Stocks Hovered Near Record, Inflation Soars, Bond Yield Fell

Summary of content for the week of Jun 11:

1. Week 23 major indexes performance;

2. Week 23 US sector indexes performance;

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

U.S

U.S major indexes finished mixed for the week ended Jun 11, a sharp decrease in longer-term yields appeared to help push the SPX index to a record high. The declined in yields favoured growth stocks by reducing the implied discount on future earnings while weighing on financials by threatening banks lending margins. The tech-heavy weighted Nasdaq outperformed and recorded its 4^th week up in a row, while DJI recorded a modest loss. Refer to major indexes weekly performance table below.

Major events happened during the period:

1.    Interest rate and inflation seemed to continue to dominate sentiment. Fed assured they would keep monetary policy highly accommodative for “some time” and that the recent spike in inflation would prove temporary. 

2.    Core Consumer Prices( CPI) reported on Thursday to reach a 13-year high of 5%. 

3.    Senate reached a deal on an infrastructure plan include US$762 billion in new spending, significant less than US$2 trillion Biden originally requested, this plan would not raise corporate taxes.

Within SPX 11 sectors, Health Care(XLV) stocks outperformed. Financials(XLF) 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 second week. News that the authorities in Guangzhou renewed COVID-19 controls in the face of a fresh outbreak in the week. In response, Macau banned nonresidents from entering via neighboring Guangdong province, causing casino stocks to weaken.

China’s Producer Price Index(PPI) rose to 9% yoy from 6.8% in April due to higher commodity prices. 

Hang Seng Index(.HSI) fell for 2^nd week as well but consolidating within its three-week price range. Immediate technical support at 28700 level.

Singapore

STI index closed with modest gain this week. Singapore shares gained ground this week after government announced to easy Covid-19 restrictions from next Mon onwards.

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