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.