Stocks Make Solid Gains in a Holiday-Shortened Week

Weekly Wrap Content for the week of Dec 24:

1. Week 51 major indexes performance;

2. Week 51 US sector indexes performance;

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

U.S

One week left to wrap up the year of 2021.

In the holiday-shortened week of Dec 24, all three major equity indexes closed higher, as the S&P 500 registered a fresh record closing level in the last session of a volatile, holiday-shortened week. Investors tried to shake off omicron concerns as some studies suggested it may be less severe than its brethren, and following additional COVID-19 treatments which were granted U.S. Food and Drug Administration (FDA) emergency use authorization. Refer to major indexes’ weekly and monthly performance tables below.

Key highlights for the week/coming week:

1.    Further evidence that omicron is milder; new treatments approved. U.S. FDA granted emergency authorization to Pfizer’s and Merck’s pills for the treatment of COVID-19. 

2.    Inflation worries may have peaked. The week’s economic data generally surprised on the upside. Durable goods orders rose 2.5% in November, well above consensus expectations and the best print since May. U.S Q3 GDP was adjusted modestly higher. 

3.    Some signs also indicated that hopes remained for the White House’s fiscal stimulus plan. Reports surfaced that Senator Manchin and the White House had been very close to reaching a deal.

SPX sectors in play

Among the 11 SPX major sectors, consumer discretionary(XLY) and technology(XLK) outperformed as economic prospects brightened, while the typically defensive utilities(XLU), and consumer staples(XLP) segments lagged. Refer to below sector indexes weekly performance table.

Technically, all three major indexes uptrend was well intact.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) slipped 0.39%, while a well-telegraphed key rate cut by the central bank for the first time in 20 months. On Monday, the People’s Bank of China (PBOC) cut the one-year loan prime rate (LPR) for the first time since April 2020, while keeping the five-year LPR unchanged.

Hang Kong(.HSI weeklychart) Hang Seng Index reversed from early intra-week selloff to new low since May 2020 and closed marginally higher for the week.

Singapore

STI index(STI weeklychart) closed flat for the week, trading within its four-week trading range with no clear direction ahead of holiday season.

Santa Claus Rally? Not Seen Yet This Year

Weekly Wrap Content for the week of Dec 17:

1. Week 50 major indexes performance;

2. Week 50 US sector indexes performance;

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

U.S

Two weeks left to wrap up the year of 2021, Santa Claus, where are you?

For the week of Dec 17, all three major equity indexes fell, as the prospect of central bank tightening and fears over the impact of the omicron variant of the coronavirus sparked considerable volatility. As longer-term interest rate expectations increased, growth stocks and the technology-heavy Nasdaq Composite Index fared the worst. Refer to major indexes’ weekly and monthly performance tables below.

Key highlights for the week/coming week:

1.    FOMC meeting in the week as all eyes were on, it announced as expected that it will wind down bond purchases at a faster rate, which are now expected to stop by the end of March. 

2.    Interest rates hikes expected to three quarter-point hikes in 2022 instead of two. This is a slightly more hawkish and expected to increase market volatility next year. 

3.    Fed Chair Jerome Powell optimistic about growth ahead. Gauges of current economic activity released on Thursday came in modestly below expectations but still indicated robust expansion, while housing market indicators surprised to the upside. 

4.    Omicron fears appeared to grow later in the week. Stocks sold off on Friday morning, but the declines may have been cushioned by growing evidence that omicron, while much more contagious, causes less severe symptoms than prior variants.

SPX sectors in play

Among the 11 SPX major sectors, Energy(XLE), technology(XLK), and consumer discretionary(XLY) shares performed worst, while the typically defensive utilities(XLU), health care(XLV), and consumer staples(XLP) sectors managed gains.  Refer to below sector indexes weekly performance table.

Technically, all three major indexes uptrend was well intact.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) fell 0.93%, amid the resurgence in global COVID-19 cases and U.S.-China tensions after Washington placed investment and export restrictions on dozens of Chinese companies for their role in allegedly repressing China’s Muslim minorities and in supporting Beijing’s military.

Early in the week, Beijing pledged economic stability in 2022 at the government’s annual Central Economic Work Conference, which analysts viewed China’s policy statements as dovish overall.

Hang Kong(.HSI weekly chart) Hang Seng Index fell to finish at its lowest close in more than 18 months, as Sino-U.S. tensions weighed on investor sentiment already hit by concerns about the Omicron coronavirus variant, inflation and policy tightening. The .HSI index just dipped below its key technical support level 23200 for the week.

