Market sentiment was strong overnight with the SP500 breaking the key 3,400 level. It seems to be from a combination of Coronavirus treatment hopes and the up incoming FED announcement. The U shaped recovery has been led by stimulus, the FED’s QE infinity being the leader. Most are expecting the FED to confirm this type of spending to continue and their forward view of what is to come.
Overnight, Energy and Financials led the move higher, followed by materials and Industrials. Healthcare was the only sector to close lower.
Locally it is all about reporting for the moment, we are seeing a very mixed reporting season, at this stage, the majority are missing expectations in the face of COVID-19 related issues. Out of 121 companies that have reported 38.02% have beat expectations and 26.45 have seen EPS growth.
At this Stage from a sector point of view, Tech and Consumer Discretionary are the only sectors that have beat earnings expectations.
With positive leads from the U.S last night our market is set to open higher this morning putting us near the post fall highs of 6200. U.S futures this morning are flat to red, and if they remain weak during our session today we may not get through our post fall highs despite the U.S making fresh all time highs last night.
We continue to trade in the broad ascending triangle, and the more shorter-term channel between 6200 and 6000. If the U.S continues bullish following the break of their all-time high resistance, our market should eventually break both the triangle and channel to the upside. Whether this happens in the coming days or weeks is hard to speculate as the modus operandi of our markets of late has been sideward.
US shares broke through their all-time high resistance levels overnight, with the major S&P 500 index closing firmly above the pesky 3,400 level for the first time ever. Markets notionally rose with the promises of massive funding for virus vaccines and treatments from the Trump administration. There is also talk of potential bypasses in regulatory standards to speed up the vaccine development process.
The market is also looking towards the Federal Reserve’s annual policy review meeting where they are expected to announced plans to more aggressively pursue the inflation target. Two large storms are rolling towards the US Gulf Coast, but much of the oil production in the region has already been shut down. In strong trading overnight, Healthcare was the only sector out of 11 S&P industry sectors to finish lower.