Stocks End Flattish As Small-Caps Catching Up

Weekly Wrap Content for the week of Dec 8:

1. Week 49 major indexes performance;

2. Week 49 US sector indexes performance;

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

U.S.

For the week of 8 Dec, U.S three major indexes ended flat to modestly higher. The small-cap Russell 2000 Index outperformed the S&P 500 Index for the third time in the past four weeks, helping narrow its significant underperformance for the year-to-date period. Refer to major indexes’ weekly performance table below. 

Key highlights for the week and outlook:

1.    Latest Job data. The U.S. economy added 199,000 jobs in November, slightly more than expected, the unemployment rate fell to 3.7% (a four-month low), and the labor-force participation ticked higher, all pointing to a healthy labor market. 

2.    U.S Q3 GDP was up 5.2%, more than twice the U.S. economy's long-term potential. 

3.    Inflation is falling faster than the Fed projections. Feeding into optimism for a soft landing in the economy, inflation has slowed sharply, even as the unemployment rate remains low and demand strong. Fed-fund futures are now pricing in rate cuts as early as March, though July was expected just few weeks ago. 

SPX sectors in play

All but one out of the 11 sectors of the SPX closed in red in the week. Communication Services(XLC) was the only sector closed positive. Financials(XLF) and Industrial(XLI) among the laggers. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The major three U.S stock indexes closed flattish to modestly higher, recorded six weeks gains 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

Equities in China fell after a credit downgrade on China’s sovereign debt by Moody’s underscored worries about its economic outlook.  The Shanghai Composite Index(SSE) fell 2.05%, while blue chip CSI 300 lost 2.40% after falling midweek to its lowest level in nearly five years. In Hong Kong, the benchmark Hang Seng Index fell 2.95%. (Refer to the above weekly performance table).  

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

1.    Moody’s cut its outlook for China’s government bonds to "negative" from "stable" on Tuesday, saying that the country’s debt-laden local governments and state firms posed downside risks to the economy. In response, Beijing issued a flurry of pro-growth measures this year to shore up demand, although analysts say the measures have been insufficient to revive the economy. 

2.    Bearish sentiment about China’s longer-term outlook appeared to lead investors to look past the private Caixin/S&P Global survey of services activity, which rose to an above-forecast 51.5 in November from October’s 50.4.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

Singapore STI rebounded from around 3055 support area. Among the index component stock, Genting Sp and Seatrium were the two stocks outperformed with more than 6% weekly gains. While Sembcorp Ind and DFI RG were two laggers with 4.8% and 3% losses. STI was trading within its five-week rangebound.

STI weekly chart

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