Delta Variant, Economy “Peak” Earnings, Stocks Higher

Summary of content for the week of Jul 23:

1. Week 29 major indexes performance;

2. Week 29 US sector indexes performance;

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

U.S

For the week of end of Jul 23, U.S major indexes closed at record all-time highs, rebounding decisively from Monday’s 700-point drop in the Dow and “market sell-off” headlines. It’s a wild volatile week. The advance was somewhat narrow, however, with much of the gains concentrated in technology and internet-related giants—the so-called FAANG+ stocks, i.e., Facebook, Apple, Amazon, Netflix, Google, Microsoft. The three indexes posted the fourth weekly gain in five. Refer to major indexes weekly and monthly performance table below.

The resiliency came after concerns about the global spread of the Delta coronavirus variant and uncertainty regarding if we have reached peak earnings and economic growth rates led to the early week selloff.

Stocks tied to the reopening of the economy, such as cruise operators and airlines, fared particularly poorly. Energy stocks were also especially weak, as oil prices suffered their biggest daily decline since April 2020 after OPEC and other major oil exporters struck a deal to increase output. Among SPX 11 sectors, Communication Services (XLC) outperformed, while Energy(XLE) and utilities(XLU) lagged. 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 higher for the week. No major economic readings were released over the week.

In corporate news, Beijing reportedly plans to exempt Chinese companies listing in Hong Kong from having to first seek approval from China's cybersecurity regulator, Bloomberg reported. The move would effectively encourage companies to have their initial public offerings in Hong Kong over the U.S., where many of the country’s largest tech companies are listed.

Hang Seng Index(.HSI) was the worst performer this week, gave back all its previous week’s gain as tech firms were weighed by fresh concerns about China's crackdown on the sector.

Technically, SSE index was in consolidation range hovering around its 50dma, and .HSI index has been in sideways between its 200dma and 250dma. i.e 27800-27200 level. 

Singapore

STI index stalled this week after previous week’s rally, immediate resistance at 3194 recent high and major support at 3104 recent low.