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.