U.S Stocks Down, China Up

Summary of content for the week of Sep 10:

1. Week 36 major indexes performance;

2. Week 36 US sector indexes performance;

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

U.S

For the holiday-shortened week ended Sep 10, U.S stocks finished four-consecutive days lower, Market concern of the Delta variant and Fed tapering timing persisted. All three major indexes ended down for the week, with the DJI index dropped the most. Refer to major indexes’ weekly performance table below.

Major events:

1.    Softening consumer demand impacted by the delta variant. Payroll gains dropped sharply in Aug seemed to linger around and exacerbate worries about the slowing down in economic rebound.

    2. Inflation worries. The producer prices reported on Friday rose 0.7% MoM, above consensus, indicating inflation comes in hotter than expected.

    3.  Biden’s stimulus plan faces new uncertainties as whether his plan can be passed in Senate.

All 11 SPX sectors ended in the red for the week with the small Real Estate(XLRE) led the declines as longer-term interest rates increased, while Consumer Discretionary(XLY) and Financials(XLF) held up best. Refer to SPX sector indexes weekly performance below.

Technically, the three major indexes' weekly charts remain in uptrend BUT they appear peaking and losing steam after running up without major pullback, the last time the SPX experienced a 5% or more pullback was about a year ago, in Sep 20, when stocks declined 9.6% from highs.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Chinese stocks rose for the 3^rd straight week. The Shanghai Composite Index (SSE weekly chart) gained 3.4%. In Hong Kong, the benchmark Hang Seng Index(.HSI weekly chart) gained 1.2%.

Strong trade data and an unexpected yet reportedly candid phone conversation between the U.S. and Chinese presidents lifted investor sentiment. China’s exports in August increased 25.6% over a year earlier, while imports climbed 33.1%, according to the country’s statistics office. China’s monthly trade surplus rose to USD 58.34 billion in August, up from July’s USD 56.58 billion.

Technically, SSE index rebounded back to its top level hit in Feb this year, with very bullish weekly candlestick. HSI index also closed on its 3^rd week up streak. Much weaker as compare to SSE index, as China’s crackdown on tech giants mainly listed in HK.

Singapore

STI index rebounded after about a month’s retracement and consolidation, led by the banks. Technically, watch out major support level at its 200dma level 3060 and horizontal support 3050( 3060-3050 support level) in short run.

STI weekly chart.