U.S. Stocks End New Highs as Inflation Lower than Expected

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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 Oct 24, major U.S. stock indexes advanced, shaking off volatile headlines related to U.S.-China trade relations and a pop in oil prices after the U.S. announced sanctions against Russia’s two largest oil companies. Major indexes the S&P 500(SPX), Nasdaq Composite Index(COMP) and Dow Jones Industrial Averages(DJI) all ended the week at new record highs. Refer to below major indexes weekly performance.

Key highlights for the week and next:

1.    How long will this bull market last? Since the October 2022 low, the S&P 500 has gained 90%, or 98% including dividends. Looking back over the past 80 years, the 12 prior bull markets (excluding the current one) have averaged a gain of about 200% and lasted five years. So, this bull market is neither a toddler nor a senior citizen — it’s somewhere in the middle. 

2.    Fed rate cut. Delayed September CPI report due to government shutdown, was finally released on Friday( Oct 24) before market open, the inflation reading came in softer than expected, with headline CPI rising 0.3% from prior month beat expectation of 0.4%. The core index rose 0.2% vs. an expected 0.3%, the slowest pace in three months. Cooler inflation clears the path for an October Fed rate cut, with more likely to follow. 

3.    Q3 Earnings reports. U.S. corporate profits continue to grow at a healthy pace, despite trade disruptions and a cooling labor market. Over the next two weeks, nearly 60% of S&P 500 companies will report results, including the bulk of the Magnificent 7 (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla). This group is expected to post 15% year-over-year earnings growth, compared with 6.7% for the remaining 493 companies and 8.5% for the index overall. 

SPX sectors in play

Nine out of 11 SPX sectors recorded weekly gains. Information technology(XLK) and energy(XLE) led the way; utilities(XLU) and consumer staples(XLP) lost ground. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes had bullish breakout from previous weekly inside-candlestick, just as per our bullish prediction. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets rose amid strength in technology-focused shares despite economic data highlighting weak domestic demand. The Shanghai Composite Index(SSE) rose 2.88% and the blue-chip CSI 300 added 3.24%. In Hong Kong, the benchmark Hang Seng Index rebounded 3.62%.

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

China’s economy grew 4.8% in the third quarter from a year ago, putting it on a “solid foundation” for meeting the official growth goal of around 5% this year, the country’s statistics bureau said Monday. Other data, however, highlighted several pockets of weakness in China’s economy. Retail sales grew 3.0% year over year (YoY) in September, the slowest pace since November, while fixed asset investment unexpectedly fell 0.5% YoY in the first nine months of the year. Industrial output rose a better-than-expected 6.5% YoY in September, driven by the booming export sector.

Encouraging people to spend more and save less appears to be a matter of growing urgency for Beijing amid a rise in global trade protectionism. But a yearslong housing market slump and persistent deflation have sapped consumer demand.

On the policy front, China said it aims to “greatly increase” the country’s capacity for self-reliance and strength in science and technology in the next five years. It also vowed to maintain manufacturing’s share of the economy at a “reasonable” level as it builds a modern industrial system, Bloomberg reported, citing state media. The statements were contained in a communique released last Thursday at the end of China’s fourth plenum, a four-day conclave of top Communist Party officials to review and approve the main themes of the 15th Five-Year Plan, a blueprint for China’s economic and social development goals from 2026 to 2030.

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) added 2.15% to close at 4422.21 this week. Weekly uptrend is well intact.

The DBS Singapore 2024 report released on Oct 22, it said Singapore’s economy could more than double by 2040, with Singapore dollar potentially trading 1-for-1 against the US dollar and the STI index climbing t0 10,000 points over the 15-year period.

Looking ahead, DBS said that passive inflows are likely to continue favouring large-cap counters listed on the Singapore Exchange, as overseas investors seek stable markets and safe-haven exposure.

