Value continued to be the theme overnight with Financials, Materials, and Industrials leading the market higher. The energy was one of the weaker sectors after Crude crashed back down again. Markets are a bit lost in the short term but the medium to longer-term indicators still look bullish.
The US is acting more swiftly to stimulate to balance out Covid lockdowns. Including a potential 3 trillion in infrastructure spending. Vaccines are being rolled out as expected and selling in bond seems to have calmed for the moment.
But in the short term, the is a level of cautiousness at current levels. Investors seem to still be shaken up from the thoughts of potentially higher interest rates.
Locally though we are seeing the ending of our government Covid aid with the Keepers allowance and Seeker subsidies ending. People are still trying to work out how much of an effect there will be on the economy with many companies still leaning on Keepers.
In this market, it is better to do Short-Iron Condors and Options strategies that profit from time decay. With Easter next weekend we will also get 2 extra days where the market is closed. So this week is a good week to start looking at the 8th and 15th of April expiries for premium. Keep in mind though around the middle of April and into May June markets tend to start to become a little more volatile again.
We are set to finish the week strong, with the XJO expected to edge higher on open this morning. U.S futures sit mildly in the green which should help us hold onto the gains. It has largely been a week of gains as we bounced from the bottom of the channel near 6650 and today may see us go onto to test the top of the range near 6850.
It is starting to feel that positivity is returning to markets, but whether that will get us through the post pandemic high of 6950, or even beyond the recent range is still uncertain. Regardless of whether get through or not this run up, the trend still remains bullish and therefore we would expect to continue eventually.
The AUD remains low but continues to hold 75.5c vs the USD. This should continue to help keep our miners buoyed against weak to flat commodity prices.
US shares closed higher overnight, ending a two-day run of losses. Tech shares still lagged, but managed to hold their levels. Share markets remain sold on the idea of a strong economic rebound and indeed, consensus estimates from economists suggest that the US economy could grow by around 6 percent this year.
Overnight we saw Q4 2020 GDP from the US, which showed growth at an annualised rate of 4.3 percent. We also saw US jobless claims data, with both continuing and new jobless claims coming in better than expected. Every major sector pushed higher overnight except for Technology stocks, which closed pretty much flat.