Singapore

STI index(STI weekly chart) closed lower for the week but trading within its three-week sideway range. More or less same as previous week, there is no clear direction for STI in coming week, unless it has broken its sideway range.

Stocks Rebounded on Easing Omicron Worries

Weekly Wrap Content for the week of Dec 10:

1. Week 49 major indexes performance;

2. Week 49 US sector indexes performance;

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

U.S

For the week ended Dec 10, the major equity indexes rebounded, after two weeks of losses, as fears seemed to abate about the new omicron variant of the coronavirus. Most of the benchmarks moved near their record highs, The SPX index recorded its best weekly gain since February. Refer to major indexes’ weekly performance tables below.

Key highlights for the week/coming week:

1.    Weekly unemployment number for previous week dropped to 184k-the lowest since 1969. The number of open jobs in the U.S. also rose much more than expected to a record 11 million, with most of the gains coming in accommodation and food services. 

2.    Nov consumer price index reported on Friday, rising 6.8% on a YoY basis, the biggest jump since 1982. 

3.    FOMC meeting coming week. The pace of tapering will likely increase from $15 billion per month currently, to perhaps close to $30 billion per month.

SPX sectors in play

Information technology(XLK) stocks drove much of the rally, as solid gains in Apple pushed the market capitalization of the world’s most highly valued public company near USD 3 trillion. Shares of financial firms and utilities lagged but still recorded gains. Refer to below sector indexes weekly performance table.

Technically, all three major indexes uptrend was well intact.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) rose 1.6% after the central bank cut the reserve requirement ratio (RRR) for banks and November factory gate inflation cooled, easing inflation concerns. However, worries about property sector defaults and the withdrawal of more U.S.-listed Chinese companies dampened sentiment after ride-hailing app Didi Global said it would delist from the New York Stock Exchange earlier this month.

Hang Kong(.HSI weekly chart) stocks rebounded 1^st week after three weeks down, bulls had relief for now as the .HSI index’s key technical support level 23200 hold for now.

Singapore

STI index(STI weekly chart) closed first week up after two weeks losses, rebounded to close just beneath 200dma 3142 level. Current level, there is no clear direction for STI in coming week.

Stocks Continue Down on Concerns about Taper and Omicron Variant

Weekly Wrap Content for the week of Dec 3:

1. Week 48 major indexes performance;

2. Week 48 US sector indexes performance;

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

4. Major indexes performance for Nov

U.S

For the week ended Dec 3, the major equity indexes pulled back on news that the Federal Reserve could curtail its monthly asset purchases at a faster rate and fears that the emergence of the omicron strain of the coronavirus could weigh on global economic growth and contribute to supply chain disruptions. Growth-related issues such as Information Technology and Consumer Discretionary leading the way southward. Refer to major indexes’ weekly and monthly performance tables below.

Key highlights for the week/coming week:

1.    Powell says Fed may consider tapering bond purchases at faster pace in his testimony before Congress. 

2.    Weaker-than-expected job creation in November. Nonfarm payrolls increased by 210k sequentially in November—well below the 546k positions added in October and less than half of analysts’ consensus estimate.

SPX sectors in play

Large-capitalization stocks outperformed smaller- and mid-cap benchmarks. Out of the SPX 11 sectors, the communication services sector(XLC) gave up the most ground. Utilities(XLE) was the only sector to post a gain. Refer to below sector indexes weekly performance table.

Technically, all three major indexes uptrend was well intact, DJI closed down 4th week in a row, while both Nasdaq and SPX indexes closed 2nd week lower.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

For the week, the Shanghai Composite Index (SSE weekly chart) recorded a weekly gain despite a resurgence of U.S.-China tensions after Chinese ride-hailing app Didi said it would delist its U.S.-listed shares from the New York Stock Exchange. Didi plans to list its shares on the HKEX in three month time then to delist on the NYSE by June next year.

Hang Kong(.HSI weekly chart) stocks tumbled another 3.9%, down three-week in a row, touched its 1-year low this week dragged mainly by the tech sector. .HSI index has been the worst major index performer YTD with -13%, as compare to SPX’s 21% gains. Refer to the above weekly index performance for more info.

Singapore

STI index(STI weekly chart) had broken all its three major technical support i.e the 50/200/250dma in just three session straight earlier in the week, and since recouped part of its losses and closed back above its 250dma(one-year line) at 3090. Immediate key support to watch is at 3040 recent low.