Reporting in the US is coming in mixed as expected. So far we have seen the likes of Netflix which is the first of the FANG stocks to report. It missed expectations slightly but did post a growth in EPS for the Quarter. Netflix shares fell 6.5% on Friday. As we see more and more companies report we will see switching from companies that do not report well to companies that do. As this plays out, we will be looking for themes insides industry to help paint a picture on how stocks will report in Australia come August.
Stage 4 lock down in Victoria seems unlikely for now as the Victorian government tries different tactics of getting the virus under control. As of Wednesday night, wearing masks will become mandatory when leaving the house.
If NSW see a wave two like Victoria, we could see further pull backs in certain stocks like Sydney Airport, Webjet and Flight Centre.
Our market is expected to open flat to green following similar leads from the U.S in both their Futures this morning and their trading session on Friday.
The XJO is trading in a pennant pattern, and we are being squeezed into the very tip of the triangle. We must break it this week and we must assume it will be to the upside in the direction of the underlying uptrend. On the other hand, we may just continue sideward and have a rather lackluster break if we do not get strong leads from overseas. We look to 6200 as the next key resistance to the upside, and 5900 as the next key support.
US shares pushed a bit higher again on Friday, with company earnings reporting continuing to largely meet or exceed analysts expectations. There was also talk of further economic stimulus around the from many Western nations. Friday’s gains game despite some mixed economic data, with US building permits and consumer sentiment worse than expected, while new housing starts were better than expected. Oil & Gas stocks were the worst performers on Friday, with oil prices coming off. The other major sectors were mostly positive, with Utilities and Healthcare stocks seeing the strongest gains.