Stocks Rally Following U.S Election, Hopeful for Growth and Tax Cut

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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 8, major indexes rose to record highs, as investors wagered that the Republicans’ so-called red sweep win would result in faster earnings growth, looser regulations, and lower corporate taxes. The small-cap Russell 2000 Index(Russell 2000) led the gains, surging 8.57% for the week. Meanwhile, the S&P 500 Index(SPX)’s 4.66% gain was its best in almost exactly a year. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    President election: The decisive U.S. election outcome cleared a source of uncertainty for the markets, with stocks posting their best ever post-election rally. 

2.    Inflation: The likelihood of tax cuts and deregulation may boost economic growth further, supporting corporate profits and the rally in stocks. But tariffs and debt concerns may push rates up and pressure bonds, acting as an offset. 

3.    Interest Rate: The Fed cut interest rates for the second time this cycle, bringing its policy rate to 4.5%-4.75% and continues to view its policy as restrictive. However, strong growth and possibly looser fiscal policy next year may lead the Fed to move more slowly, with markets starting to price in a shallower rate-cutting cycle. 

4.    Data events in focus coming week: CPI on Wednesday Nov 13, PPI on Thursday Nov 14, Retail Sales Nov 15. 

SPX sectors in play

All 11 SPX sectors recorded weekly gain. Consumer Discretionary(XLY) and Energy(XLE) outperformed while the defensive sectors Consumer Staples(XLP) and Utilities(XLU) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes Dow, SPX and Nasdaq Composite closed on record highs. Click below three indexes for their weekly charts.  

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks surged as Beijing’s unveiling of fresh stimulus measures offset concerns about potential U.S. tariff hikes. The Shanghai Composite Index(SSE) gained 5.51%, while the blue chip CSI 300 added 5.5%. In Hong Kong, the benchmark Hang Seng Index was up 1.08%. (Refer to the above weekly performance table).

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

1.    China’s announced on Friday a RMB 10 trillion program to refinance local government debt, which Beijing has flagged as a key economic and financial risk for the country. Policymakers also raised the local government debt ceiling to RMB 35.52 trillion from RMB 29.52 trillion, marking the first time they raised the ceiling midyear since 2015. Finance Minister Lan Fo’an also pledged to take a “more forceful” fiscal policy in 2025 to support growth but did not provide details. 

2.    On the trade front, exports rose an above-forecast 12.7% in October from a year earlier, up sharply from 2.4% in September, marking the fastest rate of growth since July 2022. The rise was largely driven by better weather and steep discounts. Imports fell 2.3%, down from the prior month's 0.3% growth. The overall trade surplus increased to USD 95.72 billion from USD 81.71 billion in September. While the growth in October’s exports signaled strong demand for Chinese goods—which has been a bright spot for the economy—analysts cautioned that China’s export outlook has grown more uncertain given the possibility of a trade war when Trump takes office in 2025. 

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

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) closed hit all-time record high at 3724.37 level this week, led by banks gains. The trio local banks UOB, DBS and OCBC added 11.18%, 9.42% and 5.8% respectively this week. On the other hand, the STI index S-REITs mostly closed lower. 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.