexes performance;

2. Week 24 US sector indexes performance;

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

U.S

U.S major indexes finished another week solidly lower for the week ended Jun 18, with DJI and SPX recorded sharply weekly losses and the technology-heavy Nasdaq erasing its gains for the week. The DJI includes many cyclical companies mostly are reliant on economic growth. On the other hand, the Nasdaq(COMP) posted a much more modest loss. Refer to major indexes weekly performance table below.

Major events happened during the period:

1.    Fed’s Jun 15-16 meeting outcome came in as surprisingly hawkish. Fed officials have begun to discuss slowing the central bank’s bond purchases(stimulus), the first step toward eventually raising interest rates. 

2.    Fed signaled that it anticipates two rate hikes by the end of 2023, indicating a faster pace of tightening than in earlier projections.

Within SPX 11 sectors, Large-cap stocks help up better than small-cap. Growth stocks easily outperformed value as investors sold companies in the energy and financials sectors amid fears that the Fed will remove its accommodative policies and raise rates sooner than markets had anticipated. Technology(XLK) outperformed, and Financials(XLF) and Materials(XLB) 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 fell for a third week. New energy vehicle (NEV) stocks rallied on Friday after an official at the 2021 China Association of Automobile Manufacturers projected that the NEV share of new vehicles would increase from 20% to 30% within five to eight years. Industry data showed a NEV penetration rate of 12.0%, a historic high, while domestic NEV sales in May jumped 8.3% from April and more than doubled from a year ago.

Hang Seng Index(.HSI) also fell for third week as well but have recovered most of earlier losses in the week as stocks rallied on Thu and Fri. Immediate major technical support to watch 28000.

Singapore

STI index closed with modest loss this week but still within its four-week trading range from 3104-3194. Singapore will relax its COVID-19 restriction slightly from coming Mon Jun 21 onwards, allowing up to two-person dining in, among other measures.

STI weekly chart in range bound, immediate resistance at 3194 recent high and major support at 3104 recent low.