Markets in the US overnight continued higher on Vaccine and fiscal stimulus hopes. Sentiment remains strong in the US markets despite China tensions and uncertainty around the pandemic.
Another strong night of reporting in the US. Most companies are beating expectations, out of the 374 in the SP500 that have reported 301 (80.5%) beat expectations and 73 (19.5%) missed.
Our market continues to lag, stuck at the 6,000 level, Stricter business lockdown in Victoria starts today. Online shopping and Grocery stores should remain strong as they grab what is left of retail demand. Even though the XJO continues to edge sideways there are stocks and sectors that are still performing well.
Keep an eye on retail stocks like Kogan, JBHIFI, WES, WOW and COL. Staples should continue to do well along with some of the big online discretionary.
Miners also continue to do well despite the stronger AUD, Metals and Iron Ore have been performing well, and most miners don’t get effected by Vic lockdowns.
With positive leads from the U.S our market is set to open higher. We held 6000 yesterday and our open this morning will have us clearly rebounding from it. Our market has been yo-yoing the past few days as positive sentiment from the U.S struggles to hold out market up against Melbourne going into lockdown and new NSW cases. We seem reluctant to rise at this stage, but if the U.S keeps pushing higher, eventually our market should push through the post fall highs of 6175.
We must continue to assume the market is generally traveling sideward to bullish, with it still trading in an uptrend, but the short term pattern being a channel over the past few months.
The banks are disappointing the market perhaps due to the likelihood of increased bad debt due to lockdowns. The miners and tech stocks are the real heroes with the former making up roughly a fifth of the XJO. Despite a rising AUD/USD appreciating commodity prices have had most of our miners running hard and keep the market from falling.
US shares pushed higher again overnight, with the major S&P 500 index now almost back to where it was before the virus related selling. US stocks rose with optimism around a vaccine, as well as a belief that US legislators would getting closed to a deal for additional fiscal stimulus. US economic data was mixed, there was a US oil inventory read that showed a much bigger drawdown in inventories than anticipated, but there was also a jobs report that showed far less jobs created than expected. Telecoms and Utilities were the worst performing stocks overnight, while every other major sector rose with Oil & Gas, Basic Materials, and Financials doing the heaviest of lifting.