U.S. Stocks Rallied Fueled By Artificial Intelligence(AI) Bullishness

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Weekly Wrap Content for the week of Feb 23:

1. Week 8 major indexes performance;

2. Week 8 US sector indexes performance;

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

U.S.

For the week ended Feb 23, the U.S three major indexes closed higher in the shortened trading week by a public holiday on Monday. The S&P 500 index (SPX) and the Dow Jones Industrial Average (DJI) edged to all-time highs for the second straight week as the market capped a record-setting week fueled by AI-driven bullishness and chip leader Nvidia's (NVDA) stronger-than-expected earnings. Nasdaq Composite Index also posted its biggest daily gain in about a year on Thursday, when NVIDIA added a record USD 277 billion to its market capitalization. The S&P 500 gained for the sixth week out of the past seven. Refer to major indexes’ weekly performance table below.

Key highlights for the week and next:

1.    Nvidia(NVDA) finished with a surge of nearly 9% to a record high for the week and briefly topped $2 trillion in market value. The company's strong results, which included a 265% year-over-year revenue jump, sparked a broad rally Thursday. The company also increased its full-year guidance on robust demand for its chips, which are used in artificial intelligence applications. 

2.    Positive. Weekly jobless claims come in below expectations, suggesting that the labor market remained tight. On a seasonally adjusted basis, 201k new claims were filed in the week ended February 17, a decline of 12k versus the preceding week. The number of continuing claims slipped 27k to 1.862 million. 

3.    Fed’s Waller suggests policymakers shouldn’t rush to cut rates in a speech delivered on Thursday. Waller believes that inflation is “likely” to return to the Fed’s 2% target. But he also cautioned that he’d like at least a few more months of data to see “whether January was a speed bump or a pothole.” 

4.    GDP, PCE update ahead. It’s expected to release Q4 GDP initial estimate on Feb 28. The Fed’s preferred metrics of inflation, personal consumption expenditure (PCE) inflation next reading will come on Feb. 29, and the expectation is for a moderation in both headline and core PCE inflation annually.

SPX sectors in play

All 11 sectors in the SPX closed with weekly gains. It appears the previous lagging sectors such as Consumer Staples(XLP) and Materials( XLB) play catch-up following mega- tech’s recent rally. Technology-heavy sectors such Tech sector(XLK) and Communication Services(XLC) have had awesome lead so far with 6.66% and 9.72% YTD return respectively. On the other hand, energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and DJI  edged to all-time highs for 2^nd straight week. While Nasdaq(COMP) recorded its biggest daily gain on Thursday when NVDA surged after earning announcement. All three indexes are on track of strong bull run.

Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Chinese equities rallied as recovery hopes rose following buoyant holiday spending during the prior week’s Chinese New Year holiday. The Shanghai Composite Index(SSE) rose 4.85%, while the blue chip CSI 300 gained 3.71%. In Hong Kong, the benchmark Hang Seng Index advanced 2.36%(Refer to the above weekly performance table).   

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

1.    Tourism revenue over the weeklong Chinese New Year holiday surged 47% over the 2023 holiday and surpassed pre-pandemic levels, according to data from the Ministry of Culture and Tourism. Domestic trips rose 34% from last year, and international trips also increased. However, average spending per trip fell 9.5% from 2019, signaling lingering caution among consumers. 

2.    The PBoC announced that the five-year loan prime rate was lowered by a bigger-than-expected 25 basis points to 3.95%, marking the largest cut since the reference rate was introduced in 2019. Lowering the five-year rate, a key gauge for mortgages, will reduce mortgage rates for homebuyers and aims to shore up demand in the troubled property sector. Policymakers left the one-year lending rate unchanged. 

3.    New home prices register seventh monthly decline in 70 cities, fell 0.3% sequentially in January.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

Against other major markets, STI pulled back 1.15% this week. It appears there are some profit-taking after previous week’s 2.67% rally. The index retraced and sitting right above its 200dma support at 3184 level, so do expected technical rebound in coming week.

