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.