U.S Stocks at 1-Month High on Rate Hopes

Join SgTraderClub Facebook group HERE for daily stocks and market updates, and more.

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 Aug 23, major U.S. indexes wrapped up with a flourish, the Dow Jones Industrial Average(DJI) and S&P 500 Index(SPX) moved back toward record highs, after Federal Reserve Chairman Jerome Powell reinforced expectations for a 25-basis-point rate cut next month.  

The gains were also broad-based, rate-sensitive small caps, EVs, and homebuilders got the most traction. Moreover, Powell appeared to leave room for the possibility that rates could be cut by 50 basis points (0.50 percentage points) instead of the usual 25 basis points (0.25 percentage points). Nvidia reports next week. Refer to below major indexes weekly performance table.

Key highlights for the week and next:

1.   Sep rate cut. During the Fed’s annual symposium in Jackson Hole, the much-anticipated speech from Fed Chair Powell on Friday, it’s expected that interest-rate cuts will commence in September. Interest-rate cuts are typically favorable for the markets. 

2.    Focus shifting from inflation to employment. With the trend of inflation continues moderate, and the economy showing a bit of fatigue recently, it’s expected the Fed’s attention will now be more balanced, with effort to support the labour market and economy playing a more prominent role in upcoming rate decisions.

SPX sectors in play

All 11 except Energy(XLE) sectors of SPX closed with gains for the week.  Rates sensitive sectors such as the Real Estate(XLRE), Materials(XLB) and Industrial(XLI) were among top gainers, rate-sensitive small caps, EVs, and homebuilders got the most traction. while Tech(XLK) and Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The major indexes recorded 2^nd weekly gains. The SPX closed fully recovered its early Aug losses. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks fell as a light economic calendar and caution ahead of Fed Chair Powell’s Jackson Hole speech kept buyers on the sidelines. The Shanghai Composite Index(SSE) declined 0.87% and the blue chip CSI 300 lost 0.55%. In Hong Kong, the benchmark Hang Seng Index was up 1.04%. (Refer to the above weekly performance table).

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

1.    China’s central bank kept its benchmark lending rates unchanged, reflecting policymakers’ desire to protect profit margins for banks. The People’s Bank of China (PBOC) kept the one-year loan prime rate at 3.35% and the five-year loan prime rate (LPR), a policy rate for mortgages and other long-term loans, at 3.85%. Economists largely expected the PBOC’s decision to stay pat on both LPRs after the bank unexpectedly trimmed several key rates in July. However, many economists see room for further loosening in China this year once the Fed starts cutting rates in the U.S. 

2.    Search engine leader Baidu reported its second-quarter revenue came in lower than expected even as earnings beat analysts’ forecasts. The Beijing-based company, often described as China’s Google, said that revenue for the quarter ended June fell 0.4% to RMB 33.9 billion. 

3.   Alibaba gains as it announced to voluntarily convert its secondary listing to primary listing in HK, it will become dual primary listed on the Hong Kong Stock Exchange and the New York Stock Exchange. The move would qualify the technology behemoth to sell shares to mainland China’s 220 million stock investors possibly starting on September 9, which could attract US$12 billion in funds.

SSE weekly chart

.HSI weekly chart

Singapore

STI index recorded 2^nd consecutive weekly gains, has since fully recovered its early Aug losses. The index is trading above all its major moving averages i.e 20, 50 and 200dma, which indicate a bullish trend. Refer to below index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

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

U.S Stocks Continue “V-Shape” Recovery from Aug 5 Sell-Off

Join SgTraderClub Facebook group HERE for daily stocks and market updates, and more.

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 Aug 16, major U.S. indexes recorded a solid week of gains, as investors appeared to celebrate positive news on both the inflation and growth fronts, which together bolstered hopes that the economy might achieve a “soft landing.” The technology-heavy Nasdaq Composite(COMP) led the gains and ended the week up 12.24% off its intraday lows amid the sell-off on August 5.

The S&P 500(SPX) rebounding by over 6.5% and the 10-year Treasury bond yield, which had gotten as low as 3.66% during the market volatility, since climbing to about 3.9%, signaling some return of confidence in the broader economy. In addition, the VIX volatility index, known as “Fear Index”, climbed as high as 65 on August 5, its highest since 2020, but has since come back down to under 15, in line with the average over the past year. Refer to below major indexes weekly performance table.

