Skip to main content

Weekly Market Outlook: Could see Bounces but Pessimism Dominates Market Trading

Week Ahead, 9 Sept, 2024

Broadcom Inc's earnings fell short of the expectations of the AI investing community. Not only did the stock decline by 10.36%, but tech-related stocks and the NASDAQ 100 also experienced significant losses, with the latter dropping by 2.69%. The selling pressure was exacerbated by the August US non-farm jobs report, which came in at 142,000, below Wall Street's forecast of 160,000.

Additionally, we observed a normalisation of the yield curve after a prolonged period of inversion. Investors are somewhat concerned about this development, as it has often signalled an impending US recession. However, we remain open-minded, noting that the yield curve inversion in 2022 did not lead to a recession.

Given this week's performance, S&P 500 is now consolidating in a lower highs trend, non-bullish observation, but stayed above key support levels. Thus, we have adjusted our stance on the US equities market from bullish to neutral. 

China stocks also faced challenges, with the China A50 falling below our critical 61.80% retracement level, reducing the likelihood of a rally or recovery at this point. Major investment houses, UBS Wealth Management and JP Morgan, too have downgraded their ratings on the China market from bullish to neutral. However, we are not entirely dismissing the Chinese market and continue to monitor developments, as policy changes or data shifts could lead to a reversal of analyst sentiment and technical trends.

Alibaba Inc (HK) is poised to begin its stock connect trading as early as Monday, potentially attracting significant inflows from a potential pool of 220 million Chinese Mainland investors.

Other notable news includes Dell Technologies and Palantir joining the S&P 500 Index and Singapore's plans to begin construction of Terminal 5 in early 2025, aiming for operational status around 2035. This development is expected to boost the tourism and travel sector.

While we may see some short-term rebounds, we remain cautious about the equities markets for the coming week until we observe significant changes in the technical observations.

Headlines for the week:
- Corp Earnings
- US Aug CPI, PPI
- China Aug CPI, Trade

Disclaimers apply


Most Popular

Historical Stock Market Performance During the Year of the Snake (2025)

Historical Stock Market Performance During the Year of the Snake (2025) Introduction: The Chinese zodiac plays a fascinating role in shaping cultural beliefs and behaviors. Among the 12 zodiac animals, the Year of the Snake is often associated with intelligence, caution, and financial shrewdness. We take a simply review of three key indices, S&P 500, Hang Seng Index (HSI), and Straits Times Index (STI),  annual performance  during the Year of the Snake. Key Observations from the Data: S&P 500 Performance: Average annual return: 0.47% . Win/Loss ratio: 37.5% (3 years of gains vs. 5 years of losses). Notable years: 1989 marked a robust gain of 27.25% , while 1941 saw a steep decline of -20.22% , coinciding with global tensions during World War II. HSI Performance: Average annual return: -5.36% . Win/Loss ratio: 66.67% (2 years of gains vs. 1 year of losses). Notable years: The index's strongest year was 1989, with a return of 5.55% , while 2001 suffered a severe decli...
Read more

Week Ahead: US Indices Momemtum in Question

    Week Ahead: 10 March 2025 Key event this week was  U.S. indices technically closed below the key 30-week (or 150-day) moving average . For the upward trend to continue, the indices need to reclaim levels above the moving averages. Remaining below the 30-week (or 150-day) moving average could indicate that the upward trend has reversed downward. However, in the short term, we expect a rebound as the indices trade near their respective support levels. Medium Term: S&P 500 (SPX):  The S&P 500 broke below its key upward trendline, which had been established since October 2023. In the longer term, we expect the index to trade sideways or move in a downward direction. In the short term, we anticipate the S&P 500 will find support at the 5,700 level and could rebound to test the 5,860 and then the 5,966 resistance zones. Straits Times Index (STI):  The technical trend remains bullish. We maintain a constructive outlook while staying vigilant for any sig...
Read more

Week Ahead: Trump Trade and the Resilient US Economy

  Week Ahead, 9 Dec 2024 Macro News: U.S. markets continued their record-breaking streak this week following a reassuring speech by U.S. Federal Reserve Chair Jerome Powell, highlighting Fed's cautious yet comfortable stance on rate cuts. Beneficiaries of the "Trump Trade" also saw significant gains, with Tesla Inc. rising by +12.77% and Bitcoin up +2.24% for the week. The U.S. technology sector, represented by the QQQ ETF, also performed strongly, boosted by Friday's jobs report, which indicated a resilient economy. Meanwhile, the Hang Seng Index (2800 ETF) experienced a technical turnaround, gaining +2.28% this week. The rally was fuelled by speculation that Beijing might introduce additional lending and mortgage rate cuts to stimulate the economy. Medium Term: • S&P 500 (SPX): Index remains above the 6,000 level and could trend towards the 6,180 zone. • Straits Times Index (STI): STI reversed near our 3,860 resistance zone. We are neutral and is looking out for...
Read more