The Australian SPI futures closed 3 points lower, indicating the market is likely to open lower.
On Friday the XJO closed above potential resistance at the 6,750 – 6,775 level, which should see the XJO continue higher towards the all-time high level at 6,875, which should be the next resistance. However, with the futures down today, we may tick back to hold the 6,775 as support. If we fall through 6,775, the next level of support is around the 100 and 50-day moving averages at 6,650-6,630, after that the next target to the downside would be around the longer-term uptrend line at 6,550.
GrainCorp Ltd (GNC)was up +11.5%, following the news that Australian Competition & Consumer Commission (ACCC) will not oppose ANZ Terminals Pty’s proposed acquisition of GrainCorp Bulk Liquid Terminals. Link Administration Holdings Ltd (LNK) was up +4.5%, after the Company reported FY20 operating Ebitda from continuing business (excluding CPCS and LMS South Africa) is expected to be stronger in 2H, and overall, broadly in-line with FY19. Management anticipates global transformation to deliver A$50m of annualized savings by end of FY22. G8 Education Ltd (GEM) was down further -6.6%, after a broker downgraded the price target on the stock to A$2.2 from A$2.5.
US markets pushed higher again and closed at fresh record levels on Friday. The Dow closed 222.93 points higher (0.80%) and the S&P 500 was up 23.83 points (0.77%). European and Asian markets were also higher.
The fresh rally in US shares came largely on the back of rising hopes for the signing of the ‘phase one’ trade deal. Technically, the S&P 500 broke through the level that it had stalled at for the past week or so, pushing through potential resistance at 3,100. Once again there are no further levels of resistance for the S&P500, so it is hard to say where it might stall. If the S&P 500 falls from here, there are potential levels of support at 3,050, followed by 3,020. If those levels break, 3000 is the next key level, if that goes we could start to see the index downtrend.
XJO Implied Volatility fell 1.67% and closed at 10.795%. The US volatility was up 0.38% and closed at 13.05%.
Crude broke higher on trade optimism.
Gold closed slightly lower.
Iron ore jumped strongly with hopes for a resolution to the trade war.
The Aussie dollar pushed slightly higher.
Today’s trading: In Australia, minutes from RBA’s November policy meeting to be published.
Trade optimism pushed things higher on Friday, but that wasn’t enough for our futures market to close higher. It looks likely that we will tread water, as optimism around trade and poor economic data offset each other. Commodities stocks should push higher with higher prices and a lower AUD, which means the weakness could possibly come from the banks. There is not a whole lot of economic data coming out domestically this week, so we will likely follow overseas market movements and news this week.
- US shares fall on hawkish FED comments, XJO to reverse yesterday’s gains - April 5, 2024
- SP500 flat at 5,000, XJO to open flat - February 9, 2024
- Industry mail says interest rate cuts will be the flavour of 2024 with ASX to resume bullish momentum - January 5, 2024
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