Weekly Wrap Content for the week of Jul 21:
1. Week
29 major indexes performance;
2.
Week 29 US sector indexes performance;
3.
Major indexes weekly charts of support and resistance levels;
U.S.
Key Takeaways:
- For the
week ended Jul 21, 2023, most of the major U.S. equity indexes advanced on
hopes that the tight labor market and moderating inflation would help the
economy avoid a hard landing.
- The
tech-heavy Nasdaq Composite(COMP), however, suffered a modest pullback. The
S&P 500 within 6% of the all-time high, after impressive gain it has had so
far this year.
- Stocks
have rallied sharply off of the October bear-market low, recouping the majority
of the 26% decline between January and October of last year.
- The
latest batch of corporate earnings announcements offered an additional boost. Refer
to major indexes’ weekly and YTD performance table below.
1. Initial jobless claims decline. With initial claims reaching their lowest level since May. Labour market remains in great shape by historical standards, there are early signals that some softness is emerging. Initial jobless claims are one of the credible leading indicators among analysts. The three-week moving average in weekly initial jobless claims is up nearly 20% over the last six months.
2. Earnings remained squarely in focus. About 79% of S&P 500 companies that have reported earnings thus far have topped earnings per share forecasts. Still, we're not even one-fifth of the way through earnings season.
3. Fed rate hikes. Analysts expect the Fed to hike by another quarter point (0.25%) at its meeting on July 26 and hold its policy rate steady over the course of the year.
4. Yield curve (10y treasury yield - 2 year treasury yield) remains deeply inverted, in fact, the most inverted it's been in more than 40 years.
SPX
sectors in play
Seven of
11 sectors within the SPX index closed with gains for the week. Value stocks
outperformed their growth counterparts. Health Care(XLV) and Financials(XLF)
are among top gainers, while Communication Services(XLC) and Consumer
Discretionary(XLY) lagged. Refer to below SPX sectors ETF weekly performance
table.
Technically, Dow rose for the 10th consecutive session Friday, and
the SPX ended with a modest weekly advance. The Nasdaq (COMP) posted a small
weekly drop. The SPX now within 6% of the all-time high. Click below three
indexes for their weekly charts respectively in a new window.
China/HK
China stocks retreated as the latest economic data pointed to
faltering growth. The Shanghai Stock
Exchange Index(SSE) tumbled 2.16%, while the blue chip CSI 300 declined 1.98%.
In Hong Kong, the benchmark Hang Seng Index(.HSI) fell 1.74% ( refer to the
above weekly performance table).
Key highlights for the week and outlook
for China/HK:
1. On a year-over-year basis, China’s gross domestic product expanded 6.3% in the second quarter—below expectations but faster than the 4.5% growth rate recorded in the first quarter. On a quarterly basis, the economy grew 0.8%, down from the first quarter’s 2.2% expansion.
2. The government pledged to improve conditions for private businesses to boost corporate confidence amid the faltering recovery, according to a statement released Wednesday. Separately, Chinese authorities unveiled an 11-point consumption plan to boost household spending.
Technically, both .HSI and SSE index are trading under their major
moving averages- facing downside selling pressure. Click below title to view
weekly charts.
Singapore
The STI index recorded 2nd weekly gains in a row, has
since fully recovered its losses and closed highest since May 2023, though the
index remains largely in its consolidation range this year. It recorded
moderate ytd gain of 0.83%.
Source: Some
contents and data excerpted from various public market reports.
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