Key highlights for the week and next:

1.    Inflation data continues to moderate, with both consumer price index (CPI) and producer price index (PPI) inflation coming in softer than expected for the month of July. Headline PPI inflation came in at 2.2% annually, below forecasts of 2.3%, while headline CPI inflation came in at 2.9%, also below expectations of 3.0% 

2.    Economic data better than expected. Both retail sales and jobless claims coming in better than forecast. The monthly retail-sales growth came in at 1%, well above the forecasts for 0.4% and last month's -0.2%. Most recent Jobless claims at 227k, which have come in steadily lower. These measures point to a U.S. economy that may be cooling but certainly not on the precipice of a sharp downturn or recessionary environment. 

3.    It’s expected the Fed that will likely begin cutting rates as soon as the September 18 FOMC meeting. Coming week's annual Fed Jackson Hole Symposium will be closely watched (August 22-24), as Fed Chair Jerome Powell and team may use this as an opportunity to signal the first Fed rate cut.

 

SPX sectors in play

All 11 sectors of SPX closed with gains for the week. The recovery has once again been led by the technology(XLK) and growth sectors, which had also been down the most during the recent pullback. Artificial intelligence chip giant NVIDIA was especially strong, gaining 18.93% over the week.  Growth stocks handily outpaced value shares.

Consumer discretionary(XLY) stocks also performed well, with Starbucks(SBUX) surging 24.50% on Tuesday on news that it was replacing its CEO with one credited with engineering a turnaround at Chipotle(CMG). Likewise, Walmart(WMT) gained 6.58% on Thursday following its earnings report, which beat consensus expectations. The company also surprised analysts by raising its profit and revenue outlook for the remainder of the year. Shares of Google parent Alphabet(GOOGL)fell at midweek, however, following reports that the Justice Department was investigating breaking up the company, which would mark the largest such action since AT&T(T) was dismantled in the 1980s. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The major indexes continue its rebound and recovered most of its recent losses. The SPX is just 2% below its high 5 weeks ago. All three indexes 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 rose as investor sentiment was largely unaffected by weaker-than-expected economic activity. The Shanghai Composite Index(SSE) gained 0.6% and the blue chip CSI 300 added 0.42%. In Hong Kong, the benchmark Hang Seng Index was up 1.99%. (Refer to the above weekly performance table).

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

1.   July data highlighted weakness in China’s economy. Industrial production rose a below-consensus 5.1% in July from a year earlier, slowing from June’s 5.3% increase, partly due to lower auto sales. Retail sales expanded a better-than-expected 2.7% in July from a year earlier, up from a 2% increase in June. Fixed asset investment rose 3.6% in the January to July period from a year ago, lagging forecasts, while property investment fell 10.2% year on year. The urban unemployment rate edged up to 5.2% from 5% the prior month. 

2.    New bank loans rose a weaker-than-expected RMB 260 billion in July, down sharply from RMB 2.13 trillion in June, while loan growth in July slowed to 8.7% year on year. July’s weak credit data raised speculation that the central bank may cut interest rates further to fuel demand as China’s prolonged property market slump continues to hit consumer confidence. 

3.    New home prices in 70 cities fell 0.7% in July, unchanged from the pace of declines in the prior two months and marking the 13th straight monthly drop, according to China’s statistics bureau. While data suggested that the government’s property rescue package introduced in May has spurred demand in major cities, buying interest remained sluggish in smaller towns, according to Bloomberg.

SSE weekly chart

.HSI weekly chart

Singapore

STI index rallied 2.79% this week after 4-week down streak. The index tested its 200dma recently and bounced back strongly since then, led by the local banks and other blue chips. Refer to below index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

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

U.S Stocks Managed to Recover Most of Their Losses In A Tumultuous Week

Join SgTraderClub Facebook group HERE for daily stocks and market updates, and more.

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 Aug 9, major U.S. indexes closed modestly lower after recovering from the biggest sell-off in nearly two years. The S&P 500 Index(SPX) neared correction territory (down over 10%) on Monday, when it fell as much as 9.71% from its intraday high in mid-January; around the same time, the Nasdaq Composite (COMP) was down 15.81% from its peak, after entering a correction the previous Friday. Even more pronounced were the swings in the CBOE Volatility Index (VIX), Wall Street’s so-called fear gauge, which briefly spiked Monday to 65.73, its highest level since late March 2020, before falling back to end the week at 20.69.

