Stocks Build on Gains in Light Trading Week

Weekly Wrap Content for the week of Nov 24:

1. Week 47 major indexes performance;

2. Week 47 US sector indexes performance;

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

U.S.

For the week of 24 Nov, U.S three major indexes closed higher for 4^th straight over a quiet holiday-shortened trading week—markets were shuttered Thursday in observance of the Thanksgiving holiday and closed early Friday. The week brought one carefully watched third-quarter earnings report, with shares in artificial intelligence chipmaker NVIDIA—recently, the world’s sixth-largest company by market capitalization—falling after the company beat earnings and revenue estimates but issued cautious guidance because of export restrictions to China. NVIDIA’s weakness was reflected in the underperformance of the Nasdaq Composite Index, but growth stocks outperformed value stocks overall. Refer to major indexes’ weekly performance table below.

Key highlights for the week and outlook:

1.    The stock market comes into Thanksgiving this year on an upswing, adding to a strong year-to-date gain. In Fact, the SPX is up over 8% for the month of Nov thus far, the Nasdaq is over 10%, and the Dow is over 7%. 

2.    Ongoing moderation in inflation. Headline CPI inflation for Oct came down to 3.2% yoy, while core inflation moderated to 4.0%. The recent surprises lower in inflation have helped pushed Treasury bond yields lower and have given the market a catalyst to move higher. 

3.    Fed interest rates. After the lower inflation readings for the month of October, the market probability of a rate hike at the December FOMC meeting has fallen to close to zero. Markets have embraced the idea that the Fed may be done (for now), and that both inflation and rates could be normalizing over time. 

4.    Signs of cooling economic growth. While the economy has shown some early signs of moderating – lower retail sales, slightly higher jobless claims – It is believed this goldilocks pace of slowing (not too hot, not too cold) has been supportive of the recent rally.

SPX sectors in play

All 11 sectors of the SPX index closed higher in the week. Healthcare(XLV) and Communication Services(XLC) were among top performers while Energy(XLE) and Utilities(XLU) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The major three U.S stock indexes all are trading around their Jul high after a four-week rally. The SPX index has gained over 10% during the period. Click below three indexes for their weekly charts respectively in a new window.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

 

China/HK

Equities in China retreated as news that Beijing may introduce fresh stimulus measures for the property sector was not enough to offset broader economic woes. The Shanghai Composite Index(SSE) gave up 0.44%, while blue chip CSI 300 lost 0.84%. In Hong Kong, the benchmark Hang Seng Index gained 0.6%. (Refer to the above weekly performance table).  

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

1.    Chinese regulators formulated a funding plan for property developers in its latest efforts to consolidate growth as the country grapples with an ongoing property crisis. The list, which reportedly includes 50 private and state-owned developers, will act as a guide for financial institutions to deliver a range of financing measures to strengthen balance sheets, according to Bloomberg. The reports follow recent property data that underscored an ongoing downturn in a key sector for China’s economy. Property investment, sales, and new home prices slumped in October. 

2.    In monetary policy news, Chinese banks left their one- and five-year loan prime rates unchanged, as expected, after the People’s Bank of China (PBOC) kept its medium-term lending rate on hold the prior week. More recently, expectations that the PBOC may cut its reserve ratio requirement rose as the latest economic data provided a mixed outlook for China. 

3.    Many economists anticipate that Chinese government advisers may propose an economic growth target of around 5% in 2024 at the annual Central Economic Work Conference in December.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

Singapore STI fell 0.96% this week, the loss much led by two local banks- DBS and OCBC which lost 2.66% and 2.31% respectively. While UOB bank lost 0.22% this week. SingTel was another big loser with 3% down. STI was trading within its four-week rangebound.

STI weekly chart

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

Stocks End Higher as Yields Stabilize

Weekly Wrap Content for the week of Nov 10:

1. Week 45 major indexes performance;

2. Week 45 US sector indexes performance;

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

U.S.

For the week of 10 Nov, U.S three major indexes posted their second straight week of gains as Treasury yields subsided, helping the SPX and Nasdaq Composite (COMP) notch their second straight week of gains. Both indexes are now near two-and-a-half-month highs. It was one of the final weeks of major third-quarter corporate earnings releases, and upside surprises from some technology-oriented firms appeared to provide support to the growth indexes. Refer to major indexes’ weekly performance table below.

Key highlights for the week and outlook:

1.    Yields increase after weak 30-year U.S. Treasury bond auction. Treasury yields generally decreased through the middle of the week but climbed on Thursday amid the weak 30-year Treasury auction. (Bond prices and yields move in opposite directions.) Traders may have also reacted to comments from Fed Chair Jerome Powell, who told a gathering of the International Monetary Fund that policymakers were “not confident” that they had achieved “a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time.” 

2.    Consumer sentiment index as the University if Michigan reported fell to a preliminary reading of 60.4 in November from 63.8 in October, the fourth consecutive monthly drop. The latest decline reflected eroding consumer sentiment over the long-term economic outlook, as well as growing concern over high interest rates, survey director Joanne Hsu said in a statement. 

3.    Risk of the looming U.S government shutdown deadline is around November 17, although the expectation for a continuing resolution to be passed has increased, particularly given that there is now a Speaker of the House in place. 

