Financials joined the Materials, Industrials, and Energy sectors to push US markets higher overnight. Stronger than expected reporting from Goldman Sachs Group Inc which beat expectations by 60% help lead the charge rising. US Bancorp beat by 9.6% but fell.
Up until this week, the tech-heavy Nasdaq has been leading the charge higher. But now other sectors that have underperformed are gaining momentum. There is still value in other areas for the US markets and reporting seasons are waking investors up to this. Also, Vaccine hopes are helping Airline and travel stocks
Talks of a stage 4 lockdown are becoming very real in Victoria with many people calling for a complete lockdown to eliminate the spread of Covid-19. At this stage, Victoria Premier Daniel Andrews has only used stage 4 as a threat but overwhelming public polls have the majority pushing for stage 4. This could see Australian stocks lag further.
With positive leads from the U.S last night and weak to positive leads from their futures this morning our market is set to open slightly higher. We should hit the local interim resistance at 6100 this morning on open. To push through today we will likely need to see U.S futures push stronger into the green.
We are still lagging behind the U.S. Their market ran to their recent high last night, the equivalent of 6200 for our market. This gives our market confidence that we should reach it soon.
We have managed to hold the uptrend and bounce, and yesterday’s momentum hopefully will be carried through today.
We have a slew of data being released today. Eyes will be on local unemployment data (11:30am) and new home sales (10:00am) as well as Chinese data (12:00pm). All these things have the potential to move markets typically, but so far markets have shrugged off negative news.
US shares pushed higher overnight, with a slew of positive earnings results helping shares back to their highs. Goldman Sachs, UnitedHealth, Progressive, Bank of NY Mellon, and many others all reported earnings that were better than expected for the second quarter, perhaps indicating that the effects of COVID-19 on company profits isn’t as pronounced as first thought. To be fair though, earnings expectations had been lowered substantially in the lead up to this season. Stocks were also helped higher due to optimism around a vaccine, with US infectious diseases expert Dr Anthony Fauci telling a university webcast that efforts were progressing well. Oil & Gas and Basic Materials stocks were again the standout performers, while every sector other than telecoms and utilities also saw gains.