The proximate cause was an overnight plunge in Japan's Nikkei 225 index—triggered by a strengthening yen and concerns about U.S. economic growth—which spread across Asia and Europe as trading started for the week.Refer to below major indexes weekly performanc table.

Key highlights for the week and next:

1.    On Monday, the Dow Jones index shed 1,034 points, the 12th-largest single-day point decline on record. Historically, there have been 25 total daily moves in the Dow of more than 1,000 points, 14 down and 11 up. While the size is eye-catching, keep in mind that last Monday's 1,034-point move was a decline of 2.6%. The similar 1,033-point drop on February 8, 2018, was a 4.2% move. 

2.    The 3% decline in the S&P 500 on Monday captured significant attention, putting the S&P 500 just 8% off of its all-time high. But the stock market is still up nearly 20% over last year and 50% since this bull market began in October of 2022. 

3.    In fact, over the last quarter-century, there were an average of about three times a 5%-plus decline per year. Over the last several decades, on average, we've experienced roughly one 10% correction per year. 

4.    A reassuring drop in weekly jobless claims on Thursday seemed partly responsible for a bounce-back rally, with the S&P 500 scoring its best daily gain since November 2022. Weekly claims fell to 233k from an upwardly revised 250k. 

5.    Investors are now pricing in nearly 52% odds the Federal Reserve will cut its benchmark rate by half a percentage point when its rate-setting body meets next month, according to the CME FedWatch Tool. As recently as late July, investors were nearly unanimous the Fed would opt for a smaller quarter-point cut.  

6.    What’s in focus: The latest inflation report coming this week (Wednesday, 8/14), as well as ongoing election and geopolitical anxieties, represent additional catalysts for volatility.

 

SPX sectors in play

Five out of the 11 sectors of SPX closed with gains for the week. Defensive names were among top gainers but market leadership seems broaden out to all sectors from the narrowed mega-tech names previously. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The major indexes managed to recover most of their losses to close out a tumultuous week. DJI index ended 2^nd weekly decline, Nasdaq(COMP) and SPX closed with 4^th weekly decline. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks retreated as a stronger-than-expected increase in consumer prices failed to offset concerns about deflationary pressures. The Shanghai Composite Index(SSE) fell 1.48% and the blue chip CSI 300 gave up 1.56%. In Hong Kong, the benchmark Hang Seng Index gained 0.85%. (Refer to the above weekly performance table).

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

1.    China’s consumer price index rose 0.5% in July from a year earlier, from June’s 0.2% rise. Analysts attributed the increase to seasonal factors, such as bad weather conditions and a low base for pork prices in 2023. Core inflation rose 0.4%, narrowing from 0.6% in June and marking the lowest growth since January, according to Bloomberg. The producer price index fell 0.8% from a year ago, unchanged from June and marking its 22nd month of decline. 

2.    Separately, the private Caixin/S&P Global survey of services activity edged up to a better-than-forecast 52.1 in July from 51.2 in June, marking its 19th straight month of expansion, according to Reuters. However, the Caixin composite purchasing managers’ index (PMI) softened to 51.2 from 52.8 in June as the Caixin manufacturing PMI unexpectedly contracted for the first time in nine months the prior week. The mixed PMI readings highlighted the uneven growth of China’s economy amid a prolonged property slump that has hit domestic consumption even as manufacturing and exports have showed strength. 

3.   Imports exceeded forecasts in July, rising 7.2% from a year earlier, up from a 2.3% decline in June. Exports rose a lower-than-expected 7% in July due to sluggish demand. The overall trade surplus was USD 84.65 billion, down from USD 99.05 billion in June. The decline in exports raised concerns about softening global demand, which has been key for China’s economy this year, and helped compensate for sluggish domestic demand.

SSE weekly chart

.HSI weekly chart

Singapore

STI index declined 4^th week in a row, with 3.54% down this week. The index plunged below its 200dma(3225 point) intra-week and recovered and closed above it.

Refer to below index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

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

U.S Stocks Down Sharply as Jobs Growth Cools More Than Expected

Join SgTraderClub Facebook group HERE for daily stocks and market updates, and more.

Main Content:

1.    Major indexes weekly performance 

2.    Major indexes Monthly performance for Jul 

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 Aug 2, major U.S. indexes closed lower, as investors reacted to the busiest week of the quarterly earnings reporting season and arguably the most important week of monthly economic data. The recent rotation toward value stocks and small-caps stalled, at least in part, as the small-cap Russell 2000 Index pulled back sharply at the end of the week. The technology-heavy Nasdaq Composite(COMP) pulled back over 10% from its July high, putting it in a technical correction. Refer to below major indexes weekly performance table.

