Stocks Close Out Strong Quarter With Gains

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Weekly Wrap Content for the week of Mar 29:

1. Week 13 major indexes performance;

2. Week 13 US sector indexes performance;

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

U.S.

For the week ended Mar 29, U.S. three major indexes advanced over the shortened trading week to end a quarter of strong gains. The S&P 500 Index recorded new closing and intraday highs to end the week. As most central banks are eyeing the start of rate cuts in the months ahead, investors are hoping for a soft landing for the rally to continue. Markets were closed on Friday in observance of the Good Friday holiday. Refer to major indexes’ weekly performance table below.

SPX gained 3.1% for March, which marked the index's fifth consecutive monthly advance. The Dow Jones Industrial Average(DJI) rose 2.1%, and the Nasdaq Composite(COMP) added 1.8%. For the quarter, the three indexes rose 10.3%, 5.6%, and 9.2%, respectively. Refer to below major indexes monthly performance table.

Key highlights for the week and next:

1.    Market activity was generally subdued ahead of the holiday weekend, although volumes were expected to pick up to some degree as pension funds and other institutional investors rebalanced portfolios ahead of the quarter’s end. 

2.    Collapse of the Francis Scott Key Bridge in Baltimore on Tuesday morning cut off shipping access to the Port of Baltimore, one of the nation’s largest ports and its primary port for car and truck shipments. Economic implications of Baltimore port closure is yet to be known. 

3.    Personal Consumption Expenditures (PCE) price index, which is considered the Federal Reserve's preferred gauge of inflation, PCE latest reading for Feb released on Friday was in line with forecast.

SPX sectors in play

For the week, nine out of 11 sectors in the SPX closed with weekly gains. Small-caps also easily outperformed large-caps, and the Russell 1000 Value Index gained 1.79%, in contrast with the 0.60% decline in its growth counterpart. Communication services(XLC) and technology(XLK) shares underperformed, as the mega-cap technology stocks led by NVDA, AAPL, NFLX and META declined.  Utilities(XLU) and Financials( XLF) outperformed. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three indexes rise to their monthly new records. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China equities declined for the week as concerns about the continuing property sector downturn weighed on investor confidence. The Shanghai Composite Index(SSE) declined 0.23%, while the blue chip CSI 300 gave up 0.21%. In Hong Kong, the benchmark Hang Seng Index edged up 0.25%. (Refer to the above weekly performance table).   

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

1.    Chinese Premier Li Qiang told participants at the China Development Forum, an annual summit for global business leaders, that the country is open to foreign investment. Premier Li also pledged that the government will step up measures to support growth in several sectors, including biological manufacturing, artificial intelligence, and the data economy. Speaking at the same event, International Monetary Fund Managing Director Kristalina Georgieva said that China’s economy could expand a further 20% over the next 15 years if it conducts pro-market reforms. 

2.    Profits at industrial firms surged 10.2% in the January to February period from a year ago and recovered from a 2.3% decline in 2023, according to the National Bureau of Statistics, aided by policy support and increased overseas demand.

Hang Seng Index stocks top weekly gains: China Hongqiao(1378) +3.59%; Shenzhou(2313) +16.33%;

Hang Seng Index stocks top weekly losers: China Mengniu(2319) -13.93%; Sunny Optical(2382) -8.58%

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index rose for 4^th consecutive week, gained 0.19% this week. It tested major resistance at 3250 level on Wednesday and retreated Thursday by profit-taking ahead of long weekends holiday. For the month of Mar, the index added 2.62%.

Top weekly gains: SATS +3.59%; YZJ Ship +2.69%;

Top weekly losers: HKLand -1.92%; CLI -1.83%

STI weekly chart

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

Stocks Close Up After Fed’s Dovish Signals

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Weekly Wrap Content for the week of Mar 22:

1. Week 12 major indexes performance;

2. Week 12 US sector indexes performance;

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

U.S.

