Weekly Wrap Content for the week of Sep 23:
1. Week
38 major indexes performance;
2.
Week 38 US sector indexes performance;
3.
Major indexes weekly charts of support and resistance levels;
U.S
For the
week ended Sep 23, U.S stocks recorded a second week of pronounced losses after
Fed revealed that they expected official short-term interest rates to continue
going sharply higher over the next several months. Investors continued to digest Wednesday's third-straight
75-basis point rate hike from the Fed, as well as rate increases from the Bank
of England and Swiss National Bank. The DJI index fell to new intraday lows
since late 2020, while the SPX and Nasdaq Composite managed to stay slightly
above their bottoms in mid-June 2022. The fear index Cboe Volatility Index
(VIX), stayed more firmly below its spring highs but rose sharply at the end of
the week. The technology-heavy Nasdaq Composite Index fared worst for the
second consecutive week and briefly fell to a level more than one-third below
its January record high. Refer to major indexes’ weekly performance tables
below.
Key highlights for the week and outlook:
1. Fed rate hike: The Fed hiked its policy rate by another 75 basis points (0.75%), bringing it to a target range of 3.00% to 3.25% and raised its outlook for potential additional hikes ahead. The Fed moved the goalposts on upcoming rate hikes, catching the markets off guard and increasing fears of recession. Many expect rates to reach 4.50% by the end of the year and stay near there for much of 2023.
2. Bear market territory. The stock market retest 20% bear-market threshold this week, giving back summer gains. SPX index rallied more than 17% from mid-June to mid-August, but falling back below 20% for the week.
3. Interest rates rose to their highest in more than a decade. 2-year Treasury yield rose above 4% for the first time since 2007, the 10-year yield hit an 11-year high.
SPX
sectors in play
All 11
sectors in the S&P 500 ended in the red for 2nd week. Energy(XLE) and
Consumer Discretionary(XLY) fell the most, Energy stocks especially weak as
crude oil price fell below 80 and hit two-month low this week.
Technically all three major indexes recorded 2nd losing streak, with SPX and Nasdaq(COMP) closed just above their Jun low, DJI appears weaker and closed fresh new low since Nov last year.
China/HK
China’s stock markets fell
as global growth slowdown fears gripped investors. The broad,
capitalization-weighted Shanghai Composite Index(SSE weekly Chart) slipped 1.2%
and the blue chip CSI 300 Index, which tracks the largest listed companies in
Shanghai and Shenzhen, dropped 1.9%.
On Friday, the yuan
currency fell to a near 28-month low and traded at 7.1066 per U.S. dollar
versus 7.0185 a week earlier, according to Reuters. The Fed’s aggressive
tightening has boosted the dollar at the expense of the yuan and other emerging
markets currencies this year. China’s surprise decision to lower key interest
rates in August has also fueled the yuan’s slide.
The Asian Development
Bank was the latest to downgrade its growth estimate for China to 3.3% this
year from a prior 4.0% estimate. Beijing’s official growth target this year is
about 5.5%, a level that many economists believe is unattainable.
Hang Seng index (.HSI weekly chart) lost 4.4% this week, closed lowest since November 2011. The
benchmark has now lost 20 per cent from the peak on June 28, enters bear market
as sell-off in Alibaba, Tencent, developers deepens amid rate-hike worries.
Singapore
STI index (STI weekly chart) also lost 1.3% this week. Technically, the index has formed a possible
double top on its weekly chart which is bearish signal, but it would require
the index to break down support at 3198 to form a lower low for confirmation,
in coming week.
Source: Contents/Data including information from various public market reports
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