US markets managed to switch back into bullish gear this week but the move overnight into all-time highs lacked any momentum. But that could change as we come into a 2-day virtual meeting with Central Bankers.
Energy stock where the larger of the gainers last night as Crude continued to gain jumping 3% to 67.66. Copper and other base metals continued to climb. Iron Ore gave back around jumped 6.8% to finish at $US145.13 a tonne. Miners in their ADR’s where up again so watch BHP, RIO and FMG for bullish signals today. There is likely to be an opportunity in the miners as they very over sold at these levels.
This week investors will be eyeing off a few important events. First off, the Fed officials along with other world central banks will meet virtually for their annual symposium. This is normally held at Jackson Hole but will be held virtually on Thursday and Friday. Investors are looking for any hints on Bond Tapering.
The Delta strain continues to see daily cases increase around the world. Daily cases worldwide have been up-trending since early July and are not showing any signs of slowing. This is going to continue to weigh on sentiment overall. The silver lining in this wave is that Vaccinated countries are showing fewer deaths than previously. This is light at the end of the tunnel, with many countries now talking about lighter lockdowns and more freedom of movement.
Domestically, it seems things are getting out of control despite hard lockdowns. The conversation is now on Vaccinations, more than ever so we can look to go to softer lockdowns to keep the virus under control. NSW are talking about starting to taper lockdown restrictions as soon as next month if they can hit vaccination targets.
Australian Outlook
The XJO is expected to edge higher this morning following a similar move from the U.S last night. Asian and U.S futures are also flat. Our market has struggled to make gains the past week or so, giving them up intraday to sit fairly flat by close. We are holding 7,500, which is proving to be a sticking point for our market. It is reasonable to expect our market to rally if the U.S can push through their all-time highs. For that to happen though, we would likely need to see a rally in either the banks or the materials, which are the two largest sectors of our market. The banks aren’t typical strong movers but have been favoured recently. The materials on the hand had done the most the heavy lifting since the Covid crash last year. Recently though they have crashed about 13% the past few weeks, led by a slump in commodity prices, a crash in iron ore prices, and fateful report from BHP. Until faith returns here, our market may struggle to keep up with the Americans.
Our local and federal governments are targeting an 80% herd immunity by the end of the year. Victoria just widened the age bracket for the Pfizer vaccine, which has caused the corresponding government website to crash this morning. This is a small positive sign that there is an eagerness to be vaccinated by the summer holidays.
US Market
US shares pushed higher again overnight, with the S&P 500 and NASDAQ indices reaching their highest ever closes. US shares have been rising with a belief that the Fed will push out their interest rate rises and other tightening due to the delta strain and weakening economic fundamentals. We will get an update on US monetary policy when Fed Chair Jerome Powell speaks during the bank’s Jackson Hole Policy Symposium on Thursday night. In US economic data, there were slightly more new home sales than expected for July. Six of the eleven S&P 500 sector groups rose overnight, with Energy stocks faring the best, while Financials, Consumer Discretionary, and Materials stocks also rose a notable degree. Real Estate and Consumer Staples stocks fared the worst.
Want to learn how to trade?
The team at TradersCircle/Emerald Financial have release a free online stock market education course, click here to enrol and get started.
- US shares tumble as bond yields soar, XJO to drop - February 22, 2023
- US market drops with hawkish Fed comments - February 17, 2023
- US market grinds higher, XJO to follow - February 16, 2023
Leave a Comment
You must be logged in to post a comment.