U.S Stocks Mixed, China to Launch a New Beijing Stock Exchange

Summary of content for the week of Sep 3:

1. Week 35 major indexes performance;

2. Week 35 US sector indexes performance;

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

4. Major indexes monthly performance for August

U.S

For the week ended Sep 3, U.S stocks headed into the long holiday weekend mixed, Nasdaq and SPX indexes notched yet another record high and the narrow blue-chips focused DJI closed with a modest loss. U.S financial markets will be closed on Monday for a Labour Day holiday. Refer to major indexes’ weekly performance table below.

For the month of August, Nasdaq Composite Index was the best performer with a 4% gain, while Singapore's STI lagged with a 3.5% down. Refer to below major indexes monthly performance table.

Major events:

1. Jobs growth slows in Aug. As reported on Friday, Aug nonfarm payroll grew by 235k, much below the forecast 750k. The impact of the delta variant of the coronavirus in the leisure and hospitality services sectors was clear. The bad news was largely taken as good news, as it seemed to make the Fed less likely to begin tapering asset purchases later this year.

2. Aug U.S services sector activities slowed but remained solidly in expansion territoty.

Among 11 major SPX sectors, Energy(XLE) and Financials(XLF) outperformed this week, while Utilities (XLU) lagged. Refer to SPX sector indexes weekly performance below.

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

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Chinese stocks rose for a second consecutive week. The Shanghai Composite Index (SSE weekly chart) gained 1.7%. In Hong Kong, the benchmark Hang Seng Index(.HSI weekly chart) gained 2%.

1.    Chinese companies posted robust earnings for the June quarter, with a 36% annual increase in earnings per share, according to mainland broker CITIC. Upstream resources sectors saw the strongest earnings growth, followed by new energy vehicles and semiconductors. The consumer, pharmaceutical, and telecom sectors lagged. 

2.    On Thursday, President Xi Jinping announced the launch of a new stock exchange in Beijing. The new exchange is aimed at providing equity financing for small and mid-size enterprises and reflects China’s strong commitment to its capital markets. 

3.    The People’s Bank of China said that it would provide RMB 300 billion in low-cost funding to banks for lending to small and medium-sized enterprises (SMEs).

Technically, the SSE index was trading near its top since May 2021 after two weeks rebound. .HSI index appears much weaker, still within its three-week trading range after two consecutive weeks bounce, as investors are still wary of the top tech stocks crackdown impact, which believed has not ended yet.

Singapore

STI index ended flat after had falling for three weeks in a row, the index was the worst index performer in Aug, lost 3.5%. Technically, expected it will have its support at 200dma level 3050 for the near term.

STI weekly chart.