U.S. Tech Stocks Hit New Records While Dow Retreat

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Table of Content:

1.    Major indexes weekly performance 

2.    S&P 500 sector index weekly performance 

3.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week ended May 24, the U.S major indexes recorded widely varying results, with the Dow Jones Industrial Average(DJI) recording its biggest weekly loss (-2.33%) since early April, while the technology-heavy Nasdaq Composite(COMP) continued its recent march into record territory. The broad S&P 500 Index(SPX) was roughly flat, while small-cap stocks(Russell 2000) lost ground. The market was scheduled to be closed on coming Monday public holiday. Refer to below major indexes weekly performance table.

Key highlights for the week and next:

1.    NVIDIA beats estimates. A primary factor driving the market’s divergence was the gain in shares of AI chipmaker NVIDIA(NVDA), now the third-largest company in the S&P 500 by market capitalization (trailing only Apple and Microsoft). After beating consensus estimates, NVIDIA shares rose 9.3% on Thursday, adding roughly USD 220 billion to its market capitalization. 

2.   Interest rate cut. Data suggesting a rebound in growth in May - leading to speculation that the Fed would wait longer to cut interest rates. S&P Global reported that its composite index of business activity had jumped unexpectedly to 54.4 in May, its highest level in just over two years. Futures markets began pricing in only a 39.9% chance of more than one Fed rate cut this year, down from 57.3% the week before, according to the CME FedWatch Tool. 

3.    Earnings growth upbeat. About 95% of S&P 500 companies have reported Q1 earnings, and of these, nearly 80% have exceeded earnings expectations, above the long-term average rate of 77%. Earnings growth for the quarter is now forecast to come in at a healthy 6%, above the expectation for 3.5% growth at the start of the quarter.

SPX sectors in play

Two out of the 11 sectors of SPX closed with gains. Technology(XLK) and Communication Services(XLC) outperformed this week. Financials(XLF) and Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

SPX is heavily weighted toward technology and growth sectors. Three growth sectors i.e. communication services(XLC), consumer discretionary(XLY) and technology(XLK) – which all house the "Magnificent 7" stocks, make up about 50% of the index weight. Refer to below SPX sector indexes weightings.

Indexes technical levels

All three indexes reached record highs during the week. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks retreated as fears that rates would remain elevated in the U.S. offset optimism about Beijing’s latest measures to shore up the ailing property sector. The Shanghai Composite Index(SSE) declined 2.07%, while the blue chip CSI 300 lost 2.08%. In Hong Kong, the benchmark Hang Seng Index fell 4.83%. (Refer to the above weekly performance table).

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

1.    The People’s Bank of China (PBOC) announced a historic rescue package for the property sector in the prior week as data showed no sign of letup in China’s housing crisis. Measures included 1) a re-lending program that would extend RMB 300 billion in low-cost funds to a select group of state-owned banks to lend to local state-owned entities for buying unsold homes, 2) removing the nationwide floor level of mortgage rates, and 3) lowering the minimum down payment ratio for home purchases. 

2.    Chinese banks left their one- and five-year loan prime rates unchanged at 3.45% and 3.95%, respectively, as expected, after the PBOC kept its medium-term lending rate on hold.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index edged higher 0.09% for the week. Immediate resistance level is around 3325, immediate technical support 3298-20dma level.

STI Index component stocks weekly return:

STI weekly chart

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

Dow Ends Above 40,000 to Cap Firm Week for Stocks

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Table of Content:

1.    Major indexes weekly performance 

2.    S&P 500 sector index weekly performance 

3.   Major indexes weekly chart and technical support & resistance levels

U.S.

For the week ended May 17, the U.S stock market reached a new all-time high. The Dow(DJI) reached a new summit, briefly touching 40,000, thanks to a better-than-expected inflation report. S&P 500 Index(SPX), and Nasdaq Composite(COMP) climbed to record highs in the week as well. The indexes posted their fourth consecutive weekly advances after signs of cooler inflation boosted hopes for rate cuts. Refer to below major indexes weekly performance table.

Key highlights for the week and next:

1.    Inflation report. The major factor supporting sentiment appeared to be Wednesday’s release of the April consumer price index (CPI). Headline prices rose 0.3% in April, a tick below expectations, while core (less food and energy) prices rose 0.3%, as expected. 

2.    Interest rate. Long-term U.S. Treasury yields fall on growth and inflation news. The downside inflation and growth surprises helped drive the yield on the benchmark 10-year U.S. Treasury note to its lowest level in over a month at midweek. 

