Over the past two sessions, the SP500 pushed into an all-time high, but this time lacked the same enthusiasm as recent breakouts. With the move higher more of a grind higher it often can continue to just grind higher and higher over a period. Rather than jump all at once and then pull back or go sideways for months and months.
Markets are putting inflation fears to the side as many believe it will only be transitory. Investors are also expecting the FED to not start to taper bond buying just yet. What investors will want is either more confirmation that monetary policy will not change for a while or a clear and slow timeline for tapering. The FED will be meeting this week, so the market will react to their announcement Wednesday night.
Iron Ore has jumped again with the port price now back to $220 US a tonne. Iron Ore is still way above most analyst’s expectations, yet the miners are still having not traded any higher than when Iron Ore was at $180 a tonne. Watch this space between now and August reporting.
The XJO is expected to open fairly flat despite U.S markets rallying overnight. Our open this morning may be hesitant because it is a Friday and the U.S will have all weekend to digest and mull-over the CPI readings from last night. In addition, U.S futures sit flat this morning, giving little clue as to how they will continue to trade going forward. Finally, yesterday’s rally practically anticipated the move higher in the U.S with our market sitting near the top of the short-term consolidation range alongside theirs.
If we drift lower today, expected the new support at roughly 7260 to hold, and if we edge higher then our intraday highs are roughly 7340.
US shares closed fairly flat overnight, with the flagship S&P 500 index rising for the third straight session and closing at a fresh all-time high level. There was little in the way of US economic reporting overnight, so investors speculated on the upcoming Federal Reserve meeting, which will occur on Wednesday night Australian time.
The Fed is expected to hint at a timetable for the tapering of their quantitative easing program, which could unsettle markets depending on the timing that they indicate. Overnight, three S&P 500 stocks closed lower for every stock that rose, but this wasn’t enough to pull the index into the red. Materials and Financials stocks were the weakest performers overnight, while Technology and Communications stocks were the strongest.
- Markets set to start August in the green - August 2, 2021
- XJO to open higher with US shares back at record highs - July 30, 2021
- Investors take risk off the table ahead of the FED meeting - July 28, 2021