Interest in small and mid-cap stocks is also expected to grow with support from the Government’s Equity Market Development Programme. Stocks in the income and staples categories across all market capitalisations could benefit as well, as lower interest rates encourage investors to shift money out of deposits and money-market instruments and back into equities. 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.

U.S. Stocks End Higher as Fed Signal Further Rate Cuts

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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 Oct 17, major U.S. stock indexes advanced, rebounding from a sharp sell-off on the prior Friday that saw the S&P 500(SPX) Index register its worst day since April. It was a volatile week for equity markets that started on a positive note after representatives from the U.S. and China appeared to walk back some of the prior week’s escalation of trade tensions. Some dovish comments from Federal Reserve officials and several deal announcements in the artificial intelligence (AI) space also appeared to support stock indexes early in the week. Refer to below major indexes weekly performance.

Key highlights for the week and next:

1.    After a six-month steady move higher, the S&P 500 rally faces challenges, including ongoing trade tensions between the U.S. and China, the ongoing U.S. government shutdown, and emerging concerns about small regional banks' credit quality. Market indicators, such as the rising VIX volatility index, and a shift toward safe-haven assets, like U.S. Treasuries, suggest some signs of investor fatigue. 

2.    Perhaps a primary source of uncertainty in recent weeks has been the ongoing tariff tit-for-tat between the U.S. and China. Trump has recently noted that the elevated tariff proposals on China were likely not sustainable, and he has also confirmed a meeting with Chinese President Xi later this month in South Korea. These recent developments have helped ease market concerns that the worst-case scenario around tariffs on China may not occur. 

3.    Latest consumer price index (CPI) inflation will be released on October 24, despite the U.S. government shutdown, which is expected to show that headline inflation inched higher to 3.1% annually, versus last month's 2.9% reading. 

4.    VIX volatility index, often referred to as the Wall Street fear gauge, has climbed above 20, after spending much of the last few months in the mid-teens. 

5.    Earnings season also began in earnest on Tuesday, with several big banks reporting third-quarter results. JPMorgan Chase, Citigroup, and Wells Fargo all reported better-than-expected results for the quarter. In total, about 12% of S&P 500 companies had reported as of Friday morning. Of those, 86% announced earnings that beat consensus estimates, according to data from FactSet, which seemed to help buoy investor sentiment during the week. 

6.    Fed Powell signals more rate cuts amid weakening labor market. FedWatch tool shows a 99% chance for 25 basis points(0.25%) rate cut in upcoming Oct 29 FOMC meeting. And 94% chance for another 25 basis points rate cut in Dec meeting. 

SPX sectors in play

All 11 SPX sectors recorded weekly gains. Consumer Discretionary(XLY) and Tech(XLK) led the gains, while Health care(XLV) and Financials (XLF) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes formed an inside weekly candlesticks, indicate indecisive on market direction. For SPX, a breakout beyond the recent big black candle’s range (6765-6550) would provide clearer direction, with upside bias. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets fell as trade tensions with the U.S. intensified. The Shanghai Composite Index(SSE) slid 1.47% and the blue-chip CSI 300 fell 2.22%. In Hong Kong, the benchmark Hang Seng Index fell 3.97%.

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

China reported that factory gate prices fell 2.3% in September year on year, the 36th straight month of declines, though the pace of decline slowed from August’s 2.9% drop. Consumer prices declined 0.3%, steeper than economists’ median forecast. On the bright side, the core consumer price index, which excludes food and energy, rose to a 19-month high of 1.0%. The latest inflation data showed that deflationary pressure continues to stalk China’s economy, which is struggling with falling prices since the pandemic ended and a prolonged housing market slump that has further weakened consumer demand.

Analysts are eyeing China’s fourth plenum, a high-level political meeting of Communist Party officials scheduled for October 20 to 23. During the meeting, officials are expected to deliberate and approve a proposal from top leaders on China’s next five-year plan laying out the country’s economic and social development goals. Analysts will be watching for any comments regarding domestic consumption, which officials have previously signaled would be a priority as they try to rebalance China’s economy in the face of higher U.S. tariffs.

