US markets continue to push higher as investors continue to enjoy strong US company reporting along with strong Building and Housing data. The data we saw last week highlighted the extreme strength of the US economic recovery.
Locally some of our banks report early May and most Miners and Energy stocks will have quarterly production reporting this month. Expectations are strong for our own domestic reporting, with continued recovery expected here as well.
Chinese data although missed expectations on Friday, is also demonstrating a strong rebound in economic activity. This is incredibly positive for our equities market as well, as we tend to move with both US and Chinese markets as they tend to be a bell weather for our local economy.
The XJO is expected to edge higher on open this morning following a strong night in U.S markets where fresh all-time highs were made once again. The rally expected this morning, though meek at this stage, helps solidify our move past the 7000 level. A break of the recent consolidation should hopefully lead to further bullish movement with 7200 (our all-time highs) in the cross hairs. We will likely need the U.S to continue making gains for us to have permission to get there though.
As a vaccine becomes more prevalent and more economic activity opens, we would expect this to positively influence share prices; we, therefore expect shares to in general continue higher for the medium to longer-term. However, as stimulus to the global economy is reduced and if short-term interest rates are lifted, we would expect the pace of gains in share prices to slow.
US shares pushed higher again on Friday, with the flagship S&P500 pushing further into all-time highs. US markets are currently in the middle of an earnings reporting season and it is progressing rather well. Friday saw reports from Morgan Stanley, PNC Financial, State Street, Bank of NY Melon, and more; just about every report beat consensus expectations. So far, 81 percent of reporting stocks have beat their earnings expectations, which is helping markets push further higher.
US economic reporting wasn’t as positive though, with US consumer sentiment weaker than expected, while building permits were stronger than expected. Basic Materials and Telecoms stocks were the strongest performers in the US on Friday, with Oil & Gas and Technology stocks the weakest performers.