Top weekly gains: Wilmar +4.63%; UOL +4.28%;ThaiBev +4%

Top weekly losers: Gengting Sp -10.58%; SIA -10.52%; Sembcorp-9.38%

STI weekly chart

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

U.S. Stocks Down on Hotter than Expected Inflation

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Weekly Wrap Content for the week of Feb 16:

1. Week 7 major indexes performance;

2. Week 7 US sector indexes performance;

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

U.S.

For the week ended Feb 16, U.S three major indexes closed lower, breaking a five-week winning streak after higher-than-expected Consumer Price Index (CPI) readings Tuesday and Producer Price Index (PPI) report on Friday, further deflating investor hopes for lower interest rates any time soon. The declines were concentrated in large-cap growth stocks, however, with an equally weighted version of the S&P 500 reaching a record intraday high on Thursday. Refer to major indexes’ weekly performance table below.

Key highlights for the week and next:

1.    January CPI and PPI data was disappointing for investors in the week. The headline CPI figure came in at 3.1% year over year, above expectations for 2.9% but, notably, still lower than December’s 3.4%. Core inflation (excluding food and energy) remained stickier at 3.9% year over year, above expectations for 3.7% and in line with December’s reading. 

2.    Similarly, PPI inflation, which measures the prices received by producers of domestic goods and services, came in above expectations on headline and core figures. In January, headline PPI was 0.9% year over year, above forecasts of 0.6% but below December’s 1% reading. 

3.    Fed interest rates cut. Prior to last week, markets had been forecasting around five rate cuts, starting at the May Fed meeting. Now the expectation is for around four rate cuts, perhaps starting at the June meeting. 

4.    Upcoming PCE data. The Fed’s preferred metrics of inflation, personal consumption expenditure (PCE) inflation next reading will come on Feb. 29, and the expectation is for a moderation in both headline and core PCE inflation annually.

SPX sectors in play

Seven out of the 11 sectors in SPX closed with weekly gains. The large-cap growth stocks which outperformed previous week, however, led the declines this week. Technology (XLK), Communications services (XLY) and Consumer Discretionary(XLY) among top losing sectors, while Energy(XLE) and Materials(XLB) outperformed. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The S&P 500 Index(SPX) recording its first weekly decline since the start of the year. It’s believed inflation can continue lower in the year ahead, albeit perhaps not consistently downward. Investors should using the period of volatility as opportunities to add to portfolio ahead of the start of a multiyear Fed rate-cutting cycle. All the three indexes uptrend are well intact after all.

Click below three indexes for their weekly charts respectively.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Financial markets in mainland China were closed, and no official indicators were released due to the weeklong Lunar New Year holiday, which began Saturday, February 10.

In Hong Kong, the benchmark Hang Seng Index rose 3.77%. (Refer to the above weekly performance table).  

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

1.    Early data showed a pickup in consumer spending over the Lunar New Year, China’s most important holiday. More than 61 million rail trips were made in the first six days of the national holiday, a 61% increase over last year’s holiday, according to official media reported by Bloomberg. Travel by road and airplane also improved, while hotel sales on Chinese e-commerce platforms increased more than 60%, according to state media. 

2.    Box office receipts in the first four days of the holiday declined from last year, according to Bloomberg using data from online movie ticket platform Maoyan Entertainment, suggesting that consumers may have reduced their spending per trip. Nevertheless, evidence of strong holiday spending will likely be welcome news for China’s government, which is grappling with deflation and a yearslong property sector crisis that has dampened consumer confidence. China’s stock markets resume trading on Monday, February 19.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI rallied 2.67% in the shortened trading week after the Chinese New Year holiday. SGX resumed trading on Tuesday and the STI index had a more than 200 points high-low swing in just three days. Gains were led by three local banks. DBS +4.09%, UOB+3.73% and OCBC+2.39%.

