US Markets seem to be sending a message to the government for more fiscal stimulus. The FED signaled they will continue the current path which is extremely accommodative.
The sentiment in markets is mixed, leaving markets whipping sideways. With many now on the sidelines waiting for a catalyst to make their next decision. The sideways action is not just seen in the Equities markets. This could be because many investors are now waiting for the election which could mean further volatile sideways movements to come.
We saw many extremely negative articles around the banks locally, suggesting they will call 450,000 people to foreclose on loans. This is not the reality, they will be calling people on loan holidays and will discuss options. They may extend the holiday out another 4 months, offer part payments, or even look to moving the loan to interest only, to bring the repayment lower for a period. The expectation is that it will be the property investors that will be hit the hardest. Investors may have to foreclose as there are other costs involved in having investment properties.
Keep an eye on the banks in the near future, as things may not be as bad as people think. Especially if Melbourne comes out of lockdown early.
The XJO is expected to open flat near 5950 this morning. This is following negative leads from the U.S last night and their futures flat to green this morning.
Technically, the market continues to hold support and is likely to going forward provided the U.S holds theirs. Considering we continue to track in the channel we must continue to expect sideward movement with perhaps a small crawl back to the top of the range. The first target is the major level of 6000 which looks promising at this stage.
Our market is being lead by the U.S once again, as most markets are. The large sell of recently was caused by them, and any recovery will likely be as well. Therefore, we must look to their news around stimulus and the fed last night when understanding the fundamental pushes and pulls of our market.
US shares pushed lower overnight, with tech stocks once again leading the selling. This came despite The Federal Reserve indicating that interest rates would remain at their current extremely low levels for at least the next three years. However, he did add that the economic recovery is more uncertain without further fiscal stimulus from the US government. Some investors opined overnight that the delays in the latest round of fiscal stimulus are weighing on equities, and the White House signalled overnight that it is willing to make concessions with discussions with Congressional Democrats in order to get a deal through.