Stocks Continue Climbing Higher as Gains Appear to Broaden

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly performance 

4.   China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

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

U.S.

For the week ended Jun 21, the three U.S major indexes recorded modest gains over the shortened trading week, helping push the S&P 500 Index(SPX) to fresh all-time highs. The week also saw modest signs of a broadening and rotation in the market, with value stocks outperforming growth shares and most of the major benchmarks outperforming the technology-heavy Nasdaq Composite(COMP). Refer to below major indexes weekly performance table.

Key highlights for the week and next:

1.    Nvidia(NVDA) unseated Microsoft(MSFT) as the world's most valuable company intra-week before its profit-taking Thursday and Friday, with a market capitalization 30% larger than the entire small-cap universe. Top three of most valuable companies by market cap by Friday: Microsoft 3.34T, Apple $3.18T, Nvidia $3.11T. 

2.    Fed interest rate cut. Current market pricing implies a 60% chance of a September cut followed by one more in December. 

3.    As reported on Tuesday, retail sales had increased only 0.1% in May, according to advance estimates, while falling a downwardly revised 0.2% in April. Growth was positive but slower than expected, suggesting that consumers are exercising more caution amid tighter budgets. 

4.    The Federal Reserve announced that industrial production had expanded 0.9% in May, well above consensus expectations and the fastest pace in nearly a year. Factories were also operating at 78.7% of capacity, a tick above expectations and the highest level since last November. 

5.    Important economic data release coming week: Personal Consumption Expenditures (PCE) price index report, the Fed's preferred inflation gauge.

 

SPX sectors in play

Only three out of the 11 sectors of SPX closed with gains. Technology( XLK) outperformed while Energy(XLE) and Financials(XLF) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and COMP hit new record highs again this week. Both indexes recorded 3^rd consecutive weekly gains. Nvidia broke an eight-week winning streak with a 4% weekly slide. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks fell as mixed economic data dampened investor sentiment. The Shanghai Composite Index(SSE) declined 1.14%, while the blue chip CSI 300 gave up 1.3%. In Hong Kong, the benchmark Hang Seng Index gained 0.48%. (Refer to the above weekly performance table).

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

1.    China’s Industrial production rose a weaker-than-expected 5.6% in May from a year earlier, slowing from April's 6.7%. Fixed asset investment grew 4% in the calendar year to May compared with a year ago but eased from the January to April period as real estate investment declines deepened. Meanwhile, retail sales increased an above-consensus 3.7% in May from a year earlier and outpaced April’s 2.3% gain. The nationwide urban unemployment rate remained steady at 5%. 

2.    The People’s Bank of China injected RMB 182 billion into the banking system via its medium-term lending facility and left the lending rate unchanged at 2.5%, as expected. 

3.    New home prices extend declines. China’s new home prices fell 0.7% in May, accelerating from a 0.6% drop in April, marking the steepest month-on-month contraction in nearly a decade, according to the statistics bureau.

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, ended two weeks down streak with 0.26% gain. It’s hovering its downtrend line, appears to be in consolidation (refer to STI weekly chart below). Immediate major resistance level is around 3400, 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.

Fed Signals One Rate Cut in 2024, Stocks Continue Narrow Advance

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Main Content:

1.   Major indexes weekly performance 

2.   U.S stocks weekly wrap 

3.   S&P 500 sector index weekly performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

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

U.S.

For the week ended Jun 14, the three U.S major indexes ended mostly higher, with the S&P 500 Index(SPX) and Nasdaq Composite(COMP) touching new highs. The market’s advance remained exceptionally narrow for the second consecutive week. AI related stocks appeared to provide a continuing tailwind to technology-related stocks and growth shares. Refer to below major indexes weekly performance table.

Key highlights for the week and next:

1.    The June FOMC meeting and U.S. inflation data were front and center for the week, with both offering some positive news for the bulls. 

2.   As expected, the Federal Reserve also kept rates on hold at its June meeting at 5.25% - 5.5%. The Fed's updated set of estimates pointed to one rate cut in 2024, down from the three rate cuts forecast at its March meeting. 

3.    Inflation data came in lower than expected, with headline CPI inflation for May coming in at 3.3% year-over-year, below forecasts and last month's 3.4%. Core inflation, excluding food and energy, was 3.4% in May, below forecasts of 3.5% and last month's 3.6%. After a string of hotter U.S. inflation readings for the first three months of the year, last week's reading was welcome news for markets. 

