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.