The Tech heavy Nasdaq managed to push out a slight gain overnight whilst most other majors closed in the red. Energy and Real Estate led the fall last night, Tech and Communication services closed slightly higher whilst the rest were only slightly down.
In the short term markets are becoming undecided again which is no surprise considering the SP500 is back to the all-time high resistance levels. The US is the only markets to achieve this since the February pullback. Locally our XJO has almost completely disconnected. But some sectors and companies have not.
The reality here is that less than half of the SP500 companies have hit all-time highs. But there is a lot of companies that have benefited or will benefit from COVID lockdowns that have not only recovered the pullback but have moved much higher than where they were a year ago. Most of these are names we all know like NVIDIA, AMD, Amazon, Apple, eBay, Domino’s Pizza, Pay Pal, just to name a few.
Unfortunately for the Bank heavy XJO, we are lagging, but there has been plenty of opportunity in the background. As traders and investors, we need to be looking at what companies or sectors will move up next, and not be too focused on the XJO index. We do have some outperformers like Kogan, Afterpay, and many Materials and Mining companies that have continued to rise strong after the overall pull back.
The XJO is set to open flat following a slight pull back in U.S trading last night. Yesterday we clearly held the key resistance and post fall highs of roughly 6175. With U.S futures being flat to green this morning, our market should stay buoyed and track sideward.
Despite the U.S being a hair off all-time highs, our market is still not willing to push through key resistance, continuing to trade in the broad ascending triangle. Hope remains that our reporting season gives the market a kick start it needs to play catch up. NAB reported decent numbers this morning, and along with CBA’s recent report, this could bring back some volatility into our largest sector and largest players of our market.
News remains focused on the virus both locally and abroad, though the media is starting to shift its magnifying glass to the U.S election which is only a hot minute away in November. How the market interoperates the election in conjunction with everything else going on is foggy at best, but market participants need to be aware of the very real impact it will have.
US shares fell off again overnight but they continue to trade just below the all-time high. The selling has been blamed on a stalemate in the stimulus negotiations, with the US Democrats and Republicans so far unable to agree on the size and scope of the next fiscal stimulus package. We also saw US Jobless Claims data overnight which came in much better than expected, with initial jobless claims dropping below 1 million people for the first time since March. We will see US retail sales data tonight, which will also provide some insight into the current strength of the US economy. Technology was the only major sector to rise overnight, while Oil & Gas stocks fell off the hardest, every other major sector was slightly lower.