Stocks Hit Record New Highs

Summary of content for the week of Aug 27:

1. Week 34 major indexes performance;

2. Week 34 US sector indexes performance;

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

U.S

For the week ended Aug 27, U.S stocks finished higher. The tech-heavy Nasdaq index outperformed the broad market SPX and the large-cap DJI indexes. Refer to major indexes’ weekly performance table below.

Major events:

1.    Monday’s news about the Full FDA approval of Pfizer vaccine boosted sentiment early in the week.

2.    Thursday, stocks fell as an attack at the Kabul airport in Afghanistan amid U.S military’s withdrawal from the country resulted 13 U.S. soldiers death and at least 18 others troops were wounded

3.    Three Fed presidents expressing support for a faster start to tapering bond purchases weighed on sentiment.

 4.    On Friday, Fed Chair’s Jackson Hole speech turns out to be nonevent, as Powell did not signal any deviation from the central bank’s recent assessment of economic conditions or outlook for removing policy accommodation.

5.    The week’s economic data releases were generally positive. Jul’s existing home sales rose 2%.

 Among 11 major SPX sectors, Energy(XLE) jumped higher as crude oil prices gained about 10% for the week. Utilities(XLU) lagged. Refer to SPX sector indexes weekly performance below.

Technically, the three major indexes weekly charts remain in uptrend.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Chinese stocks continued to recover from their late-July lows. The Shanghai Composite Index (SSE index weekly chart) rose 2.8%.

1.      Early in the week, the People’s Bank of China (PBOC) met with leading financial institutions to urge them to strengthen credit support to the economy.

2.   2.     In regulatory news, the China Securities Regulatory Commission pledged to cooperate with their U.S. counterparts regarding the auditing of Chinese companies that trade in the U.S.

3.   3.    Separately, China sought to clarify misconceptions over the term “common prosperity,” a slogan recently emphasized by President Xi Jinping amid a crackdown on the technology sector. The term refers to a long-term goal that involves economic growth, wages, taxation, and income distribution and is not aimed at privately owned internet platform companies, according to a senior Communist Party official.

4    4.    On the coronavirus front, China’s daily cases dropped to single-digit levels following tough measures in recent weeks.

In Hong Kong, the benchmark Hang Seng Index(HSI weekly chart) bounced back 2.3% after dipping into bear’s territory last week as it lost more than 20% from its peak earlier this year. Immediate key level to watch is 25000.

Singapore

STI index fell for 3^rd week consecutively, it appears bearishness sign on its daily chart, expected it will bounce following Wall Street’s strong lead on Friday, if not, further downside support at 3040-200dma level.

STI weekly chart.

 

Taper, Delta Concern, Stocks Lower

Summary of content for the week of Aug 20:

1. Week 33 major indexes performance;

2. Week 33 US sector indexes performance;

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

U.S

For the week ended Aug 20, U.S stocks finished lower but not before the SPX index reached a new record high of 4480 on Monday, more than double its low of 2192 on Mar 23, 2020. Refer to the major indexes weekly performance table below.

Major events for the week:

1.    Fed meeting minutes revealed that discussions around reducing bond purchases (the tapering) have gained steam among Fed members. All eyes will be on Chairman Powell's speech at the central-bank symposium in Jackson Hole coming Friday. 

2.    Retail sales slumped 1.1% in Jul as reported on Tuesday, fall more than expected. Worries that growth might be peaking also seemed to hamper sentiment. Much of the decline was concentrated in auto sales, much attributed to the ongoing global semiconductor chip shortage and other supply issues. 

3.    Delta concerns push Treasury yields lower. The 10-year Treasury note touching its lowest level since Aug 5. (Bond prices and yields move in opposite directions.) 

4.    SEC urged caution when investing in Chinese stocks because of regulatory uncertainty as well as disclosure issues.

Delta variant impact has weighed on cyclical-natured sectors within SPX, notably Energy(XLE), Materials(XLB), and Industrials(XLI), are lagged this week. Utilities(XLU) and Healthcare(XLV) outperformed. Refer to SPX sector indexes weekly performance below.

Technically, the three major indexes' weekly charts remain in an uptrend.

