Our XJO should rise slightly on open this morning, despite weak leads from the US. Yesterday we saw WBC announce a large earnings impairment but unlike the NAB, they did not announce a capital raise. The AFR this morning is reporting that bank losses could reach $35bn over the next three years which will likely be a long-term drag on that important sector of our market. We will also see an inflation read today for the first quarter of this year, but it is unlikely to be high enough to cause concern. Technically, our XJO, like US markets, is tracking roughly sideways, between resistance at 5,500 and support at 5,000 (although there may be some intermediate support at 5,200).
US stocks closed slightly lower at the end of a back-and-forth session, with more companies withdrawing earnings guidance. The Dow closed 32.23 points lower (-0.13%) and the S&P 500 was down 15.09 points (-0.52%). European markets rose strongly overnight, whilst Asian markets were a bit mixed yesterday.
US markets are currently midway through an earnings season, with plenty of large companies still to report. We will also see a Federal Reserve meeting in the US overnight, and although there will likely be no change to current settings, investors will be looking for an update on how the bond buying program is progressing. Technically, the S&P 500 index held below its resistance around 2,880 index points. The index has been channeling between that resistance and some support around 2,720. Until either of the support or resistance breaks, sideways movement looks likely.
XJO Implied Volatility fell 24.58% and closed at 24.566%. The US volatility was up and closed at 33.29%.
US oil was mixed overnight, prices remain extremely weak.
Gold dipped slightly again overnight, prices remain very strong however.
Iron ore traded lower again, prices have been declining for a week or so now.
The Aussie dollar again rose against the US and is almost back towards pre-coronavirus levels.
Our market should open slightly higher this morning, but with US markets closing lower, the AUD rising, and the banks starting to estimate their COVID-19 losses, it is unlikely we will see too much positive movement today. Still, our virus numbers remain low compared to much of the world and this means that we can probably look to reopening parts of our economy quicker than many other nations. Such a reopening is still some way off however, so until then, we are likely to continue fluctuation around current levels on the XJO.
- 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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