Stocks Rallied Amid Robust Tech Results

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Key takeaways:

1.    Earnings of the Magnificent 7 under spotlight for the week. Strong results helping the S&P 500(SPX) recover half of its April losses. 

2.    U.S Q1 GDP indicated growth slowed notably to 1.6% from 2.5% consensus and the slowest pace of growth in nearly two years. 

3.    Personal consumption expenditures (PCE) index rose at an annualized rate of 3.7% in the first quarter, more than expected and well above both the fourth quarter’s 1.7% increase and the Federal Reserve’s 2% long-term inflation target.

U.S.

For the week ended Apr 26, U.S major indexes managed to snap a string of three weekly losses as investors responded to the busiest week of the first-quarter earnings reporting season. The technology-heavy Nasdaq Composite Index performed best, helped in part by strength in Apple and a late rebound in chipmaker NVIDIA. Refer to below major indexes monthly performance table.

Key highlights for the week and next:

1.    Alphabet's(Google parent) shares rally sharply following robust quarterly earnings, lifting tech stocks and helping the Nasdaq Composite(COMP) end its four-week slide. Another tech mega-cap company, Microsoft (MSFT), jumped almost 2% after reporting better-than-expected quarterly results. Conversely, Facebook parent Meta Platforms fell sharply—at one point erasing nearly USD 200 billion in market value—after CEO Mark Zuckerberg announced plans to continue heavy spending on artificial intelligence and other new technologies. 

2.    Q1 GDP missed estimates and Core PCE index rebounded, more than expected.

SPX sectors in play

For the week, all the 11 sectors of SPX closed positive. Technology(XLK) and Consumer Discretionary(XLY) outperformed while Materials(XLB) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

SPX and COMP indexes rebounded 1^st week after three-week consecutive down. Both SPX and COMP closed above their 20 weekly MA, while Dow closed just beneath its 20weekly MA. Overall still uptrend. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose as investors grew more optimistic about the economy. The Shanghai Composite Index(SSE) gained 0.76%, while the blue chip CSI 300 added 1.20%. In Hong Kong, the benchmark Hang Seng Index soared 8.8%. (Refer to the above weekly performance table).

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

1.    China’s economy is expected to grow 4.8% this year, up from a median forecast of 4.6% last month, according to 15 economists surveyed by Bloomberg. China’s gross domestic product grew an above-consensus 5.3% in the first quarter from a year earlier, accelerating slightly from the 5.2% year-over-year expansion in the fourth quarter of 2023. However, economists downgraded their inflation forecasts as declining producer prices and a persistent property market slump remain a drag on the economy. 

2.    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.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index also recorded its 1^st weekly rebound after three-week consecutive decline. The index had a bullish breakout from its past 6 months consolidation and reached new high since Aug last year(based on adjusted price. Immediate technical support 3250 level and upside resistance at 3340.

STI Index component stocks weekly return:

STI weekly chart

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