SPX sectors in play

All the 11 sectors but one of SPX closed with gains. Technology(XLK) and Real Estate(XLRE) outperformed this week, Industrials(XLI) lagged. While a good portion of the market's ascent since 2022 has been powered by the prolific gains in the technology sector (and the so-called "Magnificent 7" and enthusiasm around AI in particular), leadership has begun to broaden more recently, which is viewed as a positive sign for the longevity of this bull market. Leadership is seen in recent weeks come from cyclical areas, like industrials(XLI) and financials(XLF), as well as more defensive and rate-sensitive areas, like utilities(XLU). Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All three indexes reached record highs during the week. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks were little changed after the central government unveiled on Friday a historic rescue package to stabilize the country’s ailing property sector. The Shanghai Composite Index(SSE) was broadly flat, while the blue chip CSI 300 added 0.32%. In Hong Kong, the benchmark Hang Seng Index added 3.11%. (Refer to the above weekly performance table).

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

1.   The People’s Bank of China (PBOC) lowered the minimum down payment ratio by 5% to 15% for first-time buyers and to 25% for second home purchases in an attempt to ignite demand. The PBOC also said that it would scrap the nationwide floor level of mortgage rates and allow cities to make their own decisions on what mortgage rates to charge. 

2.   The unprecedented support package came as data showed no sign of turnaround in China’s yearslong housing crisis. New home prices in China fell by 0.6% month on month in April, according to the statistics bureau, marking the 10th straight monthly decline and the steepest drop since November 2014. 

3.   Inflation data showed that deflationary pressure continued to weigh on China’s economy. China’s consumer price index rose 0.3% in April from a year ago, accelerating from March’s 0.1% increase and marking the third consecutive positive reading. However, the producer price index fell 2.5% from a year ago compared with a 2.8% drop in March.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index ended the week higher by 0.69%. Immediate resistance level is around 3325, immediate technical support 3282-20dma level.

STI Index component stocks weekly return:

STI weekly chart

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

Stocks Climb Back Toward Record Highs

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Table of Content:

1.    Major indexes weekly performance 

2.    S&P 500 sector index weekly performance 

3.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week ended May 10, all the U.S three major indexes closed higher. The S&P 500 Index(SPX) neared its all-time high and recorded its third consecutive week of gains. The other major indexes also advanced, with value stocks generally outperforming growth shares. The rebound over the past three weeks was helped by a better-than-expected earnings season. Artificial intelligence remains a key theme that continues to benefit the mega-cap tech and the Magnificent Seven stocks specifically. Refer to below major indexes weekly and monthly performance table.

Key highlights for the week and next:

1.    Earnings. About 90% of the S&P 500 companies have now reported earnings for the first quarter. Results have so far exceeded analyst estimates by 8.5%, which is the biggest upside surprise since the third quarter of 2021, with earnings growing 5.5% from last year. 

2.    Jobless claims hit highest level since August. The number of people claiming unemployment benefits rose to 231k in the week ended the previous Wednesday, its highest since last August. A surprise rise in weekly jobless claims at least in the eyes of investors. 

3.    Another sign of cooling labour market was the University of Michigan reported that its preliminary index of consumer sentiment in May tumbled unexpectedly to 67.4, down from a final reading of 77.2 in April and marking its lowest level in six months.

SPX sectors in play

All the 11 sectors of SPX closed with gains. Utilities(XLU) and Financials( XLF)   outperformed. Consumer Discretionary(XLY) and Energy(XLE) lagged. From earnings standpoint, communication services, consumer discretionary and technology continue to stand out for their strong growth, but other areas are also delivering solid results, namely industrials, financials and consumer staples. The only three sectors that are seeing earnings declines for the quarter are energy, materials and health care, with the latter reflecting a quarterly accounting loss from Bristol Myers. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All three indexes are approaching their all-time highs after three weeks rally. Bulls seem strong and uptrend is well intact. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks advanced as recovery hopes rose following buoyant holiday spending during the prior week’s Labor Day holiday. The Shanghai Composite Index(SSE) rose 1.6%, while the blue chip CSI 300 added 1.72%. In Hong Kong, the benchmark Hang Seng Index added 2.64%. (Refer to the above weekly performance table).

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

1.    The private Caixin/S&P Global survey of services activity reached 52.5 in April, down from March’s 52.7, as expected, and marked its 16th monthly expansion. The Caixin/S&P composite purchasing managers’ index, which tracks both the services and manufacturing sectors, edged up to 52.8 from 52.7 in March as overall business activity expanded in April. 

2.    Tourism revenue over the five-day break rose 7.6% compared with the 2023 holiday and surpassed pre-pandemic levels, according to data from the Ministry of Culture and Tourism. Domestic revenue rose 12.7% from last year, while international trips also picked up. 

3.   China’s exports rose by 1.5% in April from a year earlier, up from a 7.5% decline in March, and broadly in line with consensus estimates.

Hang Seng Index component stocks weekly return(click to enlarge):

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index ended edged lower 0.07%. As banks down after ex-dividend. Next major resistance level is around 3400 previous highs, immediate technical support 3250 level.

STI Index component stocks weekly return:

STI weekly chart

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

Stocks Rally on Fed Rate-cut Hopes

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Table of Content:

1.    Major indexes weekly performance 

2.    Major indexes monthly performance for April 

3.    S&P 500 sector index weekly performance 

4.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week ended May 3, U.S major indexes ended higher following a volatile week featuring a raft of economic and earnings data. Latest reported nonfarm payroll less than expected, and easing wage growth, bolstering investors' confidence the Federal Reserve will eventually lower interest rates. The S&P 500 index (SPX) and the Nasdaq Composite ($COMP) both ended at three-week highs. Refer to below major indexes weekly and monthly performance table. 

Index Monthly performance for April:

Key highlights for the week and next:

1.    Nonfarm payrolls reported on Friday increased 175k during April, down from an upwardly revised 315k in March and the smallest monthly increase since last October. Payrolls fell short of expectations for a gain of about 250,000. 

2.    On Friday, the Institute for Supply Management reported that its gauge of services sector activity had fallen back into contraction territory for the first time since December 2022. 

3.    Fed two-day policy meeting concluded in the week stated policymakers were not cut rates—and rates were left steady at the meeting, as was widely expected—neither did they see the need to increase rates given the “sufficiently restrictive” current stance of monetary policy. 

4.   Corporate earnings. It was the second-busiest week of first-quarter earnings reports, Apple’s earnings beat market forecast and seemed to help drive a rebound in overall sentiment. Also announced to buy back USD 110 billion of its own shares, the largest such repurchase in history. Another notable mover for the week was Tesla, which surged over 15% on Monday after founder Elon Musk made a surprise appearance in China following news of the government’s tentative approval of the self-driving technology the company has under development.

SPX sectors in play

For the week, Nine out of the 11 sectors of SPX closed positive. Utilities(XLU) and Real Estate(XLRE) outperformed. Technology(XLK) and Consumer Discretionary(XLY) also among top gainers. Financials( XLF) and Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

SPX and COMP indexes both ended 2^nd consecutive week up while Dow ended 3^rd weekly gains in a row. All three major indexes weekly uptrend seem well intact.  Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose in a holiday-shortened week on hopes that the government will ramp up support. The Shanghai Composite Index(SSE) gained 0.52%, while the blue chip CSI 300 added 0.56%. In Hong Kong, the benchmark Hang Seng Index added 4.67%. Markets in mainland China were closed from Wednesday for the Labor Day Holiday and will reopen on Monday, May 6. Hong Kong markets were closed Wednesday but reopened Thursday. (Refer to the above weekly performance table).

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

1.    China’s top decision-making body, the 24-member Politburo, pledged to implement prudent monetary and fiscal support to shore up demand at its April meeting last Tuesday. Officials stated that China would make flexible use of monetary policy tools to restore growth, including possible cuts to interest rates and the reserve requirement ratio, which sets the amount of cash that banks must set aside in reserve. 

2.    Official PMI was a better-than-expected reading of 50.4 in April, down from March’s 50.8, marking the second straight monthly expansion. The nonmanufacturing PMI reached a below-consensus 51.2, easing from 53 in March, as new orders and services activity stalled from the prior month. Separately, the private Caixin/S&P Global survey of manufacturing activity edged up to a better-than-expected 51.4 in April, marking its 16th month of expansion.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index ended its 2^nd weekly gains, reaching new highs since Aug last year. Banks such as DBS were among top gainers of the week, pushing the index higher, next major resistance level is around 3400 previous highs. Immediate technical support 3250 level.

STI Index component stocks weekly return:

STI weekly chart

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