Refer to below major indexes monthly performance table for Jul.

Key highlights for the week and next:

1.    Interest rates. After a 2-day FOMC meeting, it was concluded Fed interest rate unchanged at 5.25% - 5.50%, as was expected, but it tweaked its statement to reflect the growing chance of a September rate cut. The start of an easing cycle is now in sight as focus shifts to jobs. 

2.    Jobs. The July payrolls report on Friday showed that the U.S. economy added 114k jobs, less than the 175k expected, with some modest downward revisions to prior months. The unemployment rate jumped to 4.3% vs. consensus of 4.1%, and wage growth increased 3.6%, the smallest gain in more than three years. 

3.    Inflation. Inflation is moving closer to target, providing breathing room for the Fed to ease. The unexpected jump in July's unemployment rate likely cements expectations for a September rate cut, potentially followed by one or two more cuts later in the year. 

4.    Mega-tech. Four of the Magnificent 7 stocks reported earnings (Microsoft, Meta, Amazon, Apple) in the week. The tech giants reported strong growth, but that wasn't enough to push prices higher, as the bar of expectations was high. The recent rotation out of growth stocks continues. 

5.    Volatility. Volatility was subdued in the first half of the year, with the VIX index, the so-called “fear indicator” a proxy for stock-market fluctuations, hovering around 14, which is 30% below its long-term average. But the VIX indicator spiked up 60% to as high as 29.66 on Friday to highest since Mar 2023 at one point and closed at 23.39, still a 26% gain in one day. 

6.    Jul ISM Manufacturing PMI fell unexpectedly to 46.6, its lowest level since last November and marking nearly two years of almost continuous contraction in the sector. 

7.    Bull market likely to continue. The economy continues to expand but at a slowing pace; productivity is on the upswing; and corporate earnings are rising.

SPX sectors in play

Five out of the 11 sectors of SPX closed with gains for the week. Defensive names outperformed growth. Utilities(XLU) was top gainer while Technology(XLK) lagged. Companies representing nearly 40% of the S&P 500’s market capitalization reported Q2 earnings during the week, including four of the Magnificent Seven—Microsoft, Meta Platforms (Facebook), Apple, and Amazon.com. Amazon.com shares fell over 11% in early trading Friday following the previous evening’s report and earnings call.

Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

DJI index closed with 1^st weekly loss after 4-week up streak, Nasdaq(COMP) and SPX closed with 3^rd weekly decline. Nasdaq(COMP) pulled back over 10% from its July high, putting it in a technical correction. SPX lost 5.7% in three weeks. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks were mixed after weak manufacturing data tempered investor sentiment. The Shanghai Composite Index(SSE) gained 0.5% and the blue chip CSI 300 was down 0.73%. In Hong Kong, the benchmark Hang Seng Index retreated 0.45%. (Refer to the above weekly performance table).

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

1.    China’s official manufacturing Purchasing Managers’ Index (PMI) slipped to 49.4 in July from 49.5 in June, marking the third consecutive monthly contraction as production and new orders declined, according to the National Bureau of Statistics. The nonmanufacturing PMI, which measures construction and services activity, slipped to 50.2 from 50.5 in June, as expected. In a statement following the release, officials attributed the declines to seasonal factors and extreme weather events in some cities in China. 

2.    The private Caixin/S&P Global survey of manufacturing activity unexpectedly contracted for the first time in nine months. The Caixin manufacturing PMI, which polls smaller, export-oriented firms, fell to a weaker-than-expected 49.8 in July from June’s 51.8. Taken together, the various PMIs suggested that momentum in China’s export sector, one of the few bright spots in its economy, was slowing. 

3.    Profits at industrial firms rose by 3.6% in June from a year ago, up from a 0.7% gain in May, according to official data. Analysts said a steady recovery in topline revenue amid stronger industrial production growth and slower producer price declines drove June’s rise. However, persistent weakness in domestic demand has raised speculation that Beijing will continue to roll out measures to shore up the economy as recent stimulus measures have done little to boost consumption.

SSE weekly chart

.HSI weekly chart

Singapore

STI index was in 3^rd weekly decline in a row, with 1.31% down this week. The index closed at 3381.45, just sitting above its 50dma level at 3380.8 level, which is a major support level to watch in coming week.

Refer to below index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

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