For the week ended Mar 22, U.S. stocks closed higher, pushing all three major indexes to new records, as investors welcomed news that Federal Reserve policymakers were still anticipating three interest rate cuts later in the year. The more cyclical parts of the market, including small-cap and mid-cap stocks and sectors like industrials and financials, were among the top-performing for the week. The better economic outlook and potential for lower interest rates may be longer-term catalysts for a broadening of market leadership. Trading the following week was scheduled to end on Thursday in observance of the Good Friday holiday. Refer to major indexes’ weekly performance table below.

Key highlights for the week and next:

1.    The Fed held its March FOMC meeting and press conference and also released an updated set of economic projections in the week. The Fed left the fed funds rate on hold at 5.25% - 5.5%, but its updated "dot plot" still pointed to three rate cuts in 2024. The FOMC also sees the fed funds rate gradually heading to around 3.1% by 2026, indicating that this year is likely the start of a multiyear rate-cutting cycle. 

2.    Overall, markets welcomed the more dovish messaging coming out of the Fed and Chair Jerome Powell, who did not take the opportunity to push back on rising stock prices and easing financial conditions. Stock markets reach new highs and bond markets move higher, as Treasury yields softened. The better economic outlook and potential for lower interest rates may be longer-term catalysts for a broadening of market leadership. 

3.   In addition to the Federal Reserve, major global central banks, including the Bank of Japan (BoJ), the Swiss National Bank (SNB), and the Bank of England (BoE), also held policy meetings last week. The BoJ raised interest rates for the first time in 17 years, from -0.1% to 0.1%, abandoning the negative interest-rate policy regime after eight years.

SPX sectors in play

All11 sectors but one in the SPX closed with weekly gains. Communication services(XLC) led the gains along with technology(XLK) shares. A late rise helped artificial intelligence chipmaker NVIDIA(NVDA) reach a record high on Friday and lift the company’s market capitalization near USD 2.4 trillion. Reports that Apple(AAPL) might partner with Google parent Alphabet(GOOGL) in offering generative artificial intelligence tools also boosted sentiment. Health care(XLV) and real estate(XLRE) shares lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three indexes rise to their weekly new records. Markets indicators show technical overbought signals, weekly RSI of SPX registered at highest level since Jan 2020. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China equities retreated as concerns about the property sector slump offset optimism about better-than-expected economic data. The Shanghai Composite Index(SSE) declined 0.22%, while the blue chip CSI 300 gave up 0.70%. In Hong Kong, the benchmark Hang Seng Index lost 1.32%. (Refer to the above weekly performance table).   

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

1.    Property investment in China fell by 9% in the January–February period from a year earlier, slowing from a 24% drop in December, according to official data. Property sales by floor area sank 20.5% in the first two months of the year, after slumping 23% in December. The slower pace of declines in property investment and sales came after Beijing rolled out numerous pro-growth measures to arrest the country’ yearslong real estate slump. However, most investors remain cautious about China’s property sector as developers continue to grapple with high debt levels and weak homebuyer demand.

2.    Other data showed that some parts of China’s economy were picking up. Industrial production rose an above-forecast 7% in January and February from a year earlier, up from December’s 6.8%. Fixed-asset investment grew 4.2% in the first two months of the year from the prior-year period, rising from 3% in December amid higher infrastructure growth. Retail sales rose more than expected over the two-month period as consumption surged during the weeklong Chinese New Year holiday but eased from December’s increase. 

3.    Chinese banks left their one- and five-year loan prime rates unchanged at 3.45% and 3.95%, respectively, as expected, after the People’s Bank of China kept its medium-term lending rate on hold the prior week.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index rose for 3^rd consecutive, gained 1.42% this week. Interest rate sensitive stocks such as Reits and developers in the STI index outperformed, the three banks also charged higher, DBS and OCBC hit new one year record.

Technically, STI is approaching its major resistance level at around 3250 quickly after three consecutive weeks up. The index currently trading above all its major moving averages(MA) 20,50 and 200daily MA, which is bullish. Going forwards, immediate technical support at around its 200dma 3180 level, upside resistance at around its previous high 3250 level.

