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Sunday, October 8, 2023

Stocks Mixed on High Bond Yield and Jobs Data

Weekly Wrap Content for the week of Oct 6:

1. Week 40 major indexes performance;

2. Week 40 US sector indexes performance;

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

U.S.

For the week of 6 Oct, U.S three major indexes mixed over another week of top-heavy trading in which large-cap growth stocks—and the mega-cap information technology and internet stocks. The surge in bond yields has been in complete control of market moves recently, with rates rising and stocks pulling back. With strong economic data instigating worries over upcoming Fed decisions, the path of least resistance may be higher bond yields for a while longer. This week brings the one-year anniversary of 2022's bear-market low.  Refer to major indexes’ weekly performance table below.

Key highlights for the week and outlook:

1.    Bond yield surged to 16-year highs. Ten-year yields moved above 4.89% last Friday, a rate last seen in 2007. The surge in bond yields has been in complete control of market moves recently, with rates rising and stocks pulling back. 

2.    September’s job report released on Friday showed the non-farm payrolls 336k far exceeded expectations of 170k and accelerated from the pace of last few months. Rates jumped and stocks dipped in response, as this did little to ease the cautious outlook around the Fed and inflation.

SPX sectors in play

Three out of the 11 sectors of the SPX index closed positive for the week. Within the index, growth stocks clearly outperformed. Large-cap growth stocks outperformed their value counterparts. Technology(XLK), Communication Services(XLC) leading. Energy(XLE) stocks, on the other hand, lagged. Refer to below SPX sectors ETF weekly performance table.


Indexes technical levels

The three major indexes mixed for the week. The SPX closed first week positive in five-week time and Nasdaq rebounded for 2nd week. On the other hand, Dow closed lower five weeks in a row. Click below three indexes for their weekly charts respectively in a new window.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart


China/HK

Financial markets in China were closed last week for the Mid-Autumn Festival and National Day holiday and will reopen Monday, October 9. The Hong Kong Stock Exchange resumed trading last Tuesday, and the benchmark Hang Seng Index declined 1.82% for the holiday-shortened week. (Refer to the above weekly performance table).  

Key highlights for the week and outlook for China/HK:

1.    Factory productions picks up for first time in six months. Latest official data released on Sat (Sep 30) shows China's factory activity expanded for the first time in six months in September, adding to a run of indicators suggesting the world's second-largest economy has begun to bottom out. China Sept manufacturing PMI 50.2 vs 49.7 in Aug; non-manufacturing PMI 51.7 vs 51.0 in Aug. 

2.    Domestic activity in China picked up significantly during the eight-day holiday. Approximately 395 million trips were taken via road, rail, air, and waterways in the first four days of the holiday, almost 76% above the prior year period, according to the Ministry of Transport. Box office sales reached RMB 1.2 billion in the first three days, ahead of sales reported a year earlier. Meanwhile, the offshore gambling hub of Macau received more than 160,000 visitors from mainland China and Hong Kong on Saturday, marking the highest single-day total since the pandemic. 

3.    China’s crisis-hit property sector showed slight improvement in September.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index was down 1.34% for the week. The index tested 3230-3250 key support area and rebounded on Friday. has been in five weeks consolidation in the range of 3290-3189. There were 4 out of 30 stocks recorded positive weekly return in the STI index. Top gainer SIA+1.39%, CDL, OCBC and SGX also recorded moderate weekly gains. The worst performer was Seatrium with 8.21% loss.

STI weekly chart

Source: Some contents and data excerpted from various public market reports.

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