Among the 30 STI index stocks, 26 of them closed with gains and 3 losses. SIA was the top gainer with 7.65% up and JMH was at the bottom with 2.78% loss. The index’s next major technical resistance level at around 3250 and immediate downside support at around 3184 its 200dma.

STI weekly chart

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

S&P 500 Index Break 5,000 Record for First Time

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Weekly Wrap Content for the week of Feb 9:

1. Week 6 major indexes performance;

2. Week 6 US sector indexes performance;

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

U.S.

For the week ended Feb 9, U.S three major indexes moved higher over the week, with the S&P 500 Index reaching new highs and breaching the 5,000 threshold for the first time, behind earnings strength and bullishness over tech, economy outlooks. The advance remained relatively narrow, however, with an equally weighted version of the index significantly trailing the standard market-weighted version for the fourth time in five weeks. Refer to major indexes’ weekly performance table below.

Key highlights for the week and next:

1.    The U.S. Treasury Department’s record $42 billion auction of 10-year notes got solid reception. The auction calmed fears that the government’s record borrowing levels would push borrowing costs higher, thereby removing some of the Federal Reserve’s power to cut interest rates if needed to stimulate the economy in the coming months. 

2.    Investors head into the weekend with two key inflation reports ahead next week: the Labor Department's January Consumer Price Index (CPI) and Producer Price Index (PPI).

SPX sectors in play

Seven out of the 11 sectors in SPX closed with weekly gains. Mega-cap tech(XLK) and communications services(XLY) companies continued to lead the upside. Arm Holdings (ARM) and Palantir Technologies (PLTR) surged 62% and 43% respectively in the week. While Consumer Staples(XLP) and Utilities(XLU) stocks lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

SPX posted its third consecutive daily record close and settled above 5,000 for the first time ever Friday as big technology shares extended a march higher and investors remained buoyed by the outlook for the economy and interest rates. The index closed its 14th weekly gain out of the last 15. The DJI which posted a record high Thursday, finished with a slight loss Friday despite a 1.5% gain in member Microsoft (MSFT). Click below three indexes for their weekly charts respectively.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Stocks in China rallied in a holiday-shortened week as the government’s latest raft of stimulus measures offset concerns about deepening deflation. The Shanghai Composite Index(SSE) gained 4.97%, while the blue chip CSI 300 added 5.83% for the week ended Thursday. Markets in mainland China are closed for the Lunar New Year holiday from Friday, February 9, and resume trading on Monday, February 19.  In Hong Kong, the benchmark Hang Seng Index rose 1.37%. (Refer to the above weekly performance table).  

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

1.    Deflation risk. The consumer price index fell 0.8% in January from the prior-year period, accelerating from December’s 0.3% drop and marking its fastest decline since 2009. Food prices led the contraction as pork prices declined. Core inflation—which strips out volatile food and energy costs—rose 0.4%, its weakest rise since June 2023. The producer price index declined 2.5% from a year ago, marking the 16th consecutive month of deflation for factory gate costs. 

2.    January’s Caixin/S&P Global survey of services activity fell to a weaker-than-expected 52.7 from December’s 52.9 as new orders fell, although the gauge stayed in expansionary territory for the 13th straight month. 

3.    The People’s Bank of China said in its latest quarterly policy report that it would keep policy support flexible and precise to boost domestic demand. The central bank also forecast that consumer prices would “rebound modestly.” Many economists predict that Beijing will introduce further stimulus measures as the world's second-largest economy grapples with a property market downturn, weak consumer demand, and deflationary pressures.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI slipped 1.30% in the quieter week ahead of Chinese New Year holiday. The index has been largely trading within its four-week trading range from 3211 to 3127 level- in sideway consolidation mode. JMH +4.27% and DBS+0.99% were among top weekly gainers, while Seatrium -13% and Wilmar-6.49% were among top losers.

STI weekly chart

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

SPX Hit an All-time High After Jan Payrolls Data

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Weekly Wrap Content for the week of Feb 2:

1. Week 5 major indexes performance;

2. Week 5 US sector indexes performance;

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

U.S.

