As predicted the US markets are continuing to trade sideways as they test all-time high resistance. Strong US economic data enabled the market to edge higher, but we are still waiting for 3,400 to break. With the US reporting behind us and the FED on a clear path, US markets will be focusing on the election, a viable Vaccine, Economic data, and Fiscal Stimulus.
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 106 companies that have reported 35.85% have beat expectations and 23.56 have seen EPS growth.
The talk out there around stage 4 lockdown in Vic is leading towards it extending further than the 6 weeks. The Average number of daily cases has dropped dramatically, but there is talk that it will daily cases need to be back around 10 before easing lockdowns.
The market is expected to open fairly flat this morning. U.S futures are in the green which will likely give us a positive day if they remain so during our session. With a new week a head of us, we are probably reluctant in making any real headway one way or the other without fresh leads from overseas.
We continue to trade in the broad ascending triangle between the longer term uptrend line and the post fall highs of roughly 6200. In the more immediate term, we continue to channel between key support at 6000 and the 6200 resistance. This largely spells sideward movement for our market which we assume will continue until we see a break, or a strong enough catalysts.
This catalyst could come from any of the major news dominating our news cycle, but our reaction will likely be in step with the U.S pushing hard one way or the other first. Locally Victoria numbers are getting better, providing hope that there is an end to the lockdowns and a reopening of one of Australia’s largest economies.
It is another big week for earnings reports. Notable companies are: FMG today; ANN, PRN, OSH, AWC tomorrow; WOR Wednesday; APT, WOW, RHC, MSB Thursday; HVN, BLD Friday.
US stocks reached an all-time high points level on Friday, but the major S&P 500 index was unable to rise through the milestone 3,400 level. US shares rose with some fairly positive data releases, including services and manufacturing PMIs coming in better than expected, as well as strong home sales numbers.
The US Federal Reserve is holding their annual monetary policy symposium this week, and Jerome Powell will announce any results on Thursday; many are expecting they will become more aggressive in their attempts to generate inflation. Technology stocks were the strongest performers on Friday, while most other sectors were mixed.