It seems that US markets could sit in limbo for a while as they have come out of reporting season and look to what is next. Besides the fact that everyone is waiting for the next round of US fiscal stimulus, the election is now just around the corner. There seems to be a very mixed mood on how the market will react if Biden wins. Until now Donald Trump has been good for market overall.
Vaccine hopes along with Central Banks being extremely accommodative and a lot of Fiscal stimulus continues to help markets momentum to remain up for now.
This week reporting will be looked at under a microscope to give us more insight into how things are really going out there.
With weak leads from the U.S last night and flat futures this morning, our market is set to open flat to higher. The XJO seems reluctant to push either way as we both digest the current earnings season and wait to see where the U.S heads.
We maintain the broad triangle pattern, with our trading seeming to be stuck between key support at 6000 and post fall highs of roughly 6175.
Right now the focus is on reporting as our market sorts between the winners and losers. Covid has affected virtually all businesses, either positively or negatively. For ones that suffered, we look to their forward guidance.
US shares climbed higher overnight, but failed to eclipse the all-time high that they have been grinding towards for the past week or so. Instead, the major S&P 500 index closed roughly 10 points away or about 0.3%. Gains were driven in part by the announcement of fresh Chinese stimulus as well as strength in the major US listed technology stocks.
On the flip side of things, the next round of US fiscal stimulus still has not been delivered and with the parties starting to focus on the upcoming elections, it may be difficult for a consensus to be reach in that regard. Technology, Basic Materials, and Healthcare stocks were the strong performers overnight, while Financials and Oil & Gas stocks were the weakest.