U.S Stocks Mixed, Markets Prepare for Another Fed 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 Dec 13, major stock indexes ended the week lower, although the technology-heavy Nasdaq Composite(COMP) advanced modestly and cleared the 20,000 mark for the first time. Large-cap stocks held up better than their smaller-cap peers as the Russell 2000 Index(RUT) recorded a second consecutive week of underperformance against the S&P 500 Index(SPX), thanks in part to gains in shares of Tesla (12.08%) and Google parent Alphabet (8.44%), the latter of which recorded its largest two-day gain since 2015 between Tuesday and Wednesday. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    Inflation data greenlights December Fed cut, signals caution for 2025. November CPI released on Wednesday was the last key datapoint before coming week’s Fed meeting. The results came right in line with expectations. Core consumer inflation rise by 0.3%, leaving the annual rate unchanged at 3.3% for the 3^rd straight month. This pace of price increases is half of the 6.6% peak in 2022, but still higher than the Fed would like. Similarly, producer price inflation accelerated a tick in November, to 0.4% from 0.3%. 

2.    According to the CME FedWatch Tool, futures markets on Friday were pricing in a 97.1% chance of the Fed cutting rates at its upcoming meeting, up from 86.0% at the end of the prior week. The two-day meeting begins December 17, with an announcement on the rate decision made the following day. 

3.    A stronger dollar has been a headwind for int’l stock returns. As other central banks such as the Bank of Canda(BoC) and European Central Bank(ECB) cut rates, the strengthening USD is good for U.S stocks performance and  int’l stocks tend to underperform. 

SPX sectors in play

Two out of the 11 SPX sectors recorded weekly gain. Technology stocks outperformed. Consumer discretionary(XLY) and communication services(XLC) were the only two gainers. While Utilities(XLU) and materials(XLB) stocks lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The major indexes closed with diverged performance. Nasdaq Composite(COMP) recorded 4^th weekly gain in a row, SPX closed 1^st weekly down after three week gains, and Dow closed with 2^nd weekly loss. All three indexes weekly charts are still in uptrend. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks lost ground as recent policy announcements underwhelmed investors. The Shanghai Composite Index(SSE) gave up 0.36%, while the blue chip CSI 300 fell 1.01%. In Hong Kong, the benchmark Hang Seng Index added 0.53%. (Refer to the above weekly performance table).

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

1.    China pledged to implement a more proactive fiscal policy and increase the budget deficit in 2025 at the annual Central Economic Work Conference, a high-level meeting in which top officials plan the economic agenda for the next year. Officials also stated that the central government will continue issuing ultra-long special Treasury bonds to fund major projects. However, the readout following the two-day conference did not provide any details, which dampened investor sentiment. 

2.    Inflation data released earlier in the week showed that China’s economy remained stuck in deflation. The consumer price index rose a below-consensus 0.2% in November from a year earlier, down from 0.3% in October. Core inflation edged up to 0.3%, from October’s 0.2% rise. The producer price index fell 2.5% year on year, easing from the prior month’s 2.9% drop and marking the 26th straight monthly decline despite Beijing’s efforts to boost domestic demand in recent months. 

3.    On the trade front, exports rose a weaker-than-expected 6.7% in November from a year earlier, slowing from 12.7% in October, and expanded for the eighth straight month. Shipments to the U.S. reached their highest level since September 2022, while exports to Southeast Asia also surged, Bloomberg reported. Imports fell 3.9%, deepening from the prior month's 2.3% drop. The overall trade surplus widened to USD 97.4 billion from USD 95.72 billion in October. The rise in exports was partly attributed to Chinese firms frontloading goods to the U.S. to avoid potentially higher tariffs when President-elect Donald Trump takes office in January.

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

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) edged higher 0.37% this week, closed at 3810.35 level. YZJ Ship again was top weekly gainer for 2^nd consecutive week. The three local banks were also among top gainers. 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 Major Indexes Diverge Amid Rally in Tech Stocks

Note: The WeeklWrap weekly commentary was paused last week due to an overseas holiday trip. We’re pleased to announce that it has resumed this week. Thank you for your understanding and continued support!