DJI click here weekly chart

SPX click here weekly chart

Nasdaq click here weekly chart

China/HK

Chinese stocks slumped as Beijing’s regulatory clampdown on the technology sector stoked uncertainty about what other sectors the government might target next. Liquor stocks slumped after state media reported that the State Administration for Market Regulation was considering new regulations for liquor companies. Health care companies fell on concerns that industry profits would also be curbed by new regulations.

SSE Index (weekly chart) fell 2.5%, refer to the above major indexes weekly performance table.

In Hong Kong, the benchmark Hang Seng Index(weekly chart) fell into a bear market, having lost more than 20% from its peak earlier this year. As of Friday, stock markets of China and Hong Kong lost more than USD 560 billion in market value, according to Reuters.

Technically, SSE is trapped within its four-week trading range and .HSI index pull backed to its low since Nov 2020, gave back all its 2021 gains and the index was down 8.75% YTD.

Singapore

STI index fell along with global markets this week, down 2% to its 3100 support level.

STI weekly chart.

Biden’s Infrastructure Bill Passed, Stocks Edged Higher

 Summary of content for the week of Aug 13:

1. Week 32 major indexes performance;

2. Week 32 US sector indexes performance;

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

U.S

For the week of Aug 13, U.S stocks finished another relatively quiet session higher, just close to flatline after August’s consumer sentiment unexpected fell to the lowest level since 2011, a reading at 70.2, largely fell short of the forecast 81.2. The drop in sentiment came amid dampened confidence across all aspects of the economy, as the resurgence of COVID-19 new Delta variant as a primary culprit. Cyclical/value stocks, outperformer technology/growth stocks, while DJI(weekly chart) and SPX(weekly chart) closed positive and Nasdaq(weekly chart) squeezed out gains. Refer to major indexes weekly performance table below.

Major events happened in the week:

* Senate Passes $1 trillion bipartisan infrastructure bill Tuesday. Senate Democrats also approved a $3.5 trillion budget resolution without Republican’s votes. 

2.    *Jul CPI increased by 0.5%, decelerate from the 0.9% in June. This slowdown in the inflation rate appeared to align with Fed’s narrative that increases in consumer prices should prove transitory.

***Michigan Consumer Sentiment for Aug fell unexpected to 70.2, the forecast is 81.2.

Within SPX sectors, Materials (XLB) and Comsumer Staplers (XLP) outperformed while Energy(XLE) lagged. Refer to SPX sector indexes weekly performance below.

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

China/HK

Mainland China stocks recorded modest gains despite worries that increased government oversight of the country’s technology and private education industries would spread to other sectors. SSE index (weekly chart) gained 1.7%, refer to the above major indexes weekly performance table.

China maintains “zero tolerance” coronavirus policy. Beijing has adhered to a "zero tolerance" policy of mass testing, tracing, and lockdowns in response to the delta coronavirus strain.

Technically, both SSE and.HSI index(weekly chart) bounced for 2^nd week in a row. SSE index largely in sideway consolidation in its Feb-Mar 21 range, and.HSI index appears stablising after the Jul slump.

Singapore

STI index(weekly chart) appears very resilient and consolidated in a tight range over past two months. Immediate resistance at 3194 recent high and major support at 3104 recent low. With bullish bias.

Payroll Grow Beat Expectation, Stocks Hit New Records

 Summary of content for the week of Aug 6:

1. Week 31 major indexes performance;

2. Week 31 US sector indexes performance;

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

U.S

For the week of end of Aug 6, U.S all three major indexes finished hitting new record highs, with the latest jobs report reflecting the broadly favorable fundamental backdrop. Refer to major indexes weekly performance table below.

Major events happened in the week:

1. July nonfarm payroll report tops forecasts. Nonfarm payrolls rose by 943k jobs in July, compared to estimate of an 858k rise. 

2.    The unemployment rate fell to 5.4% from June's 5.9% rate, compared to expectations of a decrease to 5.7%.

Better job report provided some optimism, but also uncertainty over what it could mean for future Fed tapering. Within SPX sectors, a sharp rise in longer-term interest rates following Friday’s strong payroll report mean higher leading margins for banks(XLF), and the small utilities sector(XLU) also outperformed. Consumer Staplers (XLP)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

Mainland China stocks rose as the previous week’s steep declines attracted some buyers. SSE was the best performer with 1.79% gains for the week. Refer to the above weekly indexes weekly performance table. Domestic investors appeared to avoid market sectors that have recently drawn criticism from the government in favor of areas with strong official support.

