Overnight, the US markets closed mixed, as selling in Tech stocks offset gains in strong Bank reporting. The SP500 retreated slightly from its all-time high. Over the next few weeks, markets will be focusing closely on US reporting. So far it is a strong start, but most of this is likely to be already priced in.
For the US markets to keep rising we will also need to see strong forward guidance. The strong earnings results for the US banks so far has mainly come from investment banking and equity market brokerage.
Locally some of our banks report early May and most Miners and Energy stocks will have quarterly production reporting this month.
Biden gave markets reassurance that the Vaccine rollout is still on track despite the J&J Vaccine hold-ups. Markets are still in a good place overall for the moment, as long as we continue to see stories of recovery in the company’s earnings and strong forward guidance for the EPS market will hold the overall uptrend.
The XJO is expected to open higher this morning on the back of fresh highs overnight in the U.S. Our open should have us go on to test the local resistance we have stalled at recently at roughly 7000. You would think that with the stellar run the U.S has seen, with fresh highs made once more overnight, our market would have the courage to keep moving higher. But, because U.S futures are slightly in the red, we may instead hold 7000 once again. In addition, Chinese markets haven’t been performing well, which may be weighing on our miners – the second largest sector on our market.
Regardless, markets remain strong for the moment in the short term, and we expect the strength to continue for the at least the rest of the month. Hopefully, our market can continue to share in the gains.
US shares were mixed overnight, with the flagship S&P 500 closing lower. Several of the largest banks were the first of the major US stocks to report earnings overnight, with Goldman Sachs and Wells Fargo rising strongly on their reports, while JPMorgan fell slightly on its earnings release; regardless, each result was ahead of analysts’ expectations. We also saw Fed Chair Jerome Powell overnight, who stated that the Fed will taper its bond purchases well before it considers rising interest rates.
Some of the selling overnight surrounded concerns that the Biden company tax increases could hurt corporate growth. In US economic data overnight, there were again smaller than expected crude inventories. Tech stocks were the weakest performers overnight, while Oil & Gas and Basic Materials stocks were the strongest.