The XJO is expected to open higher this morning following a rally in the U.S overnight. Their futures also sit mildly in the green.

Yesterday we pulled back to our lows from Friday’s session, roughly retesting near the key 7,000 level. This morning we should bounce back with an expected open near 7,070. 7,080 to 7,100 has been a key level both recently and historically, and it seems likely we hold it today. The U.S is whipsawing as they consolidate sidewards. Until they break one way or the other, we should largely do the same.

This week will help set the tone with RBA and Fed members talking about the future of monetary policy. Furthermore, we have local unemployment numbers and U.S retail sales as headliners. Finally, the war in Israel can escalate further.

US Markets

US shares closed firmly higher overnight, with prices rising after mostly positive company earnings releases and with the Israel Palestine situation seemingly did not worsen over the weekend. There wasn’t a whole heap of data overnight, so instead investors bought back Friday’s losses, which seem to have been driven by fears of conflicts escalating around the world. Tonight we will see the first major event for US markets this week, with US retail sales for September being reported. It is likely that the market wants to see retail sales slow, so a lower than expected growth number will likely see markets bounce, and a higher than expected number will likely send markets lower. This is due to stronger economic measurables suggesting further inflation and interest rate rises.

Every major sector of the SP500 closed higher overnight, with Discretionary, Communications, Real Estate, Financials, and Utilities all growing strongly, while most other sectors also fared well.

Technically, the SP500 has stalled at some resistance around 4,385. The index did rise back to this level overnight, but it was unable to close above it. Should the index break above 4,385, we could see a move back to 4,440. Should the index fall from here, it could head back towards recent lows around 4,220-4,240 index points.

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