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.