Solid First Half 2024, SPX rose 4% for Q2 and 14% for 1H

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Main Content:

1.    Major indexes weekly performance 

2.    Major indexes monthly performance for June 

3.    U.S stocks weekly wrap 

4.    S&P 500 sector index weekly performance

5.    China/Hong Kong stocks weekly wrap

6.    Singapore stocks weekly wrap

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

U.S.

For the week ended Jun 28, most major U.S. stock indexes posted gains in a light news week during what seemed to be a bit of a lull in market activity ahead of second-quarter earnings reports. Small-cap(Russell 2000) and technology (Nasdaq Composite Index) performed best, with growth stocks outpacing their value cousins. It’s the end of quarter and end of first half of the year, the broader market(SPX) is up almost 4% since the end of March and 14% for the first half of the year. Refer to below major indexes weekly performance table.

Major indexes monthly perormance for the month of June.

Key highlights for the week and next:

1.    Stocks posted a strong first-half gain, helped by ongoing positive economic readings and the ongoing prospects of a Fed rate cut materializing this year. Strong first halves have historically seen markets go on to produce above-average full-year returns. 

2.    Winners in the first half included mega-cap technology (again), powered by ongoing excitement around AI. At the same time, some more traditionally defensive segments, areas like utilities and gold, also saw strong performance to start the year. 

3.    On the other side, what didn't fare as well in the first half were things like volatility (market swings were historically low), small-cap equities, and interest-rate predictions, which required material revisions amid incoming inflation and economic readings. 

4.    Enthusiasm around AI continued in full force in the first half, with the mega-cap technology names delivering outsized gains. The so-called Magnificent 7 (NVIDIA, Microsoft, Apple, Google, Tesla, Meta, Amazon) were in pole position again, logging an average gain of 39% (despite a double-digit decline for Tesla). NVIDIA continued in its role as the poster child for the AI mania in the markets, with shares rising around 150% as the company ascended to the top spot as the world's largest by market cap. 

5.    Core PCE inflation slows to rose 0.1% in May from 0.3% in April. Core PCE is the Fed’s preferred measure of inflation, so markets welcomed the deceleration from April’s upwardly revised 0.3% pace as an indication that a September Fed rate cut is more likely. 

6.    Q2 earnings will kick start coming into Jul. Mega-tech names continue under spotlight.

 

SPX sectors in play

Only two out of the 11 sectors of SPX closed with gains for the week. Energy(XLE), Communication Services(XLC) and Consumer Discretionary(XLY) outperformed, while Utilities(XLU) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both COMP and SPX hit new record highs intra-week before closing off their best levels. COMP edged high 4^th week gains in a row while SPX edged lower on close. All three major indexes i.e SPX, COMP and DJI uptrend are still well intact, expected some sideways consolidation going forward short term. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks weakened as a light economic calendar and concerns about the slowing economy curbed risk appetite. The Shanghai Composite Index(SSE) declined 1.03%, while the blue chip CSI 300 gave up 0.97%. In Hong Kong, the benchmark Hang Seng Index lost 1.72%. (Refer to the above weekly performance table).

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

1.    China’s Industrial profits at large companies edged up 0.7% in May from a year earlier, the National Bureau of Statistics reported, down from April’s 4% gain. China’s official purchasing managers’ index(PMI) for June just released on Sunday(30 Jun) was 49.5 same as forecasted. The private sector Caixin factory survey will be out on July 1. 

2.    Foreign selling also contributed to the week’s declines. Global funds sold about RMB 49.4 billion of onshore shares via trading links with Hong Kong in June through last Wednesday, Bloomberg reported, putting China’s market on track for its first monthly outflow since January. The selling pressure from overseas investors comes as many Chinese companies have disappointed investors with lower-than-expected quarterly earnings, underscoring the economy’s weak growth outlook.

Click below title to view weekly charts.

SSE weekly chart

.HSI weekly chart

Singapore

STI index closed positive this week again for 2^nd consecutive week, with 0.81% gain. Technically, the index appears bullish, trading above all major moving averages. Immediate major resistance level is around 3400, immediate technical support 3250 level.

STI weekly chart

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