For the week ended 2 Feb, U.S three major indexes recorded another week of gains, The SPX and DJI powered to record-high closes Friday after stronger-than-expected earnings from mega-cap leaders Amazon (AMZN) and Facebook parent Meta Platforms (META) fueled a rally in technology shares and January jobs growth blew past market expectations. Stocks have rallied sharply of late, with the SPX gaining 20% in the last three months. Refer to major indexes’ weekly performance table below.

Major indexes performance for the month of January:

Key highlights for the week and next:

1.    Strong jobs data. Early Friday, the Labor Department reported Nonfarm Payrolls surged by 353,000 last month, nearly double analysts' expectations, suggesting job creation remained robust in early 2024. 

2.   FOMC meeting. All eyes were on the Fed last week, the Fed kept its policy rate steady, but the primary focus was on the central bank's message that it intends to remain on hold a while longer. While markets were hoping for a signal that rate cuts were coming sooner, incoming data, including the latest jobs report, continue to offer confidence that the economy is holding up well enough for the Fed to exercise some patience. 

3.   Stronger-than-expected earnings from mega-cap leaders Amazon (AMZN) and Facebook parent Meta Platforms (META) fueled a rally in technology shares. Meta shares rallied more than 20% and ended at a record high after the company's quarterly results, released late Thursday, exceeded Wall Street expectations.    

SPX sectors in play

Nine out of the 11 sectors in SPX closed with weekly gains. Consumer Discretionary(XLY) and Communication Services(XLC) stocks outperformed. Energy(XLE) stocks lagged. Stronger-than-expected earnings from mega-cap leaders Amazon (AMZN) and Facebook parent Meta Platforms (META) fueled a rally in technology shares. Meta shares rallied more than 20%, and Amazon surged nearly 8% to its highest close since December 2021 after the company surpassed earnings forecasts and projected first-quarter revenue will increase by 8% to 13%. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The SPX and DJI powered to record-high closes this week and Nasdaq Composite (COMP) to its highest level in over two years. All three major indexes recorded 4^th weekly 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

Stocks in China retreated as downbeat economic data and property sector headlines fueled investors’ pessimism about the growth outlook. The Shanghai Composite Index(SSE) fell 6.19%, its worst week since 2018, while the blue chip CSI 300 sank 4.63%, its biggest weekly loss since 2022. Both benchmarks are trading at five-year lows. In Hong Kong, the benchmark Hang Seng Index gave up 2.62%. (Refer to the above weekly performance table).  

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

1.    PMI. January’s economic data provided a mixed picture of China’s economy. The official manufacturing purchasing managers’ index (PMI) rose to 49.2 in January from 49.0 in December amid improved production growth, but still lagged the 50-mark threshold separating growth from contraction. The nonmanufacturing PMI ticked up to an above-consensus 50.7 from 50.4 in December. On the other hand, the private Caixin/S&P Global survey of manufacturing activity remained steady at 50.8 in January, beating expectations and marking its third straight month of expansion. 

2.    China Evergrande ordered to be liquidated. A Hong Kong court ordered the country’s formerly largest property developer, to be liquidated after the  company failed to reach a restructuring agreement with its creditors since it defaulted on its offshore bonds in December 2021. The focus now shifts to whether the ruling will be followed in mainland China, which has a separate legal system and where most of Evergrande’s assets reside. 

3.    Property sales remain weak despite official intervention. The value of new home sales by the country’s top 100 developers fell 34.2% in January from the prior-year period, roughly even with the 34.6% drop in December, according to the China Real Estate Information Corp.  

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI added 0.64% in the week to close at its two-week high. Technically the local index continues its sideways trading within three-week trading range, between its 50 and 200dma. Sembcorp Ind and Keppel were among the top gainers of the week with 6.81% and 6% up, Keppel hit new all-time high on strong uptrend. Keppel DC and Seatrium were among top losers of the week, lost 5.68% and 3.85% respectively.

STI weekly chart

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