Weekly Wrap Content for the week of Oct 27:
1. Week
43 major indexes performance;
2.
Week 43 US sector indexes performance;
3.
Major indexes weekly charts of support and resistance levels;
U.S.
For the
week of 27 Oct, U.S three major indexes all declined by more than 2% and
finished lower for a second straight week, as market sentiment was dented by
mixed corporate earnings reports and concerns about higher interest
rates—highlighted by the yield on the benchmark 10-year U.S. Treasury note
briefly breaching the 5% level for the first time in 16 years. The S&P 500(SPX)
entered correction territory Friday—having fallen more than 10% from its Jul peak.
Refer to major indexes’ weekly performance table below.
1. Tech giants announced mixed results. Nearly a third of the SPX index companies due to report their quarterly earnings. Market focused on Amazon, Google parent Alphabet, Facebook owner Meta Platforms, and Microsoft which are members of the so-called he “Magnificent Seven” namely the seven mega-cap technology-focused group. Although most metrics reported by the companies showed solid growth and exceeded consensus expectations, markets seemed to pounce on indications of rising expenses, which weighed on shares.
2. U.S Q3 GDP grew at a better-than-expected rate of 4.9%. It was the best showing since the end of 2021 and more than double the level seen in the second quarter.
3. Inflation in check, the core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, provided mixed evidence on whether inflation is moderating. Core PCE increased to 0.3% in September from 0.1% in August, although the year-over-year measure ticked down to 3.7% in September from 3.8% previously. Although the latest data showed inflation remaining well above the Fed’s 2% long-term inflation goal, the central bank is widely expected to hold rates steady at its October 31-November 1 policy meeting.
4. Interest rate. After crossing the 5% threshold on Monday, the yield on the 10-year U.S. Treasury note trended lower and traded around 4.8% at the end of the week.
SPX
sectors in play
All but one out of the 11 sectors of the SPX index closed lower for the week. The typical defensive Utility(XLU) sector added 1.21%, while Energy( XLE) and Communication Services(XLC) were among the worst performers. Refer to below SPX sectors ETF weekly performance table.
The major three U.S stock indexes have been in a losing streak for
three months already, recorded its largest monthly drawdown since beginning of
2020 covid outbreak, the SPX retreated more than 10% from its Jul peak into
correction territory and hit its lowest point in five months. Nasdaq closed
just below its 200dma while SPX and Dow away below it. Click below three indexes
for their weekly charts respectively in a new window.
China/HK
Equities in China rose as an improvement in industrial profits
suggested that the economy may be stabilizing. The Shanghai Composite
Index(SSE) advanced 1.16% while blue chip CSI 300 gained 1.48%. In Hong Kong,
the benchmark Hang Seng Index added 1.32% in the holiday-shortened week. (Refer
to the above weekly performance table).
Key highlights for the week and outlook
for China/HK:
1. Profits at industrial firms in China increased by 11.9% in September from the prior-year period, marking the second consecutive monthly increase, but slowed from the 17.2% rise in August.
2. China’s government authorized the issuance of RMB 1 trillion in additional sovereign debt for disaster relief and construction. It also approved a plan to raise the fiscal deficit ratio for 2023 to about 3.8% of gross domestic product, up from the 3% limit it set in March. The budget changes from the Standing Committee of the National People’s Congress were Beijing’s latest attempt to shore up support for the country’s financial markets and economy, which are struggling amid a persistent housing market crisis.
3. Country Garden Holdings, previously China’s largest property developer, defaulted on its offshore debt payments for the first time after it was unable to meet interest payments at the end of a 30-day grace period.
Click below title to view weekly charts.
Singapore
Singapore STI ended with 0.48% weekly loss. The index had a
short-lived rebound on Tuesday following previous week’s 3.42% selloff but
unable to hold on its gains, ended the week in a range consolidation. UOB bank saw its price nosedived in last
two days, probably due to disappointing earning result, UOB was a big dragger
to STI’s underperformance this week. Weekly top index gainers were Genting Sp
and Wilmar with 4.19% and 2.33% respectively; top loser HKland lost 6.51%.
Source: Some
contents and data excerpted from various public market reports.
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