Top weekly gains: YZJ Ship +9.41%; Sembcorp Ind+4.55%;

Top weekly losers: Seatrium -11.24%; JMH -6.01%

STI weekly chart

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

SPX Ended 2nd Weekly Down Due to Inflation Concerns

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Weekly Wrap Content for the week of Mar 15:

1. Week 11 major indexes performance;

2. Week 11 US sector indexes performance;

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

U.S.

For the week ended Mar 15, the three major U.S. indexes ended modestly lower, as investors weighed upside surprises in inflation data and signs of moderating consumer spending. The DJI held up best among the major indexes and reached a record high on Wednesday before falling back to end the week. Both SPX and COMP posted their second-straight weekly declines. Energy shares outperformed on the back of higher oil prices, while technology shares lagged due to weakness in NVIDIA and other chipmakers. Refer to major indexes’ weekly performance table below.

Key highlights for the week and next:

1.    Data released on Tuesday showed the Consumer Price Index (CPI) rose 0.4% in February, in line with consensus expectations, but core prices (less food and energy) rose a tick more than expected, also by 0.4%. 

2.    Data released on Thursday for the producer price index (PPI), also rose 0.6% in February, roughly double consensus estimates and the most in six months. The stronger-than-expected inflation readings seemed to dampen hopes for Federal Reserve interest rate cuts. 

3.   Investors looked ahead to next week's(21/3/2024) Federal Open Market Committee (FOMC) meeting. The Fed is widely expected to keep its benchmark rate unchanged, and this week's inflation data likely will make central bank leaders reluctant to cut any time soon, analysts said.

SPX sectors in play

Four out of 11 sectors in the SPX closed with weekly gains. Energy(XLE) shares outperformed on the back of higher oil prices, while technology(XLK) shares lagged due to weakness in NVIDIA and other chipmakers. Among tech companies, software maker Adobe (ADBE) tumbled 14% after the company late Thursday released softer-than-expected guidance for the current quarter. Salesforce (CRM) sank 3% and Amazon (AMZN) shed 2.4% to lead Dow Jones Industrial Average(DJI) decliners. Consumer Discretionary(XLY) sector also lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and COMP indexes posted their second-straight weekly declines. The DJI held up best among the major indexes and reached a record high on Wednesday before falling back to end the week. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Stocks in China rose as the government’s recent market stabilization measures boosted investor confidence despite a weak economic outlook. The Shanghai Composite Index(SSE) rose 0.28%, while the blue chip CSI 300 added 0.71%. In Hong Kong, the benchmark Hang Seng Index rallied 2.25% after last two weeks declines (Refer to the above weekly performance table).   

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

1.    Prices stop falling in China for first time in half a year. China’s CPI index rose an above-consensus 0.7% in February from the prior-year period, reversing January’s 0.8% decline and marking the first positive reading since August 2023 as food and services prices increased and consumption surged during the weeklong Chinese New Year holiday. However, the producer price index fell a bigger-than-expected 2.7% from a year ago, accelerating from January’s 2.5% drop and marking the 17th monthly decline, the longest streak of declines since 2016, according to Bloomberg. Investors remained cautious on calling a trough to deflation as China grapples with weak domestic demand. 

2.    The People’s Bank of China injected RMB 387 billion into the banking system via its medium-term lending facility and left the lending rate unchanged at 2.5%, as expected. 

3.    The State Council pledged to increase spending by at least 25% by 2027 from last year to encourage consumers and businesses to replace old equipment and goods. 

4.    China’s new home prices fell 0.3% in February for the eighth straight month, according to the statistics bureau. The data showed no sign of turnaround in China’s property crisis despite Beijing’s attempts to shore up demand.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index rose for 2^nd consecutive week, gained 0.82%. MAS said in the week that Singapore’s 2024 growth forecast raised to 2.4% with inflation expected lower to 3.1% by economists. The three local banks led STI index way up, DBS bank hit new record high of 34.67.

