U.S Stocks Rebound After Sell-off, Yields Hit New 52-week Lows

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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 of Sep 13, major U.S. indexes post solid gains and largely recovered from the previous week’s steep losses, which saw the S&P 500 Index(SPX) suffer its worst weekly decline since March 2023. Growth stocks outpaced value shares by a wide margin, helped by strong performance from technology stocks. NVIDIA was a particularly strong contributor after the chip giant offered a positive outlook on artificial intelligence at an investment conference. Refer to below major indexes weekly performance table.

Key highlights for the week and next:

1.   Inflation. Core inflation slightly higher than expected. On Wednesday, stocks initially headed sharply lower following news that core (less food and energy) consumer inflation rose to 0.3% in August, a tick higher than consensus expectations. Meanwhile, headline inflation showed an annual increase of 2.5%, well below July’s increase of 2.9% and its lowest level since early 2021. In any case, it appeared the news from NVIDIA seemed to help drive a turnaround later Wednesday morning. 

2.    Interest rate. Treasury yields ticked lower during the week with the yield on the benchmark 10-year Treasury note trading at year-to-date lows. 

3.    Fed rate cut. The futures market is evenly divided on whether the Federal Open Market Committee (FOMC) will cut rates by 25 basis points (0.25%) or a more-aggressive 50 basis points (0.5%) when it concludes its policy meeting next Wednesday. 

SPX sectors in play

All but one of the 11 SPX sectors closed with gains for the week. Growth stocks including Tech(XLK) and Consumer Discretionary(XLY) sectors outpaced value shares including Consumer Staplers (XLP) and Financials(XLF) by a wide margin, helped by strong performance from technology stocks. NVIDIA was a particularly strong contributor after the chip giant offered a positive outlook on artificial intelligence at an investment conference. Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Dow(DJI) and SPX bounced back to near its peak while Nasdaq Composite(COMP) is about 5% away to its peak. All three indexes are currently trading above their 20/50 and 200dma, which is a bullish trend. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

 

China/HK

China stocks declined as weak inflation data spurred concerns about a downward price-wage spiral weighing on the economy. Both the Shanghai Composite Index(SSE) and the blue chip CSI 300 fell 2.23%. In Hong Kong, the benchmark Hang Seng Index gave up 0.43%. (Refer to the above weekly performance table).

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

1.    China’s consumer price index rose 0.6% in August from a year earlier, up from 0.5% in July, but below economists’ forecasts. Core inflation, which strips out volatile food and energy costs, increased 0.3%, slowing from July’s 0.4% rise, and marked the lowest level in over three years. The producer price index fell 1.8% from a year ago, lagging forecasts and deepening from July’s 0.8% drop, extending the deflation in factory gate prices that began in late 2022. The latest data spurred calls for Beijing to roll out more forceful measures to stave off a negative cycle of falling corporate revenue, wages, and spending that many analysts believe threatens China’s longer-term growth. 

2.    Exports exceeded forecasts in August, rising 8.7% from a year earlier, up from 7% growth in July. Imports expanded a lower-than-expected 0.5% in August, easing from July’s 7.2% gain. The overall trade surplus increased to USD 91.02 billion from USD 84.65 billion in July. China’s exports have been a bright spot for its economy, which is mired in a prolonged property crisis. However, analysts cautioned that overseas demand could face volatility due to the slowing U.S. economy and rising trade tensions.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

STI index recorded a remarkable 5^th consecutive weekly gain, added 3.13% to its multi-year high since May 2018.  Blue chip industrials and banks led the rally. 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.