Sentiment in the US market continues to edge higher, as most investors expect the US coronavirus aid bill to pass this week. Also, hopes of treatment and a vaccine is keeping investors from selling despite weak earnings.
Energy, Industrials and Materials led the move higher overnight. Financials in the US pushed out a slight gain. Whilst Health Care, Info Tech, Communication and Utilities where slightly in the red. We seem to be seeing a little bit of a switch out of some Tech and Communication and back into some of the cheaper sectors.
US earnings are almost finished. Most companies are beating expectations, out of the 439 in the SP500 that have reported 347 (79.04%) beat expectations and 92 (20.96%) missed.
CBA will be one of the more important reports tomorrow, as it gives an insight on how things are going in the economy. It will a true test to see if Keepers’ allowance has been able to save a lot of businesses or not. Residential real estate at this stage is expected to be ok with loan holidays and increased Seeker allowance.
GPT’s report gave us an insight into how bad commercial real estate is going. The report of negative earnings really highlights how much the virus has affected this part of the economy.
Yesterday, the strong move higher was our market trying to play catch up to the U.S, helped by a fall in the AUD/USD and a rally in the financials – our largest sector (dominated by the Big Four banks). Our market approached the post fall highs of roughly 6175, and we were perhaps set to test it today, but with U.S futures in the red and little leads from them overnight, our market is set to open softly. If their futures remain in the red during our session, we may just track sideward which seems to be the modus operandi of our market of late.
We continue to trade in the broader ascending triangle, and the more immediate channel. We broke the short term counter trend with our strong move yesterday, but as previously stated, we cannot expect continued directional movement in this type of market. Eventually volatility will return, but with conflicting fundamentals and sideward technical, its hard to say when.
We are currently in a reporting season, and over the next couple of weeks, it could wake our market up to start moving one way or the other. Regardless, the pressure remains to the upside in the longer term, so we must continue to assume bullish to sideward movement overall.
Be aware of reporting dates of any trades you are in by checking them in the earnings calendar in the Market Data section of the Member’s Website. Always double check them by going to the company’s website as they can change.
US shares pushed higher again overnight. It was the seventh straight gain for the major S&P 500 index, which is now roughly one percent away from its all-time high. The rally came despite further tit-for-tat actions in the US-China political drama, with China announcing their own sanctions against top US officials overnight. We did see a strong rally in crude oil, which was of definite benefit to the market. US shares remain strong despite the expected stimulus still not being agreed upon by lawmakers.
Parts of the current fiscal stimulus package will run out this week, and with markets back at their highs, investors will be hoping that the next stimulus is quickly passed. Materials, Financials, and Oil & Gas stocks were the best performing sectors last night, while Healthcare and Technology stocks fell.