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.