The US election is only days away keeping markets on a knife edge. In the very short term, we will likely see markets whip around in a volatile fashion. There is a mixed sentiment on whether Trump being re-elected will see markets fall or not. At the end of the day, markets like certainty whether it be negative or positive. With the virus daily numbers jumping, the market wants to see a clear path forward on more fiscal stimulus. Much of the next few weeks of movement will likely be pegged on how quickly the US get a fiscal stimulus bill passed.
Locally markets seem to be set to push higher into Christmas as we see the economy reopen more and more. Vic is likely to see another round of restrictions removed sooner rather than later with low active cases and daily cases at or near zero. Now the QLD election is out of the way many are hoping to see borders reopen.
Banks reporting this week – WBC Today, NAB Thursday 5th Nov and MQG Friday 6th Nov. CBA will give a trading update the week after.
The XJO is expected to rally on open this morning near 5970. This is likely due to positive leads from U.S futures and backed by local news of lockdowns easing in Victoria and expected local interest rate cuts tomorrow.
Technically, the market remains trading in the broad channel pattern, but with a catalyst like the U.S election, we expect this to break by the end of the year. In the short term, the next key level is 6000, which we may go on to test if things remain positive during our session today.
We are getting to crunch time, with only a few days left until we find out who the next POTUS is. Despite the U.S market giving early signs of stabilising, it is likely we continue to see volatility this week.
Locally we had Westpac report this morning and NAB and Macquarie will report later in the week.
US shares closed lower on Friday, with tech stocks leading the move down. Some of the most well known of tech stocks fell five or more percent, with many analysts stating that lower future earnings expectations were the cause. Despite the selling, US economic data continued to come in better than expectations, with personal spending, and consumer sentiment being the positive data releases from Friday. Oil & Gas and Telecoms stocks were the strongest performers on Friday, while every other major sector closed lower, with tech stocks faring the worst.
US markets are likely to remain shaky ahead of Tuesday’s Presidential election, the results of which will start to be released on Wednesday Australian time; investors will be hoping that regardless of the outcome, relief in the form of fiscal stimulus will shortly follow.