Monetary Policy Tightening Eased, Stocks Hit Fresh New Highs

 Summary of content for the week of Jun 25:

1. Week 25 major indexes performance;

2. Week 25 US sector indexes performance;

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

U.S

U.S major indexes finished mostly higher for the week ended Jun 25, recorded solid gains and fresh record highs. The SPX and Nasdaq Composite index hit new highs, while DJI fully recovered its previous week’s loss and very near to its recent high. Refer to major indexes weekly performance table below.

Major events happened during the period:

1.    A US$1.2 trillion infrastructure reached on Friday between the White House and bipartisan group of Senators buoyed market sentiment. 

2.    Fed chair’s testimony to Congress on Tuesday, reiterated Fed’s belief that recent spike in inflation will prove temporary, seems to reassure investors. 

3.    All 23 banks passed the annual stress test, clearing the way for lifting the pandemic-related restrictions on dividends and share repurchases. Analysts looking for dividend hikes in the 3Q, and significant acceleration in share repurchases.

Within SPX 11 sectors, Energy(XLE) and Financials(XLF) were top-performing sectors, while Utility(XLU) 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 added 2.3% for the week, ending a three-week losing streak. Financial stocks led the rally after the People’s Bank of China (PBoC) injected liquidity into the financial system for the first time since February.

Renewable energy names did well after China's National Energy Administration announced that over 50% of rooftop spaces on government buildings would be reserved for solar panels. China now top global clean energy market player, CSOP Asset just launched the first ETF tracking CSI Photovoltaic Industry Index in mainland China. Trading in HKEX, stock code 3134.HK.

Hang Seng Index(.HSI) also reversed its three-week losing streak and closed at around the top of its three-month price range.

Singapore

STI index closed with a modest loss for 2^nd week but still within its five-week trading range from 3104-3194. Singapore's three local banks which account for 40% of the STI index have been in sideway consolidation mode after recent profit-taking. It’s expected the banks will have its pandemic-related dividend restriction lifted this year, which will be positive for bank stocks.

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