SPX sectors in play

Only three out of the 11 sectors of SPX closed with gains. Growth stocks outpaced value. Technology( XLK) and Consumer Discretionary(XLY) outperformed while Energy(XLE) and Financials(XLF) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and COMP hit new record highs this week. Google parent Alphabet (GOOGL) and Nvidia (NVDA) helped the COMP index edge to an all-time high for the fifth consecutive day after previous week pull back. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks fell in a holiday-shortened week as data showed that deflationary pressures continued to weigh on the economy. The Shanghai Composite Index(SSE) declined 0.61%, while the blue chip CSI 300 gave up 0.91%. In Hong Kong, the benchmark Hang Seng Index was down 2.31%. (Refer to the above weekly performance table). Markets in China were closed Monday for the Dragon Boat Festival.

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

1.    China’s consumer price index rose a below-expected 0.3% in May from a year earlier, unchanged from April’s rise. Core inflation, which strips out volatile food and energy costs, rose 0.6%, slowing from April’s 0.7% increase. The producer price index fell 1.4% from a year ago, its 20th month of decline, but eased from a 2.5% drop in April. Weak consumer confidence and a protracted property sector slump have kept a lid on prices in China despite numerous measures from Beijing to prop up the economy and markets over the past year. 

2.   Data from the Dragon Boat Festival highlighted the consumer caution in China. Tourism revenue over the three-day holiday rose 8.1% from the 2023 break but lagged pre-pandemic levels, according to Ministry of Culture and Tourism data. Domestic traffic rose 6.3% from last year. However, average spending per traveler fell 12.3% from 2019, Bloomberg reported, citing Citigroup research. Some analysts predict that the government will continue rolling out support to stoke demand as weak consumer sentiment remains a drag on the economy.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index was down for 2^nd week, lost 1%, after it hit major technical resistance(refer to STI weekly chart below). However, it appears to be a healthy pull-back while it still trading well above its major moving averages 20/50 and 200 weekly MA. Immediate resistance level is around 3400, 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.

The SPX and Nasdaq Ended the Week with Record High

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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 Jun 7, the three U.S major indexes closed higher. The S&P 500 Index(SPX) and technology-heavy Nasdaq Composite(COMP) reached record intraday highs, but the smaller-cap indexes(RUT) pulled back. Relatedly, growth stocks outpaced value shares by the widest amount since early in the year, as falling longer-term interest rates increased the notional value of future earnings. Refer to below major indexes weekly performance table.

Key highlights for the week and next:

1.    Economic data on Friday reported stronger-than-expected payroll and wage growth in May, further dampening hopes for Federal Reserve interest rate cuts this year. However, the S&P 500 still ended the week higher, its sixth weekly gain out of the past seven. Nonfarm payrolls grew by 272k last month, a sharp jump from 165k in April and well above analysts' expectations for a gain closer to 185k. 

2.    Mixed inflation signals. The unemployment rate increased, average hourly earnings rose 0.4%, above consensus and the most since January. The ISM data suggested that overall price pressures were concentrated in the much larger services sector while easing in the struggling manufacturing sector, due largely to falling commodity prices. 

3.    The focus now shifts to next week's Consumer Price Index (CPI) report and the Fed's policy meeting on June 11–12.

 

SPX sectors in play

Five out of the 11 sectors of SPX closed with gains. Growth stocks outpaced value. Some of the steam seemed to come out of the fast-growing artificial intelligence (AI) sector, however. News arrived that U.S. officials have slowed the issuing of licenses to chipmakers for AI chip sales to the Middle East and were opening antitrust investigations into Microsoft and NVIDIA over their dominance of AI. Technology(XLK) and Communication Services(XLC) were among top performers while Energy(XLE) and Utilities(XLU) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and COMP rebounded and hit record high after previous week pull back.  Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks retreated despite data showing that the property sector may be gaining traction. The Shanghai Composite Index(SSE) declined 1.15%, while the blue chip CSI 300 gave up 0.16%. In Hong Kong, the benchmark Hang Seng Index rose 1.59%. (Refer to the above weekly performance table).

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

1.    The value of new home sales by the country’s top 100 developers rose 11.5% in May, up from April’s 3.4% increase, according to the China Real Estate Information Corp. New home sales slumped 33.6% in May from a year ago but eased from April’s 45% decline. The data boosted hopes that China’s property market downturn, now in its fourth year, may start to recover after Beijing announced a rescue package in May to stabilize the struggling sector. 

