Stocks Hit New Record as Fed Cuts Rates

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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 Sep 19, major U.S. stock indexes rose to record highs, as the Federal Reserve lowered short-term interest rates for the first time in nine months. Small-cap stocks dominant Russell 2000 Index(RUT) gaining 2.16%. The Nasdaq Composite(COMP) advanced 2.21% for the week, while the S&P 500 Index(SPX) and Dow Jones Industrial Average(DJI) added 1.22% and 1.05%, respectively. Refer to below major indexes weekly performance.

Key highlights for the week and next:

1.    Trade developments were in the headlines following a Friday morning call between U.S. President Donald Trump and Chinese President Xi Jinping. In a social media post following the call, Trump announced that they had reached an agreement regarding U.S. ownership of the short-form video platform TikTok and had made progress on several other issues, including further trade negotiations between the countries. 

2.    Fed announced a 25-basis point(0.25% point) cut following FOMC meeting, as expected. The Fed’s Summary of Economic Projections indicated that most policymakers expect to lower the central bank’s policy rate by an additional 50 basis points by the end of the year, representing more easing than their last projections made in June. Expectations for rate cuts in 2026 and 2027 also increased. 

3.    August retail sales increased by 0.6% MoM in August, beat forecast of 0.2%. Housing market-related data surprised to the downside. Housing starts declined by 8.5% in August from the prior month, hitting a seasonally adjusted annual rate of 1.31 million versus estimates for around 1.37 million. 

SPX sectors in play

Six out of the 11 SPX sectors recorded weekly gains. Growth stock outperformed, Tech(XLK), Communication Services(XLC) and Consumer Discretionary(XLY) were among the top gainers, while Consumer Staples (XLP) and Materials(XLB) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes hit new record highs this week.  Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets declined as investors pocketed gains after a recent rally and a trio of indicators pointed to an economic slowdown. The Shanghai Composite Index(SSE) lost 1.3% and the blue-chip CSI 300 fell 0.44%. In Hong Kong, the benchmark Hang Seng Index added 0.59%. (refer to the above weekly performance table).  

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

1.    August retail sales rose 3.4% and industrial output gained 5.2% year on year, China’s statistics bureau reported, marking the worst monthly performance for both gauges this year. Fixed asset investment growth slowed to 0.5% in the year’s first eight months, the lowest reading for the period on record except for 2020, a pandemic year, according to Bloomberg. 

2.    All three readings trailed expectations and pointed to a broad slowdown in China’s economy after it grew a surprisingly strong 5.3% in the year’s first half. The weak data supported the view that Beijing will likely roll out additional stimulus measures to hit its official 5% growth target as deflation continues to stalk the economy. 

3.    New and existing home prices fell in August month on month in 70 cities, according to the statistics bureau, while new home sales in Beijing plunged 19% in August from a year ago, according to the China Real Estate Information Corp. The latest data raised speculation that officials may implement targeted stimulus measures to help bolster the housing market, which has persisted for more than four years with little evidence of a potential turnaround.

Refer to below Hang Seng Index stocks’ weekly performance table.

Click below for SSE and .HSI weekly chart.

SSE weekly chart

.HSI weekly chart

 

Singapore

The Straits Times Index (STI) fell 0.96% to close at 4,302.71, snapping a four-week winning streak. The three local banks were among the top decliners, with DBS leading the losses, likely due to profit-taking and expectations of an upcoming Fed rate cut.

Refer to below STI index stocks’ weekly performance.

Click below for STI weekly chart.

STI weekly chart

Source: Some contents and data excerpted from various public market reports. Please comment to claim copyright ownership of any material, and I will remove it if necessary.