Stocks Closed Solidly Higher, Falling Yields in Focus

Summary of content for the week of Jul 9:

1. Week 27 major indexes performance;

2. Week 27 US sector indexes performance;

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

U.S

U.S major indexes finished out a bumpy week, posting solid gains for the 3^rd week in a row. The technology-heavy Nasdaq was the top gainer in the table. Refer to major indexes weekly and monthly performance table below.

Major events on record for the week:

1.    Major driver of the sentiment during the week appeared to be the steep decline in the U.S Treasury yields, the 10-year note hitting a nearly five-month low before recovering somewhat to end the week.

Among SPX 11 sectors, the interest rate-sensitive real estate sector(XLRE) performed best as longer-term Treasury yields decreased sharply. Energy(XLE)  stocks fared worst on concerns that disagreements among major oil producers would result in some violating output restrictions.  Refer to SPX sector indexes weekly performance below.

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

China/HK

China SSE index edged slightly higher for the week. Selling was pronounced in technology stocks amid heightened regulatory risk on reports that Beijing will tighten oversight of U.S.-listed Chinese companies, many of which are in the tech sector, as well as the government’s continued crackdown on domestic tech companies.

On Friday, the People’s Bank of China unexpectedly announced that it would cut its reserve requirement ratio (RRR), the amount of cash most banks must hold in reserve at the central bank. The move will unleash about RMB 1 trillion of long-term liquidity into the economy, according to Bloomberg, and effectively allow banks to increase lending to smaller companies hurt by rising costs.

Hang Seng Index(.HSI) was the worst index performer in the table above. The index gave back all its 2021 gains before rebounded from its 250dma technical support level and recovered somewhat.

Singapore

STI index closed flat for 2^nd week with little change. Its weekly chart in range-bound, with immediate resistance at 3194 recent high and major support at 3104 recent low.