The Nasdaq jumped higher lead by Tesla +9.47%, Zoom Video +8.94%, and Amazon +7.93% just to name a few. It is interesting to watch the switch to and from the Nasdaq and other key indices in the US. IBM’s Beat on EPS and revenue and closed 1.01% higher and is up another 4% in after hours trade.
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.
We are expecting more news around Keepers and Seekers allowance. At this stage, the government has indicated that it will be extended until March next year. But the payments will be reduced. There will be a new eligibility test for job keeper 2.0 to weed out those businesses that have recovered over the past six months.
So, at this stage we will expect certain sectors to remain weak whilst others will thrive. Keep an eye on the Iron Ore miners, BHP reported quarterly production today which puts them in the sport light. The Iron Ore and Steel space has not bee effected by COVID-19 other than Vale temporarily closing a mine in Brazil. Iron Ore prices are at yearly highs, whilst RIO and BHP are set to achieve healthy production levels. FMG reports quarterly production next week.
The XJO is set to open near 6050 this morning following positive leads from both the U.S session last night and their futures this morning. The move puts us rebounding off the uptrend line but keeps us under the counter trend and inside the pennant pattern we have formed over the past month or so.
We may see a break today if U.S futures move stronger into the green. If not, a break of the counter trend at this stage seems more likely than not in the coming days. We will break the pennant this week, but do not be surprised if the move is lackluster if we do not see strong leads from overseas.
Fundamentally, nothing has changed much. Locally the government plans on extending stimulus through the form of Job Keeper and Seeker through to next year, albeit at a reduced rate. We will likely continue to see stimulus from governments and central banks to combat the tide of recession hitting global economies.
US shares pushed higher overnight, defying a weak lead from their futures market. Talk about promising vaccine trials and the potential for fresh stimulus helped push sentiment into the positive. US shares have now essentially returned to levels around the start of the year, before the virus selling began; this has mostly been driven by technology stocks who climbed to another all-time high overnight. It was tech stocks that again led the charge overnight, with the tech heavy NASDAQ index closing almost three percent higher. Most other major sectors were flat to lower.