This Week's Market Analysis: US Highs, China Drops

Global Markets Stocks and Indexes
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U.S. stocks capped the week with a record close on better-than-forecast earnings. Treasury yields fell after data signalled moderate inflation.

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Chart from Sigma by Hydra X

S&P 500 Index closed at an all-time high of 2,939.88 after posting a 1.2% gain for the week following positive surprises from earnings releases. U.S. GDP expanded at a 3.2% annualized rate in Q1, beating estimates of 2.3%. Underlying data indicated softer demand, with weak consumer spending and a gauge of inflation coming in below policy makers’ target.
Despite breaking through to new all-time highs, a note of caution that momentum indicators do not seem to be validating price action. Bearish stochastic divergence has formed, in tandem with decreasing volumes.

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Chart from Sigma by Hydra X

Meanwhile, in China, the Shanghai Composite endured its worst week since October, demonstrating the influence that Beijing continues to yield over its markets. The index lost 5.6% for the week after the government signalled that it would pare back support for the economy amid evidence of a recovery.
The index has lost all its gains after breaking out of a bull flag earlier in the year; it has retraced back to ~3,080 support levels.