Momentum in markets has generally slowed down, Markets are struggling to sustain a move in either direction. Markets overall are very resilient against a second wave of the Virus, but some sectors are much stronger than others.
Looking at the SP500 there are only 169 companies that have positive share price movement in past 12 months. Most of those stocks are in the Technology and Health Care sectors. The opportunities in the market are very much sector by sector with energy and travel sectors still being the worst hit. Moving forward the weaker sectors will be good buys but timing is the key.
Buying in these sectors could easily see markets push into all time highs. But we will be waiting for news on a more certain timeline of the world reopening before we see a rush back into these sectors.
Locally with Iron Ore pushing back higher we expect the miners to continue an overall uptrend, and perhaps out preform coming into the August reporting.
With mixed leads from the U.S our market is set to have a week fall on open. The U.S last night fell back to the top of their consolidation range, much like our market did yesterday. Their futures sit slightly in the green and if they remain so during our session today, it will help keep our market buoyant on top of the 6000 support level.
Generally, our market is still range bound, and continued sideward movement is expected. With everything going on, its hard to know what is going to push our market one way or the other. Fundamental issues across the board locally and abroad, stimulus, and reporting could all have an effect, but right now it’s business as usual.
US shares fell overnight, with that Brazilian President Jair Bolsonaro had tested positive for COVID-19. It was more of a breather than anything for US stocks, who have rallied quite strongly across the past week. We did have a few Fed members come out and warn that the virus spread would cause longer lasting economic consequences for the US but by this point US shares were already at their lows.
Oil & Gas and Financials stocks were the weakest performers overnight, while Basic Materials stocks saw minor gains. US stocks now look to the Q2 2020 earnings season, which starts in earnest next week, for a stronger indication of future market direction.
- Nasdaq hits record highs as the XJO continues to stagnate - August 7, 2020
- US SP500 2% off all-time highs - August 6, 2020
- Australian market set to catch up after strong leads from the US - August 4, 2020