Market Summary for Week of May 27, 2022

In the US, this week, the S&P 500 broke a seven-week losing streak, rallying 6.6% after hitting its lowest level since March 2021 last Friday. The Nasdaq (+6.8%) outperformed slightly while the Dow (+6.2%) lagged a bit but was able to snap its longest weekly losing streak since 1932. All eleven sectors finished the week in positive territory with the consumer discretionary (+9.2%) sector leading the way after underperforming earlier this month. The sector narrowed its May loss to 5.6%, largely thanks to a bounce in retail stocks after concerns about inflation and strength of consumer spending sent many of these names to their lowest levels in over a year. Inflation should cool and lead the Federal Reserve to provide greater clarity on their outlook for monetary policy. This should translate into lower interest rate – and broader capital market – volatility. A narrower distribution of outcomes and continued growth in earnings will allow equity markets to stabilize, and in time, begin moving higher. This massive sell off on equity in Q2 could actually create a excellent opportunities for investor to rebalance their portfolio and ensure they are well-prepare for upcoming macroeconomic event, namely, quantitative tapering with hyperinflation and slower economic growth. For Main street, Treasuries recorded their third consecutive week of gains, drawing some strength from speculation that the Fed could pause its rate hikes in September. The 10-yr yield finished the week just a basis point above its 50-day moving average (2.73%).

In terms of China/HK market, it was strongly helped by Alibaba's positive quarterly earnings and a rebound in the US market boosted =, with the Hang Seng Index rebounding 2.89% on Friday, narrowing the week's loss to minus 0.1%, whereas China's A-shares remained under pressure, the CSI 300 Index fell 1.87% for the week. The impact of the epidemic was compounded by weak economic data in China, industrial profits fell by 8.5% YoY in April, the first contraction since early 2020. Earlier in the week, Premier Li Keqiang announced a package of further measures to stabilize the economy, including a tax rebate of over 140 billion yuan, accompany with policy loosen on Qovid related restriction.

In terms of major global asset prices, WTI July crude oil futures closed up 0.86% at $115.07 per barrel, hitting a new closing high for the main contract since March 8 and rising for three consecutive days; Brent July crude oil futures closed up 1.73%, It was reported at $119.43 per barrel, rising for seven consecutive days and hitting a new closing high since March 25 for two consecutive days. New York gold futures rose slightly for two consecutive days. COMEX June gold futures closed up 0.20% at $1,851.30 an ounce. It closed at $1,850 for the first time in the last three days. It has risen by about 0.45% this week and has risen for two consecutive weeks.

Next week economic event:

US:

Mar 30

• Memorial Day Holiday

• the Federal Reserve Director Voller delivered a speech on the US economic prospects

June 1

• ISM manufacturing index in May

• the initial value of the durable goods order in the United States in April;

June 2

• the final value of the U.S. durable goods order in April

• the FOMC voting Committee,St Louis Fed Chairman Bullard will deliver a speech on the prospects of the US economy and monetary policy in 2022

• the Fed announced the brown book of economic conditions

June 3

• Non-farm payroll in May

• average hourly wages in May

• the ISM non -manufacturing index in May.

China:

May 31

• Non-manufacturer PMI

June 1

• Caixin Manufacturer PMI

• Ecommerce meeting in Fuzhou

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