2.    The private Caixin/S&P Global survey of manufacturing activity edged up to 51.7 in May from April’s 51.4, marking its seventh monthly expansion. The Caixin services purchasing managers’ index reached an above-consensus 54 in May, rising from 52.5 in April. 

3.    China’s exports rose a better-than-expected 7.6% in May from a year earlier, up from 1.5% growth in April. Imports increased a weaker-than-expected 1.8% in May, slowing from April’s 8.4% rise. The overall trade surplus increased to USD 82.62 billion, up from USD 72.35 billion in April.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index edged lower 0.17% for the week after three-week winning streak. The index appear still bullish, expect profit taking as it approaching major resistance level. Immediate resistance level is around 3400, immediate technical support 3300 level.

STI Index component stocks weekly return:

STI weekly chart

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

The SPX Ended its Five-week Win Streak But is Still Up For May

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Table of Content:

1.    Major indexes weekly performance 

2.    Major indexes monthly performance for May 

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 31, the U.S major indexes closed lower over the holiday-shortened week but rounded out a month of gains. The S&P 500(SPX) ended its five-week win streak but is still up for May as investors maintain subdued expectations for Fed rate cuts. The technology-heavy Nasdaq Composite(COMP) was especially weak, due in part to a sharp decline in cloud software provider Salesforce(CRM), which fell sharply after releasing first-quarter revenues that missed consensus estimates. Markets were shuttered Monday due to public holiday. Refer to below major indexes weekly performance table.

In this May, all major indexes but one-SSE index in my watchlist closed with gains. The technology-heavy Nasdaq Composite Index(COMP) outperformed with 6.9% gains. Refer to below major indexes monthly performance table for May.

Key highlights for the week and next:

1.    Inflation check. This week’s most notable economic calendar was personal consumption expenditure (PCE) price index report, released Friday morning. PCE rose 0.3% overall in April, meeting analysts' forecasts. Core (less food and energy) PCE prices - widely considered the Federal Reserve’s preferred inflation gauge rose 0.2% in April, down slightly from the previous two months and seemingly a period of calming inflation pressures following January’s 0.5% spike.

2.    Interest rate. On Friday, traders priced approximately 53% odds the fed funds rate will be at least one quarter-point lower following the FOMC's September meeting, up from around 50% a day ago, based on the CME FedWatch Tool. The tool priced a nearly 100% chance the rate will be unchanged after the June FOMC meeting. The market also awaits the June 11–12 Federal Open Market Committee (FOMC) meeting, which is expected to end with no change to the funds rate.

SPX sectors in play

Eight out of the 11 sectors of SPX closed with gains. Small-caps performed better than large-caps, and value stocks held up better than growth shares. Utility(XLU) and Energy(XLE) outperformed this week. Technology(XLK) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and COMP ended their 5-week win streak and closed lower this 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 an unexpectedly weak manufacturing reading highlighted growth headwinds on the economy. The Shanghai Composite Index(SSE) edged lower 0.07%, while the blue chip CSI 300 gave up 0.6%. In Hong Kong, the benchmark Hang Seng Index fell 2.84%. (Refer to the above weekly performance table).

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

1.    The official manufacturing purchasing managers’ index (PMI) fell to a below-consensus 49.5 in May from 50.4 in April, marking the first monthly contraction since February. The nonmanufacturing PMI, which measures construction and services activity, slipped to a weaker-than-expected 51.1 from 51.2 in April amid slower construction growth. Separately, profits at industrial firms rose by 4% in April from a year ago and recovered from a 3.5% decline in March, according to the National Bureau of Statistics. 

2.    Although both PMI readings underscored pockets of weakness in China’s economy, most economists believe that China will meet its growth target this year of around 5%. Earlier in the week, the International Monetary Fund upgraded its 2024 economic growth forecast for China to 5%, up from its April projection of 4.6%, following Beijing’s support measures and a stronger-than-expected first-quarter expansion. 

3.    Officials in Shanghai announced measures to shore up homebuying demand in China’s largest city. Measures included lowering the minimum down payment ratio for home purchases, reducing the minimum interest rates on first home mortgages, and relaxing social insurance and income tax payment requirements for non-Shanghai residents. Other major cities expected to follow up.

Hang Seng Index component stocks weekly return:

Click below title to view weekly charts.

SSE weekly chart

HSI weekly chart

Singapore

STI index gained 0.6% for the week despite other major indexes in the rea of red. The index has had its three week win streak so far and appears bullish with more room to upside. Immediate resistance level is around 3400, immediate technical support 3300 level.

STI Index component stocks weekly return:

STI weekly chart

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