Weekly Wrap Content for the week of Jan 6:
1. Week
1 major indexes performance;
2.
Week 1 US sector indexes performance;
3.
Major indexes weekly charts of support and resistance levels;
U.S.
For the first
week of 2023, major U.S indexes closed with a gain to start the year, as
markets rallied on Friday following an encouraging jobs report. The S&P 500
Index also continued to move within a relatively tight band compared with most
of 2022, with the index staying between 3,764 and 3,906 since December 16. Refer
to major indexes’ weekly performance tables below.
Key highlights for the year and outlook:
1. Labour market remains resilient. Latest nonfarm payroll reported on Friday shows there were 223k jobs added in Dec, the smallest increase in two years but above expectations. Unemployment rate also moved back down to 3.5% in Dec, matching a 50-year low. Several trends are signaling that the labor market is likely to soften, which some analysts think will produce a milder downturn.
2. Both services and manufacturing activity fall—but so does inflation. Data reported on Friday the ISM’s index of services sector activity fell to 49.6, well below consensus and into contraction territory (below 50) for the first time since May 2020, as new orders slowed sharply.
3. Fed meeting minutes released on Tuesday seemed dampened an earlier rally.
SPX sectors in play
10 out
of 11 sectors within the SPX index closed positive for the week. Communication
services(XLC) stocks led the gains, helped by rallies in Charter
Communications, Netflix, and Facebook parent Meta Platforms. Defensive stocks in Health Care(XLV) sector lagged. Refer to
below SPX sector indexes weekly performance table.
Indexes technical levels
Technically, the three
major indexes closed up in the first week of the year. DJI closed highest in
four weeks, SPX closed highest in three weeks and Nasdaq closed new high in two
weeks. Trading volumes were subdued over most of the week, remaining below 2022
averages. The SPX Index also continued to move within a relatively tight band
compared with most of 2022, with the index staying between 3,764 and 3,906
since December 16. Click to view below the three major indexes’ weekly charts.
China/HK
China and HK stocks rose
amid reports that Hong Kong would reopen its border to mainland China and that
Beijing was considering relaxing curbs on borrowing for the ailing property
sector. The Shanghai Composite Index gained 2.21% and the blue chip CSI 300
Index added 2.82%, marking its biggest gains in weeks.
Hopes of further
support for property developers rose following news that Beijing may ease the
stringent “three red lines” policy that featured prominently in the
government’s crackdown on the real estate sector in 2020, Bloomberg reported,
citing unnamed sources. Separately, the People’s Bank of China announced that
first-time homebuyers would be offered lower mortgage rates if new home prices fall
for three consecutive months.
The changes mark a
significant shift in China’s real estate policy, following a series of measures
introduced since November to restore confidence in a sector that accounts for
almost a quarter of the nation’s economy.
December PMI slumps. the
official PMI data for manufacturing and non-manufacturing fell in December.
Overall, the composite PMI fell to 42.6 from 47.1 in November, marking the
biggest decline since February 2020, before the coronavirus outbreak.
Technically, the Hang
Seng Index had a decisive bullish breakout from its four-week consolidation
range this week, also had a bullish breakout from its two-year downtrend line,
the index closed above all its major averages 20/50 and 200dma, expected
further upside recovery. The SSE index closed just beneath its 200dma and also
its 1-year long downtrend line, a breakout above 200dma would be a bullish sign
and a sign of further rebound.
Singapore
STI index closed 0.78%
higher for the week but still consolidating within its EIGHT weeks tight trading
range between 3314-3222 area, while trading above all major moving averages
(20,50, and 200MAs) which is bullish bias.
Source: Contents/Data including
information from various public market reports
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