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) declined 2.22% to close at 4328.93 this week. Immediate technical support level to watch for coming week is around 4300-its 50dma level. 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.

Stocks Fall on U.S.-China Trade Tensions (Apr-3 Again)

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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 Oct 10, major U.S. stock indexes declined for the week amid fears of reescalating global trade tensions and rising concerns around the impacts of a prolonged U.S. government shutdown. The Nasdaq Composite and S&P 500 Index spent much of the week in positive territory, buoyed by ongoing enthusiasm for companies with artificial intelligence exposure that was supported by several new deal announcements, including a strategic partnership between Advanced Micro Devices and OpenAI that sent shares of the former up more than 20% on Monday.

However, equities turned sharply lower on Friday morning after President Donald Trump posted on social media that he is considering “a massive increase of tariffs on Chinese products” in response to China’s proposed new export controls on rare earths. Gold prices continued their record-breaking rally, surpassing USD 4,000 per ounce for the first time, underscoring the heightened level of geopolitical and economic uncertainty. Refer to below major indexes weekly performance.

Key highlights for the week and next:

1.    U.S. federal government shutdown has rolled into 2^nd week. At 10 days and counting, this is now the fourth-longest shutdown on record, and there are few signs of an imminent breakthrough in Congress. The impacts on the U.S. economy are starting to build. Typically, the effects of government shutdowns on the economy are small and temporary, as activity bounces back upon reopening. Should the shutdown persist into a third week, we might start to see more signs of these disruptions. 

2.    Fed minutes signal cautious support for further rate cuts. With a lack of major economic data releases amid the continuation of the U.S. government shutdown, investors turned their attention to Wednesday’s release of the minutes from the Federal Reserve’s mid-September policy meeting. The minutes showed some divergent opinions among policymakers as they weighed conflicting economic signals. 

3.    Consumer sentiment holds steady in October. The University of Michigan reported that its preliminary October Index of Consumer Sentiment reading came in at 55, relatively unchanged from the prior month. 

4.    Q3 earnings season will be unofficially kicks off with JPMorgan Chase(JPM)’s upcoming report on October 14. Analysts polled by FactSet expect the broad-based S&P 500 Index to log a ninth consecutive quarter of year-over-year earnings growth.

SPX sectors in play

Only two out of the 11 SPX sectors recorded weekly gains. Energy(XLE) and Consumer Discretionary(XLY) were at the bottom of the performance. 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 ended a holiday-shortened week on a mixed note. The Shanghai Composite Index(SSE) edged up 0.37% and the blue-chip CSI 300 fell 0.51% over a two-day trading week ended Friday. China’s stock markets reopened for trading on Thursday, October 9, after being closed for an eight-day break starting October 1.  In Hong Kong, the benchmark Hang Seng Index fell 3.13%.

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

Preliminary data suggested that consumption during China’s so-called Golden Week lagged the activity during the five-day Labor Day holiday in May. Sales at select retailers and restaurants rose 3.3% in the first half of Golden Week, nearly half the pace recorded over the Labor Day break, Bloomberg reported, citing government data. Average passenger traffic for all travelers increased 6.2% over last year’s holiday, according to an estimate from China’s Ministry of Transport, lower than the 8% increase over the Labor Day holiday. The underwhelming consumption data for Golden Week, typically a peak consumption period in China, came as Beijing is trying to rebalance the economy to favor domestic spending and services and pivot away from industry and exports.

Analysts are eyeing China’s fourth plenum, a high-level political meeting of Communist Party officials scheduled for October 20 to 23. During the meeting, officials are expected to deliberate and approve a proposal from top leaders on China’s next five-year plan laying out the country’s economic and social development goals. Analysts pay close attention to any public statements following the meeting for clues about any changes in China’s economic strategy.