4.    The CPI and PPI reports will be in focus in coming week, scheduled for Tuesday and Wednesday, respectively.

SPX sectors in play

Six out of 11 sectors of the SPX index closed higher in the week. Growth stocks such as Tech( XLK), Communication Services(XLC) and Consumer Discretionary(XLY)  outperformed. The typical defensive names such as Utilities (XLU) and Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The major three U.S stock indexes all hit their two-month high this week. Posted two consecutive weekly gains. Click below three indexes for their weekly charts respectively in a new window.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Equities in China rose as investors remained broadly unmoved by data showing that consumer prices slipped back into contraction, reviving the specter of deflation hanging over the economy. The Shanghai Composite Index(SSE) rose 0.27%, while blue chip CSI 300 advanced 0.07%. In Hong Kong, the benchmark Hang Seng Index fell 2.61%. (Refer to the above weekly performance table).  

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

1.    China’s consumer price index fell 0.2% in October from the prior-year period, after remaining unchanged in September, as lower pork prices weighed on food prices. Meanwhile, the producer price index dropped 2.6% from a year ago, marking the 13th consecutive month of decline. 

2.    Trade data offered a mixed snapshot of China’s economy. Overseas exports declined 6.4% in October from a year earlier, surpassing the 6.2% fall in September, amid weaker global demand. However, imports unexpectedly rose by 3%, reversing the 6.2% contraction in September and marking the first year-on-year growth since September 2022. 

3.    The latest readings underscored the fragility of China’s economy and appeared to add to concerns that growth has not yet bottomed. Despite Beijing’s recent efforts to prop up demand, many economists predict that the government will introduce further stimulus measures to counter deflationary pressures.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

Singapore STI fell 1.18% this week, gave back about half of its gains from previous week’s 2.67% advance. Index stocks weekly top gainers such as SCI+4.34%, Venture+2.95%; top losers such as CDL-6.04%, Frasers L&C -5.41%, CLI- 4.23%

STI weekly chart

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

Stocks Recorded Best Gains in Nearly a Year on Falling Yield and Jobs

Weekly Wrap Content for the week of Nov 3:

1. Week 44 major indexes performance;

2. Week 44 US sector indexes performance;

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

U.S.

For the week of 3 Nov, U.S three major indexes recorded its strongest weekly gain since November 2022, as signs of a slowing economy and a policy statement from the Federal Reserve that was generally perceived as dovish led to a sharp decrease in long-term bond yields. Growth stocks and tech-heavy Nasdaq Composite Index (COMP) outperformed somewhat, but the gains were broad-based and led by the small-cap Russell 2000 Index, which scored its best weekly gain since October 2022. The SPX index was up nearly 6% for the week, its strongest weekly gain in a year. Refer to major indexes’ weekly performance table below.

Monthly index performance for Oct.

Key highlights for the week and outlook:

1.    FOMC meeting concluded on Wednesday left rates steady at 5.5% as was widely expected, but investors appeared encouraged by the post-meeting statement, which signaled that the recent runup in long-term Treasury yields had achieved some of policymakers’ intended tightening in financial conditions, bolstering investors’ confidence that Fed won’t need to take the interest rates any higher. 

2.    Weaker-than-expected jobs report on Friday seemed to confirm that the labor market was cooling. 150k jobs added in October, below expectations and the lowest level since June, and September’s strong gain was revised lower. Meanwhile, the unemployment rate rose to 3.9%, its highest level since January 2022. 

3.    It was the second-busiest week of earnings season. Earnings announcements that have generally come in "better than feared," signaling some hope that corporate profits can hold up despite macroeconomic headwinds.

 

SPX sectors in play

All 11 sectors of the SPX index closed higher in the week. Rates sensitive stocks such as Real Estate(XLRE) and Financials( XLF) outperformed, growth and tech stocks such as Consumer Discretionary(XLY), Communication Services(XLC) and Tech(XLK) were among the top gainers as well. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The major three U.S stock indexes each have recorded more than 5% weekly gains- their best weekly gains nearly in a year. SPX crossed above three major averages from below in a super strong rally week. Click below three indexes for their weekly charts respectively in a new window.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

 

China/HK

Equities in China gained as speculation that U.S. interest rates may have peaked offset broader concerns about the country’s slowing growth.  The Shanghai Composite Index(SSE) rose 0.43%, while blue chip CSI 300 advanced 0.61%. In Hong Kong, the benchmark Hang Seng Index added 1.53%. (Refer to the above weekly performance table).  

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

1.    China’s factory activity returned to contraction in October. The official manufacturing PMI fell to a below-consensus 49.5 in October, down from 50.2 in September, as production growth slowed. The nonmanufacturing PMI slowed to a lower-than-expected 50.6 from 51.7 in September. 

2.    China’s ongoing housing market decline remains a serious drag on its growth outlook for many investors despite recent indicators suggesting a demand recovery after Beijing rolled out a flurry of stimulus measures.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

Singapore STI advanced 2.67% this week. The index rebounded to test 3150 resistance level as I wrote in previous weekly post. Interest rates sensitive sectors such as REITs and developers outperformed, AReits gained 7.57%, CLI +6.23%, CICT+5.75% were among the weekly top gainers.

STI weekly chart

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