China faces coronavirus outbreak. China grappled with its biggest COVID-19 outbreak since the virus appeared in the city of Wuhan in 2019. New Delta variant outbreak that began in late July when a group of airport workers tested positive in the city of Nanjing. 

Technically, the .HSI index bounced this week after two-week consecutive selloff. The index expected to be stabilised around 26000 support level. SSE index bounced above its 50 weekly MA after pervious’ week slump. Technical still bullish. 

                              

Singapore

STI index appears very resilient and consolidated in a tight range over past two months. Immediate resistance at 3194 recent high and major support at 3104 recent low. With bullish bias.

Busiest week of Earnings, China’s Regulatory Crackdown on Mega-cap

Summary of content for the week of Jul 30:

1. Week 30 major indexes performance;

2. Week 30 US sector indexes performance;

3. Major indexes monthly performance for Jul

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

U.S

For the week end of Jul 30, also its final session of July, U.S three major indexes finished with modest losses. It’s the busiest week of corporate earnings reports, economics data, Fed meeting and China’s regulatory crackdown led to a selloff in Chinese equities. There was a lot of push and pull, stocks finished lower but still near all-time highs. Refer to major indexes weekly and monthly performance table below. 

With the 4.3% and 5% weekly drop for SSE and .HSI index, they gave back all their year-to-date(YTD) gains and went underwater by July. SSE lost 5.4% and .HSI lost 10% in the month, while SPX was the best performer with 2.3% gains. Refer to below major indexes monthly performance for July.

Major events happened in the week:

-U.S initial estimate of 2Q GDP reported an increase of 6.5%, much below the 8.5% estimate. Nevertheless, it was the 2^nd fastest pace of growth since 2013. Many analysts pointed to lingering supply chain problems as preventing even stronger growth. U.S GDP has now 0.8% above its 2019 peak before the Covid-19 pandemic outbreak.

2.    -Consumer spending which is about 70% of the GDP, was stronger than expected at 11.8% growth. Good news. 

3.    - Highly anticipated earnings reports from mega-cap techs were solid but their share prices excluding Google, declined. Amazon, Apple, Google, Microsoft and Facebook, which together make up 22.5% of the S &P 500, on average doubled their earnings from last year, according to analyst reports.

Amazon's miss on revenue weighed heavily on its shares, as well as the Consumer Discretionary sector(XLY), which was the worst sector in SPX. Energy(XLE) and Materials(XLB) outperformed. 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

Mainland China stocks slumped after a regulator overhaul of the for-profit education sector proved to be much tougher than investors had expected, and fears of heightened government oversight spilled into Chinese technology, health care, and property stocks.

Both SSE and .HSI indexes dived underwater YTD and were the worst two indexes in my first table of index performance in this post. For Jul, SSE index shed 5.4% and .HSI index declined 10%.

 Under the education policy changes, China banned after-school tutoring companies from being run for profit, raising capital or going public. Moreover, the companies are forbidden from offering school syllabus-related tutoring on weekends and vacation days and giving online lessons to children under six.

Toward the end of the week, stock markets stabilized as regulatory concerns appeared to ease, albeit without a relief rally. The People’s Bank of China pumped RMB 30 billion into the country’s financial system on both Thursday and Friday via seven-day reverse repurchase agreements, Bloomberg reported.

Technically, SSE index broke all major moving averages and trading below its 250dma which is bearish, immediate key technical support at 3330 which it bounced back after Wednesday’s selloff.

For .HSI index, it has tested its 61.8% Fibonacci retracement level at 25000 and bounced back, immediate key technical support level to watch is 25000 level. Refer to its weekly chart below. 

Singapore

STI index was the only index that closed positive for the week, it edged higher for five consecutive week in a row. The index appears very resilient and consolidated in a tight range over past two months. Immediate resistance at 3194 recent high and major support at 3104 recent low.