U.S. Stocks on 2nd Losing Week on Rising Yield Ahead of Nov 5 Election

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month 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 Nov 1, the major indexes finished mostly lower over an busy week of economic data and earnings reports. The tech-heavy Nasdaq Composite(COMP) reached intra-week record high on Wednesday before falling back sharply on Thursday. Roughly 42% of the S&P 500(SPX) companies reported Q3 earnings over the week, including  five of the so-called Magnificent Seven stocks. Refer to below major indexes performance table for the week.

All major indexes in my watchlist recorded negative return for the month of October. Refer to below monthly performance table.

Key highlights for the week and next:

1.    There were 169 SPX firms reported earnings, overall results helped lift Q3 EPS of SPX estimate to 5.1% from the previous 3.6%. Of the 70% of S&P 500 companies reporting to date, 75% have beaten analysts' EPS estimates, and 60% exceeded revenue expectations. Including five of the so-called Magnificent Seven mega-cap technology-oriented stocks: Meta and Microsoft, Google parent Alphabet, Apple, and Amazon.com. Overall earnings have been decent, with Amazon (AMZN) and Alphabet (GOOGL) results impressed the markets. 

2.    U.S. nonfarm jobs report released on Friday for the month of October showed the total new jobs came in well below expectation, with 12k jobs added versus forecasts of 100k. The average monthly jobs added this year are now about 170k, below last year’s average of 250k but still above the long-term average of 148k. The jobs added however were mainly negatively impacted by Boeing strike and Hurricanes. 

3.    U.S election and Fed meeting coming week. The U.S presidential election is on Tuesday Nov 5. The Fed meeting is also on deck for Wednesday and Thursday Nov 6 and 7. It’s expected there would be another 0.25% rate cut on track.  In fact, markets are now pricing in higher probabilities of rate cuts at both the November and December Fed meetings. 

4.   November and December in election years have tended to be positive months for markets. Historically election-related market volatility has often been buying opportunity. 

5.    October's ISM Manufacturing PMI was weak at 46.5%, its lowest level in 15 months. It was the seventh straight month of contraction for the index. Manufacturing contributes about 11% to U.S GDP while private consumption contributes about 68%. 

6.    Treasury yield hit 4-month high. The weak manufacturing and payroll reports failed to prevent the yield on the benchmark 10-year U.S. Treasury note from moving to another four-month intraday high (4.37%) on Friday, perhaps in response to expectations for an eventual renewal inflation and growth pressures. 

SPX sectors in play

Two out of the 11 SPX sectors posted weekly gain. Communication Services(XLC) and Financials(XLF) sectors closed positive, while Real Estate(XLRE) lagged. Refer to below SPX sectors ETF weekly performance table.

SPX sectors forecast earnings 2025:

Indexes technical levels

Dow and SPX closed 2^nd weekly decline, while the tech-heavy Nasdaq(COMP) index closed with 1^st weekly loss. 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 a pickup in economic activity. The Shanghai Composite Index(SSE) fell 0.84%, while the blue chip CSI 300 gave up 1.68%. In Hong Kong, the benchmark Hang Seng Index lost 0.41%. (Refer to the above weekly performance table).

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

1.    China’s factory activity expanded for the first time since April amid better demand. The official manufacturing purchasing managers’ index (PMI) rose to an above-consensus 50.1 in October from 49.8 in September. The nonmanufacturing PMI, which measures construction and services activity, increased to a lower-than-expected 50.2 in October from 50 in September. The rise in services activity was partly attributed to increased spending during the country’s Golden Week holiday. Separately, the private Caixin/S&P Global survey of manufacturing activity rose to 50.3 in October from the prior month’s 49.3 amid new order growth. 

2.    In the property sector, the value of new home sales by the country’s top 100 developers rose 7.1% from a year ago after September’s 37.7% drop, marking the first year-on-year growth in 2024, according to the China Real Estate Information Corp. 

3.    Taken together, the first batch of major economic indicators after the rollout of Beijing’s broad stimulus package indicated early signs of recovery in the Chinese economy. Analysts believe stock valuations will be driven by fundamentals, and focus will switch to earnings growth if economy continue to improve. 

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

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) settled the week at 3555.43 close, fell 1.06% for the week. The index recorded its 2^nd consecutive weekly loss and its lowest close in seven weeks. HKland was the top performer with 14% weekly gain. 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.