Stocks Fell Slightly as Investors Gauging Scale of Slowdown

Weekly Wrap Content for the week of Nov 18:

1. Week 46 major indexes performance;

2. Week 46 US sector indexes performance;

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

U.S

For the week of Nov 18, the U.S stocks gave back a portion of the previous week’s strong gains and closed modestly lower. Dispelled reports of a Russian missile strike on Polish territory sparked a brief sell-off on Tuesday, but trading volumes remained muted for much of the week. Markets will be closed on Thursday, November 24, in observance of the Thanksgiving holiday. Refer to major indexes’ weekly performance tables below.

Key highlights for the week and outlook:                

1.    Rate hikes. Fed officer Christopher Waller commented that Fed has “ a ways to go” before ending rate hikes. It’s expected the Fed will seek to pause its policy rate for an extended period to assess economic conditions.

2.    Cooling Inflation: Tuesday brought some more encouraging inflation data, with core (less food and energy) producer prices in October remaining flat for the first time in two years. 

3.    Labor market remains resilient, while manufacturing slows. Industrial production fell unexpectedly in October, weighed down by weakness in the energy and materials sectors, and a gauge of manufacturing activity in the Mid-Atlantic region tumbled to its lowest level since May 2020. 

SPX sectors in play

Eight out of 11 sectors in the S&P 500 ended green this week. Growth stocks lagged value-oriented shares, which were supported by gains in the consumer staples sector. The energy sector underperformed, however, as European oil and natural gas inventories reached near-peak levels. Consumer Staples(XLP) and Healthcare(XLV) outperformed, while Consumer Discretionary(XLY) lagged. Refer to below SPX sector indexes weekly performance table. 

Indexes technical levels

Technically, DJI index was the strongest among the three major indexes, stays above all major moving averages, while SPX and Nasdaq still below their 200DMAs, especially the techs have plenty room to upside to catch up. Click to view below the three major indexes’ weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China’s stock markets were modestly positive for the week, with the Shanghai Composite Index rising 0.32%, while Hong Kong’s Hang Seng Index performed better, gaining 3.85%.

SSE weekly chart

.HSI weekly chart

Investors appeared to balance enthusiasm over easing COVID restrictions against worries about rising cases. The seven-day average of new cases reached above 16,000 by the end of the week, with authorities recording a seven-month high of over 25,000 on Thursday alone, according to Reuters.

The impact of zero-COVID and the troubled housing sector on the consumer was evident in Monday’s October retail sales report, which showed sharp year-on-year declines in nearly all categories; sales of home appliances fell by over 14%, for example. Nevertheless, investors appeared to remain hopeful about recently announced support measures for the property sector. According to Reuters, officials have unveiled 16 new programs to shore up the property markets, including extending loans to both developers and homebuyers.

Prolonged Biden/Xi meeting raises hopes for cooling tensions. A three-hour meeting in Bali over the preceding weekend between U.S. President Joe Biden and Chinese President Xi Jinping appeared to boost sentiment.

Singapore

STI index was up1.4% for this week, recorded its 4th weekly gain. The rally is quite remarkable led by the trio local banks, added a total of 302.28 points or 10.2% in four weeks’ time, the index has since fully recovered its late Sep to mid Oct losses and formed a “V-shape” rebound. As I mentioned in my previous comment, the STI index immediate resistance level to watch is at around 3300 which is Aug-Sep top. It reached an intra-day high of 3308.30 on Friday and closed off it slightly by profit-taking.

It’s expected there would be high chance of profit-taking after four-week’s awesome run as the index facing a big technical gap between 3300-3340 atop(major resistance), immediate downside support at 3245-its 200dma level as the index trading above all major moving averages.

STI weekly chart

 

Source: Contents/Data including information from various public market reports