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 WeeklyWrap Have Been Moved Back to https://sgtraderclub.blogspot.com/ 

Rising Rates Weight on Stocks

 Summary of content for the week of  Feb 19:

1. Week 7 major indexes performance;

2. Week 7 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

U.S

U.S three major indexes finished the holiday-shortened week mixed and very near the flatline, with DJI index the only one closed positive. SPX and Nasdaq(COMP) hit fresh record highs but closed down by profit-taking, attributed to the upward move in interest rates. 

The 10-year Treasury yield of 1.34% on Friday close rebounded back to its level one year ago when pandemic outbreak. Despite the sharp rise recently, the rates remain historically low. Take a look at below 10-yr Treasury Rate(%)

Source: Bloomberg

Analysts opined the recent rise in interest rates that has been driven by higher expected inflation, and by potentially less Fed stimulus. Given that the rates remain historically low and ongoing negations over the coming fiscal-aid package, Fed's dovish stance to keep short term rates accommodative to economy recovery, the rising rates unlikely derail the favorable fundamental outlook. 

An increase in longer -term interest rates are unfavourable on fast-growing technology stocks, by raising the discount rate on future earnings. Technolgy(XLK) among the laggers in the SPX 11 sectors indexes as shown in below weekly sector indexes performance table. Conversely, the increase in rates favored bank shares by boosting lending margins and helped value shares outperformed growth stocks. Financials(XLF) are among top performing sector indexes for the week. Energy(XLE) was the best performing index as bad weather forced to shutdown the massive oil and gas infrastructure, reducing the oil supplies. 

China/HK

China SSE index rose 1.1% in just two-trading days, after reopened from 7-day long Chinese New Year holiday.  The HSI index in Hong Kong was the best performing index for the week, with 1.6% gain. Both SSE and HSI are in a bullish trend and expected to rebound further.

Singapore

STI index reversed down from its two-week up streak, closed at 2880 level where it had a bullish breakout seven-week ago, now becomes resistance-turn-support level technically. Expected the index will have limit downside with major support level at 2880-2800 going forward. Top pick DBS bank.

Stocks Hit New Highs Bulls are In Charge, Happy Lunar New Year

 Summary of content for the week of  Feb 12:

1. Week 6 major indexes performance;

2. Week 6 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

Wish all Readers Happy Chinese New Year, good health and fortune in the year of Ox!

U.S

U.S three major indexes notched a 2nd week of gains and reached record highs heading into the Presidents' Day long holiday weekend, helped by strong earnings growth, picked up distribution of vaccine and the increasing likelihood of additional fiscal stimulus. 

Among the 11 major SPX sectors(refer to below sector indexes weekly performance table), the cyclicals Energy(XLE),Technology(XLK), Communication Services(XLC) and Financials(XLF) are among top performing sectors and defensives such as Utilities(XLU) and Consumer Discretionary(XLY) are lagging. 

China/HK

Chinese markets rallied ahead of the Lunar New year holiday. The SSE index gained 4.54%, was the top performing index in my major indexes weekly performance table below. SSE index hit multi-year new high since Dec 2015.HSI index was the 2nd best performing index for the week, also closed new high since Apr 2019. 

As laggers last year, the Asia major indexes SSE, .HSI and STI expected to catch up this year along with positive economic outlook. 

Singapore

STI edged up for 2nd week of gains. Singapore as a small country still facing lots of uncertainties on its road of recovery from Covid-19 pandemic, its benchmark index STI is picking up slow and steadily. Expected plenty of room to upside with immediate technical target is at 3100 level. 

Bulls Regain Control, Hit Record Highs

 Summary of content for the week of  Feb 5:

1. Week 5 major indexes performance;

2. Week 5 US sector indexes performance;

3.Major indexes weekly charts of support and resistance levels;

U.S

U.S stocks finished solid higher, recovered all of last week's declines helped by fiscal stimulus plans and vaccine optimism. SPX, Nasdaq indexes all reached record highs. Energy stocks outperformed as crude oil prices hit their highest level in over a year on a surprising decline in U.S reserves. 

Nasdaq(COMP) added 6.01% for the week, was the top performer. Among 11 SPX sectors, Materials(XLB) outperformed and Healthcare(XLV) and Consumer Discretionary(XLY) stocks lagged. 

Short Squeeze Unwinds. The social media Reddit coordinated "short-squeeze" targeting hedge funds short-sellers with positions in GameStop and a few other companies also abated(#GME price dropped more than 80% this week), buyers turned their attention instead to the silver market, sending silver prices to their highest level since 2013. 

China/HK

Shanghai SSE index rose for the week. Sentiment improved following reports that Alibaba group reached an agreement with regulators over the restructuring of its fintech affiliate Ant group, whose record USD 34.4 billion IPO was canceled in November. 

Kuanshou IPO. In HK, a record oversubscription by retail investors for the USD 5.4 billion IPO of Kuaishou Technology(1024.HK) revealed huge investor appetite for Chinese tech companies. Shares of the short video-sharing app surged 161% in its HK public trading debut on Friday, making it the largest IPO since Uber went public in 2019, according to Bloomberg. 

Singapore

STI index rebounded this week after a two-week down, current index level supported by its 50dma at around 2890. Upside immediate resistance at recent high 3017 level.