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Sunday, March 3, 2024

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 2nd 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.

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