The US earnings season kicked off last week, with big banks posting positive surprises amid higher interest rates and increased market activity.

Against the backdrop of improved economic and employment data released recently, market participants expected this upward economic cycle to continue. The three major US indices edged to record highs on Friday night, fuelled by optimism over earnings. 

Technically, the S&P 500 has broken through an important resistance of 2,483 points (161.8% Fibonacci extension line), followed by mid-term resistance at 2,600 points (200% Fibonacci extension line). The trend indicators of the 10-day moving average and super trend lines (10,3) are extended upward, indicating the short-term upward trend has not changed.

Dow-component companies due to announce earnings this week include UnitedHealth Group, Johnson & Johnson, Goldman Sachs, IBM, American Express, Verizon, GE and Procter and Gamble. 

Asian markets climbed to their highest level in nearly ten years, led by the Nikkei, Hang Seng and Nifty indices. Positive sentiment from the US market paved the way for a higher opening in Asian futures this morning. 

Singapore’s economy accelerated in the third quarter, registering an annualised rate of growth of 4.6% year on year – the highest reading in three years. This GDP reading beat market expectations and fuelled a strong rally in local stocks on Friday. The manufacturing and service sectors have posted strong growth momentum in the past three months, suggesting that global economic tailwinds are helping Singapore’s economy to gain momentum. 

The Straits Times Index broke out above the 3,300 point, a psychological and technical resistance level after two months of consolidation. Breaking out above this critical point will pave the way for more upside toward the previous highs of 3,354 points.

Technical Analysis:

Hong Kong 50 - Cash

  • 10-Day Simple Moving Average and SuperTrend both sloped upwards
  • Attempts are being made to break out of the immediate resistance level at 28,525, with the next resistance level at 29,100 (161.8% Fibonacci extension)
  • Momentum indicator MACD is trending upwards, suggesting bullish momentum dominates

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person