Movement in the Bond calmed which led investors back into the US Tech sector. The energy was also one of the stronger gainers with Crude continuing to rebound. The US S&P500 continues to whip just below the all-time high at 4,700.
US markets continue to look a bit overbought here. At this stage, the seasonal pattern is playing out. We saw a run in the US reporting season with over 80% of companies once again beating earnings expectations. From here typically we see a pullback or some weakness late Nov early Dec which sets up for a Christmas rally. The next test will be the Debt ceiling issues.
Daily virus numbers worldwide fell back to just below 3million a week in October but are starting to climb again. Locally, Australia has now hit over the 85% second does. NSW and Vic have surpassed the 90% double dose target. QLD, SA WA, and NT are now above the 70% targets. NSW and VIC are both looking to start accepting vaccinated overseas travellers back in without a 2-week quarantine period. This is all very positive as we are slowly reopening Australia, and we will see immigration back next year, which has been one of the main drivers of our economy.
We saw a large move in the miners this week which was triggered by 4 days of strong gains in Iron Ore futures. The Iron Ore miners are still cheap at these levels even if Iron Ore remains sideways at US$100 a tonne. But be aware that the volatility in this space is likely to remain as steel production caps will remain until after the Winter Olympics in February next year.
The XJO is expected to open flat this morning, following another similar yet volatile night of trading in the U.S. U.S futures have edged into the green, which should help keep us buoyed today. As it stands, it seems we are set to continue trading sideward near 7,400 and it is becoming clearer that we will need to see the U.S break their own consolidation before we have permission to break ours.
US shares closed mostly higher overnight, with a late rally pushing the SP500 and NASDAQ indices into the green. This came on the back of mixed economic data, with US third quarter GDP slightly lower than expected, while jobless claims and goods orders were better than expected. There was also a bit of a rebound in consumer confidence across the month, though new home sales were lower for the month. Despite the overnight rise, the SP500 is still stalling at the technical resistance around 4,700, which will have to break before further gains look likely. Five of the eleven sector groups of the SP500 closed higher, with Real Estate the strongest performer, followed by Energy. Materials were the weakest sector overnight, and most sectors closed fairly flat. US markets will be closed tonight for the thanksgiving holiday.