US markets continue to move upward once again led by Tech and Communication sectors. The energy sector was the weakest overnight. Sentiment overall in the US markets remains positive ahead of the FED announcement Thursday. We expect to see an overall update on the economy and a plan for inflation moving forward. Out of all things of late the FED can be a major mover of markets.
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 133 companies that have reported, 39.10% have beat expectations and 27.07 have seen EPS growth.
At this point in the reporting season, the only sectors as a whole that are beating are Tech, Utilities, and Consumer Discretionary.
The XJO is expected to have a weak open this morning despite the U.S continuing their run into fresh all time highs and their futures sitting flat this morning. It is curios as to why our market won’t share in the positivity of overseas and break the 6200 post fall high level, though if U.S futures remain flat today there is a good chance we retest it.
It seems at this stage that our market is happy just tracking sideward, but it is now less clear as to what we are waiting for to spur movement. It is likely that in order to see a rally we need the Financials and therefore the Big Four to join the party. With trouble around that sector and uncertainty caused by the virus, this is likely holding our market back from pushing through. The Materials have done the heavy lifting so far, but recently they have track sideward to lower. If we can see both these sectors push back to their highs in the coming weeks, we should see our market push through.
US shares ground out another gain overnight, although movements were fairly muted. It was another all-time high for the major S&P 500 index, which has continued to tick a bit higher after breaking through its previous all-time high a couple of days ago. US shares continue to be buoyed by the Fed meeting this week, where they are expected to announce further measures to generate inflation.
Optimism around a potential vaccine and a warming of US-China relations over the past week is also playing a part. Technology, Healthcare and Financials were the sectors that rose overnight, while every other major sector closed lower.