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) edged up 0.34% to close at 4427.06 this week, hit new record high of 4474.12 on Tuesday built bullish momentum from previous week, profit-taking seen starting Wednesday to Friday, eventually gave back all its Tuesday’s rally.

Technically, STI index formed a weekly shooting star candlestick which is bearish signal especially after recent extent run-up, bulls may take a breather in comings week(s) though uptrend is still strong by now. 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.

U.S. Government Shutdown: Limited Impact on Stocks

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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 Oct 3, major U.S. stock indexes solid gains, shrugging off the U.S. government shutdown that began on Thursday. In a “bad news is good news” environment, equities appeared to draw support from the September private payrolls report from payroll processing firm Automatic Data Processing (ADP) showing jobs lost. The labor market data seemingly made it more likely that the Federal Reserve will cut rates at its October meeting. The technology-heavy Nasdaq Composite Index(COMP) outperformed with 1.32% weekly gain, and growth stocks outpaced value. Both DJI and SPX indexes added more than 1% as well. Refer to below major indexes weekly performance.

Refer to below table for major index monthly performance for Oct.

Key highlights for the week and next:

1.    Government shutdown begins. At the stroke of midnight on Sept. 30, the U.S. government officially shut down after lawmakers failed to reach a funding agreement. The immediate impact: a halt to nonessential government operations, widespread furloughs and a pause in key public services. For investors, perhaps the most consequential disruption is the suspension of critical economic data releases, such as inflation and employment reports, that markets and the Federal Reserve rely on to guide decisions. 

2.    Crude oil price(WTI) dropped over 7% after the OPEC+ group of major oil producing nations signaled that it will boost production in November, holding back value stocks. 

3.    Gold gaining more than 3% to extend its strong year-to-date run. Copper, which is sometimes considered a barometer for the manufacturing sector because of its industrial uses, jumped over 7%. 

4.    Investors focus on ADP labor market report in absence of government data. The September ADP data, which showed the economy losing 32k jobs. Consensus expectations had been for ADP to report 51k jobs added, so the weakness seemed to increase market conviction in fed rate cuts to come. 

SPX sectors in play

Seven out of the 11 SPX sectors recorded weekly gains. Healthcare(XLV) and Tech(XLK) outperformed, while Energy(XLE), Consumer Discretionary(XLY) and Communication Services(XLC) 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 rose in a holiday-shortened week. The Shanghai Composite Index(SSE) added 1.43% and the blue-chip CSI 300 advanced 1.99%. China’s stock markets are closed from Oct 1 to Oct 8 for the National Day holiday and Mid-Auttumn Festival and will resume trading Thursday, Oct 9. In Hong Kong, the benchmark Hang Seng Index rose 3.88%, it closed Wednesday for National Day. (refer to the above weekly performance table).  

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

The eight-day break—also known as the Golden Week holiday—marks a period of high consumption in China as millions of people travel, shop, and eat out. The surge of spending is expected to boost domestic consumer stocks from liquor companies to domestic airlines. Analysts scrutinize sales data from Golden Week to gauge the health of Chinese consumers, who are key to Beijing’s effort to rebalance the economy toward consumption and service industries.

China’s official manufacturing Purchasing Managers’ Index (PMI) improved to 49.8 in September from 49.4 in August. The official nonmanufacturing PMI, a gauge of construction and services activity, fell more than expected to 50 from August’s 50.3 reading. Though the manufacturing PMI reading beat economists’ median forecast, it marked the sixth straight month of declines in factory activity. Both PMIs indicated that weakness in China’s economy persisted into the third quarter, following strong growth in the first half of the year.

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) added 3.42% to close at 4411.95 this week, hit new record high after two-week’s retracement. STI closed above 4,400 level for the first time in history, recent high in sept was 4375. Seeing serious buying across banks, property, industrials. STI record all time high was 3,831 in 2007 or nearly 2 decades ago. 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.