US company reporting is ongoing, with most of the reporting companies beating their earnings expectations. While the expectations were lowered, this has given the market confidence to pay higher prices for shares. There was little in the way of major reporting on Friday, but we will see Microsoft, Johnson & Johnson, AMD, Verizon, and many other majors report tomorrow night.
Biden brings stability in the US as he signs orders to start to get the virus under control via mask-wearing and vaccine distribution. We expect this momentum to continue with more stimulus to come and further policies aimed at repairing relationships and trade agreements.
Another 1.9 billion in US COVID-19 aid is one of many things Joe Biden and his team will be pushing for in the coming months. Once again it is all about stimulus in the current market. How this plays out in the coming months will affect sentiment. A stimulus package this big will be difficult to pass the Senate even though they have a slight majority.
The XJO is expected to edge higher on open this morning following fairly flat leads from U.S futures and their session on Friday.
Our session on Friday saw us lower – not surprising following such a strong three-day push into fresh post-fall highs. Having cleared the channel, hopefully for good, we can expect the market to move higher from here, albeit gradually. We still require permission from the U.S to move though, so we will need to see them maintain their highs if not push higher.
With plenty of reports from the U.S this week, things are expected to maintain trajectory. As markets move higher though, talk of an overbought market, funded largely by hysterical growth in tech, is starting to gain chorus.
Our market is closed tomorrow for Australia Day.
US markets mostly drifted lower on Friday, with relatively small movements seen across the various US indices. US markets are trading a little cautiously just around their all-time highs with an important Federal Reserve meeting coming up on Wednesday.
Still its mostly positive stories from US markets and economic data from Friday illustrated this, with Home Sales and Manufacturing PMIs better than expected. The US markets are also in a company reporting season at the moment, with most companies beating their earnings expectations. This week we will also see negotiations from lawmakers around the proposed $1.9 trillion stimulus deal, if progress is made in this regard, we could see US shares continue higher.