For a trader, winning is extremly dangerous if you haven't learned how to monitor and control yourself.

The Secret Recipe: Trading Success = Winning Trading System - U


Sunday, February 25, 2024

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

Join SgTraderClub Facebook group HERE for daily stocks and market updates, and more.

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 2nd 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.

No comments: