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.