Markets rallied almost across the board with Energy and Financials leading the charge. Crude jumped again as we saw investors jumping out of safe-haven assets like Gold and Bonds to come back into equities. Markets are getting a bit euphoric, but it is still early in the cycle as this is an election year in the US.
US COVID-19 cases remain high, but markets have switched off to that for now. Vaccine news coupled with stimulus hopes and the removal of election worries is enough to keep this rally alive. Just remember that a pullback is always around the corner so be willing to take profits along the way.
Locally, our equities market is not holding back see strong gains outpacing the US in the past two weeks. Vic has no active cases and no new cases for 26 days, SA only had 2 new cases which eases the mood around COVID-19. Yesterday we saw QLD and NSW finally agree to reopen borders in December. Today we have just received news that Vic will be able to travel into Queensland as of December 1.
The XJO is expected to continue its rally this morning opening near 6700 on the back of a strong move in the U.S last night.
With the U.S rallying and pushing to all time highs, it has given the green light to our market to continue to price in our positive news.
Technically, the next key resistance is at roughly 6750, which we may go on to test today if U.S futures remain green during our session today.
This morning QLD announced they will open borders to Victoria, a further sign that Australia is moving past the corona virus and further down the path of economic recovery.
Market outlook remains positive, but with how strong markets have run recently, it is likely we see a retracement before Christmas, giving the market gas to put on a Santa rally.
US shares pushed higher again overnight, with record high closes for the Dow Jones and S&P 500. The news that President Elect Joe Biden would likely pick former Fed Chair Janet Yellen as treasury secretary was applauded by investors, who hold positive collective memories of Ms Yellen.
Transaction volumes across the large US exchanges were very strong, as money flowed back into the market. There was little in the way of major economic data overnight, other than an oil inventory read that showed a larger increase in inventories than expected; this did little to hurt surging oil prices or oil extractors however. Oil & Gas stocks were again the strongest performers, while Financials and Basic Materials stocks also surged strongly. Every other major sector closed higher to some degree.