What an eventful start to the year for US politics. Democrats managed to get a majority in the House and now the senate. And now Donald Trump gets impeached for a second time in the house. With all this happening US markets continue to edge higher. This just shows how quickly market influence can change. Previously something like this would see markets selling off.
With more stimulus on the cards, the general feeling is this market is likely to continue higher overall, but we could see a breather here as well. US markets have put on very strong gains already this year.
US company reporting kicks off tomorrow. We will see some of the big US banks on Friday; JPMorgan, Wells Fargo&Co, and Citigroup. Reporting could trigger certain stocks to move largely as we get further insight into how well or bad stocks are going in this uncertain environment. Keep in mind people will be focused on future guidance more than current profitability.
Australian Outlook
With another lackluster night from the U.S, our market is expected to open fairly flat this morning. U.S futures have edged into the green, and if they can gain further during our session today, we should follow suit.
We continue to trade in no-mans land, between the two key levels that define the channel we have been stuck in the past month or so. It is likely we continue to track sideways with the U.S as we head into their reporting season beginning Friday night.
US Markets
US shares closed fairly flat overnight as US politicians voted on a motion to impeach Trump for a second time, although if it succeed, it’s unlikely that the subsequent Senate trial will occur before his term ends next week. Prices have been mostly flat for the past few sessions and are holding very near all-time highs. US shares were buoyed by comments from Fed members that there would be no tapering to the bond buying programs anytime soon.
US share are about to enter a reporting season, which kicks off on Friday with JP Morgan, Citigroup, and Wells Fargo. We will also see President elect Joe Biden lay out his stimulus plans tonight. Utilities was the strongest sector overnight, while Technology, Healthcare, and Financials also rose. Basic Materials, Oil & Gas, and Telecoms stocks closed lower.
Tim Michaelides is the Head Trader at Emerald Financial Group.
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