The S&P500 last night closed just shy of the all-time high, whilst the Nasdaq pushing through into Blue skies. Most sectors closed in the green, with Real Estate and Utilities closing slightly lower. Commodities started to recover with most base metals up over one percent; Crude is holding strength at $73.00 US a barrel.
With markets back near all-time highs resistance we will need to be patient in the short term to establish the timing of a break higher. It is common to see the market whip around a bit at the end of June as people adjust their holding for the end of the financial year.
Later this week the focus will also shift back to Biden’s infrastructure bill. The White House still has not agreed with lawmakers on how to pay for such a bill. If we see progress here in the next few weeks it will help fuel a rise back into all-time highs.
The XJO is expected to open flat this morning despite strong moves in the U.S last night. Furthermore, U.S futures are flat to green. Our market’s hesitation this morning may be because of how close we are to our all-time high already. If U.S futures hold here or continue to push into the green then our market should reach there today. It may also be because the U.S intraday rebounded from the all-time high last night. Though their market looks strong, our market may want to see them push through before we commit too much more.
It seems the market is coming to terms with the inflation and interest rate story, helped by an accommodative Fed that is trying to calm market fears. At this stage, it seems markets should remain bullish, albeit with perhaps more volatility.
US shares closed higher overnight, with technology and growth stocks doing the heavy lifting this time. Indeed, the tech-heavy NASDAQ index reached its highest ever level and enjoyed its highest ever close overnight. This came as Fed Chair Jerome Powell testified in front of a congressional committee, reiterating his belief that inflation is confined to the short-term, and that expansionary monetary policy would continue to be necessary to support the economy. Economic data released overnight was also quite positive, with Existing Home Sales coming in better than expected, while US API crude inventories showed a bigger drawdown than expected. Technology and Consumer Discretionary stocks were the strongest performers overnight, while Real Estate and Utilities stocks were the only ones to close lower on average.