Value stocks grabbed a bid overnight as Growth/Tech lead the US major indices lower. All in all, though markets in the short term are whipping sideways. Any theme in this market is not lasting more than a day or so at the moment.
As President Joe Biden’s infrastructure deal become closer to reality we expect Materials to take another run, so many of our miners could become attractive in the coming month considering recent pullbacks.
The XJO is expected to edge lower on open this morning following bearish moves in the U.S last night. U.S futures are slightly down, which may hold us in the red in our morning session.
We continue to track sideward in a tight range between roughly 6850 and 6650. We will likely need a strong catalyst to push us one way or the other now.
The AUD sold off again overnight, which will help our miners remain buoyed.
US shares closed lower overnight, with weak tech shares dragging the major indices lower. The general theme was a rotation out of stocks that did well during the pandemic and into stocks that fared poorly. US Fed Chair Jerome Powell and Treasury Secretary Janet Yellen both spoke overnight and offered an optimistic view of the economic recovery, which helped markets stabilise.
Economic data was fairly weak however, with durable goods orders and manufacturing PMIs weaker than expected. We also saw a large build-up in US oil inventories, though this wasn’t enough to lead oil lower, with speculators driving prices higher after a large tanker got stuck and blocked off the Suez Canal. Technology stocks were the worst performers overnight, while Oil & Gas stocks were the best performers, most other sectors were relatively flat.