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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 Dec 6, major stock indexes ended mixed saw the S&P 500(SPX) and Nasdaq(COMP) indexes climbed to new record highs after the jobs raised rate cut hopes. The SPX and Nasdaq (COMP) indexes are up three straight weeks, while the Dow(DJI) index fell after two-weeks up. As we head into year-end and the holiday season, investors have many reasons to cheer. The stock market has been making record highs, and bond markets still offer favorable yields. Perhaps most importantly - and underpinning the solid financial markets - is that the U.S. economy continues to grow at or above trend, with no signs of recession on the horizon. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    Nonfarm payrolls reported on Friday shows the U.S. labor market rebounded in November. New jobs added were 227k, above expectations for 220k, and last month's weaker data was revised somewhat higher. More broadly, the unemployment rate ticked higher to 4.2% but remains well below long-term averages of around a 5.7% unemployment rate in the U.S. The Labor Department also reported the number of job openings in October increased to 7.74 million, up from September’s revised 7.37 million reading. 

2.    The fundamental backdrop for financial markets remains intact, and the U.S. economy appears poised to achieve the elusive "soft landing" (modest slowdown but still growing at or above trend). As we look toward 2025, we would expect consumers to be supported further by lower interest rates and wage growth that exceeds inflation rates. 

3.    The U.S. unemployment rate ticked higher last month, from 4.1% to 4.2%, but remains comfortably below long-term average unemployment rates of around 5.7%. In our view, the labor market continues to normalize after a period of outsized strength after the pandemic in 2020. we anticipate that the unemployment rate remains contained, below 4.5% 

4.    Potential risks ahead: In addition to government policy uncertainty, markets may also face some uncertainty around Federal Reserve rate-cutting policy. If growth remains robust and any risk of inflation re-emerges, the rate-cutting cycle may be shallower than already expected. Nonetheless, we believe that the fed funds rate is heading lower over the next 12 months, even if just incrementally so, which should be supportive to the consumer and corporations. 

5.    Fed meeting remains in focus, upcoming Fed meeting on 17-18 December. The week’s expectations priced into futures markets for a 25-basis-point (0.25 percentage point) rate cut in December. 

SPX sectors in play

Three out of the 11 SPX sectors recorded weekly gain. Consumer discretionary(XLY), communication services(XLC), and information technology(XLK) shares all gained over 3% for the week, while energy(XLE), utilities(XLU), and materials(XLB) stocks—typically more value-oriented segments of the market—all fell over 3%. Geopolitical headlines through the first half of the week were largely dominated by French and South Korean politics, though these seemed to have limited impact on U.S. markets. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

SPX and Nasdaq Composite(COMP) hit record highs while DJI fell after two weeks up. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stocks rose on anticipation of fresh stimulus measures, along with resilient manufacturing data released the prior week. The Shanghai Composite Index(SSE) gained 2.33%, while the blue chip CSI 300 was up 1.44%. In Hong Kong, the benchmark Hang Seng Index added 2.28%. (Refer to the above weekly performance table).

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

1.    Many analysts expect China’s leadership will announce further action to support the economy during the Central Economic Work Conference, an annual meeting in which top officials map out the economic agenda for the next year. Economic growth targets and plans for more stimulus are among the topics that investors will look for at the two-day meeting, which starts December 11. Expectations are high that China will roll out additional measures to ward off the growth risks posed by the incoming Trump administration’s trade policies. 

2.    China’s factory activity expanded for the second straight month. The official manufacturing Purchasing Managers’ Index (PMI) rose to a better-than-expected 50.3 in November from 50.1 in October, according to the statistics bureau, remaining above the 50-mark threshold separating growth from contraction. The nonmanufacturing PMI, which measures construction and services activity, fell to a below-consensus 50 in November from October’s 50.2 reading. Separately, the private Caixin/S&P Global survey of manufacturing activity rose to 51.5 in November from 50.3 in October. The Caixin services PMI eased to 51.5 from 52 in October but remained in expansion. 

3.    The value of new home sales by the country’s top 100 developers fell 6.9% in November from a year ago, reversing October’s 7.1% gain, according to the China Real Estate Information Corp. The persistent slide in new home prices showed China's property sector has yet to show a sustained recovery and supported the view that Beijing will announce further measures to arrest the sector’s yearslong decline.

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

SSE weekly chart

.HSI weekly chart

Singapore

STI index (STI) hit new record high this week, closed at 3796.16 level. YZJ Ship, Sembcorp, DBS were among top gainers of the 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.