Many markets have pulled back sharply and now look oversold in the short term. The US election has many people on the sidelines moving to less risker assets until the noise of the election is over. We have seen a very whippy sideways market locally since around August. Every time we have seen this type of sideways move when it breaks it tends to lead to a trending market.
At this stage, it seems everything is lining up for a run into the end of the year. But we don’t know what we don’t know, we can still be thrown a few things from left field this week from the US election.
Ultimately it is widely believed that Biden will be more positive than a Trump win, overall we would be happy with a clear winner and a path forward for more Fiscal stimulus in the US.
Locally markets seem to be set to push higher into Christmas as we see the economy reopens more and more. Vic is likely to see another round of restrictions removed sooner rather than later with low active cases and daily cases at or near zero. We are seeing QLD open to regional NSW this week, we expect this kind of news to continue in the coming weeks and months until we see a much better COVID-19 normal.
Banks reporting has been mixed so far. BEN last week was a better-looking report than ANZ and WBC. WBC yesterday missed expectations. We have NAB Thursday 5th Nov and MQG Friday 6th Nov. CBA will give a trading update the next week.
The XJO is expected to open near 6000 this morning, roughly 30 points higher, following strong leads from the U.S overnight.
Yesterday we finished in the green after retracing from our lows – a positive sign that the market for now is simply waiting for the election tonight.
We will likely know with a good degree of confidence who the next POTUS is tomorrow afternoon, and we expect markets to react one way or the other.
6000 marks a key level, and its no surprise the market is hanging around here until it gets further leads.
US Shares pushed higher overnight, reversing some of the losses of the past week, which was the worst since March for US shares. Tech stocks continued to lag as investors favoured stocks that would likely benefit from the expected post-election stimulus programs; a sign that the market is starting to look past tonight’s presidential vote.
US economic data is mostly coming in better than expected at the moment, and indeed we saw better than expected manufacturing numbers overnight. Oil & Gas and Basic Materials stocks were the strongest performers overnight, perhaps boosted by the manufacturing numbers. Every major sector closed higher, with tech stocks flat for the session.