Technically, STI rallied on Wed and Thur after it had a bullish breakout from its previous two-week sideway consolidation, before retreating a bit on Friday. It took off after taking off from 3150 resistance level, next major technical resistance at previous high around 3250 level, should it continue going up.

Changes to STI index stocks after Mar review: Frasers Centrepoint Trust has been added to the STI and Emperador has been removed from the index. All changes will take effect on 18 March 2024.

Top weekly gains: SingTel +4.20%; CDL +2.78%;

Top weekly losers: Emperador -20%; YZJ Ship -7.61%

STI weekly chart

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

U.S. Stocks Drop From Record Highs as Chipmakers Retreat

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Weekly Wrap Content for the week of Mar 8:

1. Week 10 major indexes performance;

2. Week 10 US sector indexes performance;

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

U.S.

For the week ended Mar 8, all the three major indexes ended lower. Growing hopes that the Fed might begin cutting interest rates sooner rather than later appeared to help bring the large-cap S&P 500 Index(SPX) to new record intraday highs, alongside the Nasdaq Composite(COMP) before pulling back late Friday. On Friday, SPX and COMP reversed sharply from all-time highs as a semiconductor sell-off upstaged the jobs report. Refer to major indexes’ weekly performance table below.

Key highlights for the week and next:

1.    U.S. unemployment rate ticked to its highest in two years. The U.S. nonfarm-jobs report last week was somewhat mixed but overall pointed to early signals of a U.S. labor market that is cooling. The total jobs added in February were 275k, well above the expected 200k job gains. However, January’s figure was revised sharply lower, going from 353k to 229k, and the unemployment rate climbed notably higher, from 3.7% to 3.9%, now approaching its highest rate in two years. 

2.    Interest rate cut. Markets expect Fed rate cuts starting in June 2024. 

3.    Notably, Danish pharmaceuticals company Novo Nordisk(NONOF.OTC), which has seen robust demand for its diabetes and weight loss drugs, displaced Tesla on Thursday as the 12th biggest public company by market capitalization.

SPX sectors in play

Eight out of 11 sectors in the SPX closed with weekly gains. Small-cap and value shares outperformed, while mega-cap tech shares lagged due in part to a decline in Apple(AAPL) following reports about slowing iPhone sales in China. Industry-leader Nvidia (NVDA) sharply reversed course, rising to a record high around $974 earlier before ending down 5%. Broadcom (AVGO) sank 7%, its biggest single-day drop in four years, after reporting disappointing revenue. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and COMP indexes retreated from record highs and ended lower Friday as a sharp sell-off in semiconductor shares burdened the market. SPX remains near all-time highs and is now up nearly 25% since late October without a 5% or more pullback. It’s expected that equity markets may be due for a period of consolidation or pullback, although we do not see the scope for a deep or prolonged correction or bear market (a 20% or more pullback). Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Stocks in China gained as the government’s recent market stabilization measures lifted investor confidence despite an uncertain economic outlook. The Shanghai Composite Index(SSE) rose 0.63%, while the blue chip CSI 300 added 0.2%. In Hong Kong, the benchmark Hang Seng Index gave up 1.42%(Refer to the above weekly performance table).   

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

1.    Beijing set an economic growth target of around 5% this year at the National People Congress (NPC), China’s parliament, which started March 5 and ends March 11. The target was the same as last year, when China’s economy officially rose 5.2%. 

2.    The government set the budget deficit at around 3%—the same target as early last year until it was subsequently raised to 3.8% to accommodate more borrowing—and said it would issue RMB 1 trillion in special ultra-long central government bonds to support growth. 

3.    At the NPC, Premier Li Qiang announced that China will refine housing policies and construct government-subsidized housing to support the property sector, which is mired in a prolonged downturn. 

4.    On the economic front, the private Caixin/S&P Global survey of services activity fell to a weaker-than-expected 52.5 in February from January 52.7. 

