Weekly Wrap Content for the week of Sep 2:
1. Week
35 major indexes performance;
2.
Week 35 US sector indexes performance;
3.
Major indexes weekly charts of support and resistance levels;
U.S
For the
week ended Sep 2, U.S stocks finished solidly lower heading into the Labour Day
holiday weekend, erasing early gains that came in the wake of the August labour
report, and notching a third week of losses. While the report showed job growth
was slightly higher than expected and wage gains moderated, it didn't appear to
cool off some of the elevated expectations about how aggressive the Fed will be
later this month. The S&P 500 Index extended the daily losing streak that
began with Fed Chair Jerome Powell’s August 26 speech at the central bank’s
Jackson Hole conference, widely perceived as hawkish. Refer to major indexes’
weekly performance tables below.
1. Monthly job gains still strong. Friday’s August jobs report showed that the economy added 315k jobs last month, a number seen as solid though down from a revised 526k in July. The unemployment rate rose to 3.7% from 3.5% in July as the labor force participation rate increased.
2. Rates hikes. Fed chairman Jerome Powell told investors at Jackson Hole that the Fed is committed to raising rates and fighting inflation until it "gets the job done." Markets now are still forecasting a 75 basis-point (0.75%) rate hike at the September FOMC meeting and a terminal fed funds rate of close to 4.0%, with expectations of Fed rate cuts removed from mid-2023 forecasts.
3. Bulls’ potential turnaround. Upcoming two key factors: midterm elections and a potential Fed pause in 2023. Midterm elections will be held on Tuesday, November 8th this year. Historically, the period after mid-term elections tends to be positive for markets, regardless of which party wins. Markets expectations for the Federal Reserve to raise rates to 4% by December 2022 and keep rates at elevated levels at least through 2023.
4. Economy still strong. The ISM manufacturing index, which tends to be a good proxy of economic activity in the U.S., came in at 52.8 for August, above expectations of 52.0. A reading above 50 indicates economic activity is generally expanding. The strength of the labor market and the resilience of the ISM manufacturing index point to a U.S. economy that remains healthy and has some cushion to absorb the ongoing interest rate increases.
SPX
sectors in play
All 11
sectors in the S&P 500 fell this week. Value stocks continued to outperform
high-valuation growth stocks, and large-caps held up significantly better than
small-cap shares. Energy(XLE) shares suffered as oil prices declined below USD
90 per barrel for West Texas Intermediate(WTI) crude, the U.S. benchmark. The
growth-oriented technology(XLK) stocks continue suffering from selling pressure
in anticipation of upcoming rate hike this month. Refer to below sector indexes
weekly performance table.
China/HK
China’s stock markets fell
as coronavirus outbreaks in major cities triggered renewed lockdowns and
dampened the economic outlook. The
broad, capitalization-weighted Shanghai Composite Index(SSE weekly Chart)
retreated 1.54% and the blue chip CSI 300 Index, which tracks the largest
listed companies in Shanghai and Shenzhen, slipped 2.04%.
In the southern tech
hub of Shenzhen, most of the city’s nearly 18 million residents were under
virus-related controls amid the most serious outbreak since the spring. In
southwestern China, Chengdu, the capital of Sichuan province, went into
lockdown Thursday with mass testing planned through the weekend. The southern
port city of Guangzhou also imposed restrictions. As estimated by research firm
Capital Economics, 41 Chinese cities, responsible for 32% of the country’s
gross domestic product, are grappling with coronavirus outbreaks, the highest
number since April.
China said it would
implement a landmark audit agreement it struck with the U.S. last month. Both
countries signed a preliminary deal on August 26 that would allow U.S.
accounting officials to review the audit papers of U.S.-listed Chinese
companies, resolving a yearslong dispute that threatened to kick off about 200
Chinese companies from U.S. exchanges.
The official
manufacturing Purchasing Managers’ Index (PMI) rose to 49.4 in August from
July’s 49.0, above expectations but still below the 50-point mark that
separates contraction from growth. Meanwhile, the private Caixin manufacturing
PMI declined to 49.5 in August from 50.4 in July, reflecting the impact of
nationwide power shortages and virus lockdowns. China has room to adjust
monetary policy as stimulus measures to support the economy have been
restrained and consumer inflation is under control, a People’s Bank of China
spokeswoman said.
Hang Seng index (.HSI weekly chart) fell 2.65% this week. Technically, the index has been trapped in
a five-week sideway consolidation range near recent bottom.
Singapore
STI index (STI weekly chart) fell 43.84pts or 1.3% to 3205.69 this week. Technically, the index
closed at its lowest in five weeks, it’s currently still trading in a
short-term downtrend started four weeks ago. Immediate downside support at
3190- around its 50dma level. The trio local banks appear resilient and holding
up well, STI index grinding lower but seems selling is still under control.
Source: Contents/Data including
information from various public market reports
No comments:
Post a Comment