All three major market indices reversed early selling to close into a fresh all-time high. This time led by Energy stocks. Communication services and Discretionary stocks also saw reasonable gains. Tesla beat earnings expectations by 55% with their share price rising 2.21% and a further 1.06% in after-hours trading. It was a strong night of reporting, with most companies strongly beating expectations. This shows that supply chain issues are not affecting the profitability of these companies as much as many analysts had priced in.
This week is a big week, with around 165 of the S&P500 companies reporting, with many of the big names in the Tech and Communication services sectors. Including Apple, Microsoft, Google, AMD, Facebook, and Amazon, just to name a few.
There is a slew of economic data – One of the most important being the FED meeting which finishes Thursday morning. Tuesday US home sales, Thursday US GDP, Friday PCE Price Index – another indicator of inflation. Then locally we have CPI on Wednesday and PPI on Friday – which is also an inflation reading.
Bidens Infrastructure Package is also making some progress, with many hoping that it will go to a Senate vote this week. If the 1.2 trillion infrastructure plan continues to gain momentum markets will Material and Industrial stocks will continue to do well.
All the above really could shake the mood of the markets one way or another. At this stage, it seems the market shook out the bears earlier last week, with the Bulls now back in control. But it is amazing what a couple of days can do to the mood of investors especially around FED announcements.
Australian Outlook
The XJO is expected to edge higher on open this morning, re-testing the all-time highs around 7,400. We were promised similar gains yesterday morning, but by close our hopes had been dashed caused by large falls in both Chinese markets and U.S futures. Despite what their futures were indicating, the U.S reversed early trading losses to finish in the green, setting another all-time high. Hopefully we don’t see another repeat of yesterday and manage to hold our opening gains.
US Markets
US shares closed higher overnight, defying negative leads from Asia as stocks again climbed to record high levels. It was again the strong earnings that powered markets higher, this time with Tesla reporting better than expected, though they were joined by other large well reporting companies. Economic data was sparse, with US home sales numbers coming in lower than expected. Regardless, the record levels of stimulus and record company earnings are helping US markets to continue to fresh all-time highs. Healthcare stocks were the weakest performers overnight, while Energy, Materials, and Consumer Discretionary stocks fared the best overnight.
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