5.    Chinese exports and imports rose in the first two months of the year. Exports grew an above-consensus 7.1% in January and February from the prior-year period, improving from December’s 2.3% increase. Imports rose 3.5% over the two-month period, greater than the 0.2% gain in December. China combines trade data for the first two months of the year to smooth out distortions arising from the weeklong Chinese New Year holiday.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index rose modestly, added 0.36% after previous two-week retreat, the index cycled down to its 4-week low near 3100 and bounced off a bit. It appears the index has been sideway trading within its 4-week range 3100-3250 levels.

Changes to STI index stocks after Mar review: Frasers Centrepoint Trust has been added to the STI and Emperador has been removed from the index. All changes will take effect on 18 March 2024.

Top weekly gains: DFI+3.38%; YZJ Ship +2.79%;

Top weekly losers: Seatrium-4.21%; SATS -3.76%

STI weekly chart

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

U.S. Stocks End Mostly Higher After Favorable Inflation Data

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Weekly Wrap Content for the week of Mar 1:

1. Week 9 major indexes performance;

2. Week 9 US sector indexes performance;

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

U.S.

For the week ended Mar 1, most of the major benchmarks ended the week higher, with the Nasdaq Composite(COMP) joining the S&P 500 Index(SPX) in record territory for the first time in over two years. The month also closed a strong February, with the SPX marking its strongest beginning two months of the year since 2019, according to The Wall Street Journal. Refer to major indexes’ weekly performance and monthly performance (Feb) tables below.

Monthly Index Performance for Feb:

Key highlights for the week and next:

1.    Favourable inflation data. Fed’s preferred inflation gauge Personal Consumption Expenditures(PCE) Price Index report for Jan released on Thursday. The index rose 2.8%, in line with expectations, while stocks immediately jumped on the inflation news. 

2.    Interest rate cut. CME FedWatch Tool shows only a slightly higher chance of a rate cut over next two policy meetings-24.6% versus 23.4% the week before, echo the recent narrative that the Fed in no rush to cut interest rates. 

3.    Upcoming important jobs data report which is Feb Nonfarm Payrolls scheduled for Mar 8 Friday.

 

SPX sectors in play

Seven out of 11 sectors in the SPX closed with weekly gains. It appears the leadership from the more concentrate Magnificent 7 stocks broadens to other sectors as investors start looking for opportunities in segments of the market that have lagged. Microsoft, Apple and Alphabet lagged the S&P 500 gains last month, while Tesla is down about 18% year-to-date. That leaves NVIDIA, Meta, and to a lesser extent Amazon driving the bulk of the relative gains. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and COMP indexes closed at record highs for the first time in over two years. SPX also marking its strongest beginning two months of the year since 2019. Dow edged a bit lower for the week. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Stocks in China rose on hopes that Beijing may boost monetary easing measures to stimulate growth. The Shanghai Composite Index(SSE) gained 0.74%, while the blue chip CSI 300 added 1.38%. In Hong Kong, the benchmark Hang Seng Index gave up  0.82%(Refer to the above weekly performance table).   

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

1.  February’s economic data continued to paint a mixed outlook for China. The official manufacturing purchasing managers index fell to 49.1 in February from 49.2 in January, remains in contraction. The nonmanufacturing PMI rose to a better-than-expected 51.4 from 50.7 in January. On the other hand, the private Caixin/S&P Global survey of manufacturing activity edged up to 50.9 in February, beating expectations and marking its fourth month of expansion. 

2.    Property sales extend declines. The value of new home sales by the country’s top 100 developers slumped 60% in February from the prior-year period, accelerating from January’s 34.2% drop, according to the China Real Estate Information Corp.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI continues its pull-back for 2^nd week, lost 1.54% this week. It appears the index has been sideway trading largely in the range of 3250 to 3120 for the last two months. There was no technical rebound as expected in previous note, in stead the index cycled down to near its sideway trading range bottom.

Top weekly gains: YZJ Ship+7.83%; SATS +2.31%;

Top weekly losers: UOL -9.62%; CDL -5.63%

STI weekly chart

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