US markets continue to be volatile; we saw the key indices up overnight but most of the gains were given back. The mood in the US around markets is not great and as the virus numbers start to increase again, we can see a clear message here. Give us more stimulus.
Not much has changed, US markets want to see more fiscal stimulus but with the election around the corner, it looks like they will be waiting. Markets tend to be volatile before an election and this year at this stage is no different.
Locally things are starting to get better in regards to Covid cases. We are also seeing borders start to reopen and talks to have overseas students back next year. But for now, the focus will be on the Federal budget which is around the corner.
With positive leads from the U.S, our market is expected to open higher near 5900 this morning. The U.S held an extraordinarily strong key support at 3200 last night which may give our market confidence in holding gains today. Their futures also sit strongly in the green which should lead to great gains after open if they remain so during our session today.
Despite the positivity last night, both the U.S and our market are trading in short term downtrends. Our downtrend line comes in at roughly 5925. It is unlikely that we break this level with any real conviction today and so we must assume that it is likely to hold come Monday. If we do see another strong rally and push through, the next target would be the major 6000 level.
US stocks rose overnight with some renewed optimism around the potential for a further round of fiscal stimulus form US lawmakers ahead of the election. Most analysts view the prospect as still unlikely, but indications from Democrats overnight that they were considering a new stimulus bill helped sentiment. The continued strong spread of the coronavirus is continuing to wreck economic havoc, so a further fiscal stimulus bill is viewed as necessary by the market.
Overnight economic data was mixed, with Jobless Claims were than expected, while Home Sales were better than expected. Utilities stocks were the strongest overnight, while Health Care stocks closed lower, every other major sector was slightly in the green.