Market Retraced Part of “Election Rally”, Focus Returns to Inflation and Fed

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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 15, major indexes gave back some of the robust post-election gains. The S&P 500(SPX) was down about 2% for the week, although gains for the full year still exceed 23%, and the index is up over 1% since U.S. election day, as uncertainty over the incoming administration’s policies appeared to continue driving the so-called Trump Trade. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    Inflation. Consumer price index (CPI) inflation data for the month of October was in line with expectations, with headline prices rising 0.2% to 2.6% YoY in October and core (less food and energy) prices rising 0.3% to 3.3%. 

2.    Fed rates cut. Fed Chair Powell indicates that there is "no rush" to cut rates, as the economy is resilient. This sparked some concern in markets that the Fed may not be cutting rates as much as previously thought. The CME FedWatch Tool, expectations priced into futures markets for a quarter-point cut in December fell moderately over the week, from 64.6% to 58.4%. Expectations for a full percentage point of cuts by the end of next year fell more considerably, from 41.3% to 32.6%. 

3.    Bitcoin rally. At its peak Wednesday, the price of Bitcoin had surged by nearly a third (32.46%) since the eve of the election, as investors anticipated looser regulation of digital currencies. 

4.    EV shares pull back on report of planned end of tax credits. Reports surfaced Tesla CEO Elon Musk would co-head a planned new Department of Government Efficiency(DOGE), Tesla shares had gained 42.63% at its peak since the day before election. Tesla(TSLA) shares and other EV makers fell back late in the week, however, as Trump plans to eliminate the $7,500 consumer tax credit for EV purchasers. Rivian (RIVN), a producer of other higher-cost EVs, was particularly hard hit, falling 14.3% in the wake of the news.

 

SPX sectors in play

Three out of the 11 SPX sectors recorded weekly gain. Financials(XLF) and Energy(XLE) were the top gainers. Health care(XLV) and Tech(XLK) lagged. Health care shares fell sharply on Friday, the iShares Biotechnology ETF(IBB) declined 4.79%—following news Thursday evening that Robert F. Kennedy, Jr., would be President-elect Donald Trump’s nominee to head the Health and Human Services Department (HHS). Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes Dow, SPX and Nasdaq Composite retreated from their previous week’s record highs, overall uptrend still strong. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks declined as evidence of persistent deflation and worries about potential U.S. tariffs under incoming U.S. President Trump hurt investor confidence. The Shanghai Composite Index(SSE) fell 3.52%, while the blue chip CSI 300 gave up 3.29%. In Hong Kong, the benchmark Hang Seng Index plunged 6.28%. (Refer to the above weekly performance table).

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

1.    China’s consumer price index rose a below-consensus 0.3% in October from a year earlier, down from 0.4% in September. Core inflation increased 0.2%, from September’s 0.1% rise. The producer price index fell 2.9% year on year, more than the 2.5% decrease predicted by analysts and accelerating from September’s 2.8% drop, extending the deflation in factory gate prices that began in late 2022. 

2.    Other data painted a mixed picture of the economy. Retail sales expanded a better-than-expected 4.8% from a year ago, up from September’s 3.2% rise and marked the strongest growth since February. Industrial production rose 5.3% from a year earlier, lagging forecasts and September’s 5.4% increase, amid weaker auto sales. Fixed asset investment remained steady at 3.4% in the January to October period, while property investment in the period fell 10.3%. China’s urban unemployment rate eased to 5%, from 5.1% in September. 

3.   Property sector slump eases. New home prices in 70 cities fell 0.5% in October from September, when home prices dropped 0.7% from August. October’s decline marked the second month of slowing home price declines and the slowest pace since March, according to Bloomberg. The improvement came after Beijing unleashed in recent months a series of stimulus measures aimed at boosting the housing sector, including reducing mortgage rates, relaxing homebuying curbs in big cities, and cutting taxes on home purchases. 

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

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) closed at new record high 3744.70 this week, led by banks and the Jardine group’s stocks gains. JMH was the top performer with 3.11% gain, while Seatrium , venture and YZJ Ship were among the top losers. 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.