The XJO is expected to edge lower on open this morning following a fairly lackluster move in the U.S overnight which saw their market finish practically flat.
We finished marginally in the green yesterday after shedding some minor intraday gains. It looks like we rebounded once again off the underlying downtrend line, keeping us trading in the pennant.
U.S futures have moved into the red, which will likely keep our market suppressed today. The stochastic are starting to head into overbought territory, but if the market remains quiet over the easter period, we would expect it to flatten out.
Markets seem like they are taking a beat. It is likely a combination of the easter holidays, and markets waiting for the next piece of news surrounding Trump tariffs, or the broader economy. The U.S has Retail Sales numbers tonight, but that is about it. Even next week looks quiet for key macro data out of the U.S. Locally we have unemployment figures tomorrow, but we will likely be reluctant to move much without the U.S anyway.
Without knowing when Trump will deliver further information surrounding his economic policies, we should assume the market is likely to continue tracking sideward over the Easter period.
US Markets
US shares traded fairly flat overnight, with initial gains moving to slight losses. Their futures have now moved into the red. This is despite comments from the White House that Trump is open to making a trade deal with China, though it was indicated that they expected China to initiate discussions. This is perhaps the only thing that could save the US economy from a significant downturn. It seems that Trump is definitely backtracking on his tariff path, perhaps this was always the intention, or perhaps the response has been so negative that it has forced him to change his mind. Should China not come to the table, markets will likely see significant further selling. However, should a deal be made, markets will likely jump strongly, at least initially. We will need to wait for April’s data (coming out in May) to determine how much damage has been done so far, and whether the US economy will look to head towards recession. Tonight we will see US retail sales, though this data is from before the tariffs were enacted.
Four of the eleven sector groups of the SP500 closed higher overnight, with Technology the best performer. Healthcare and Discretionary saw the most selling. Every sector was relatively flat.
Technically, the SP500 has found some potential support around 5,000 and now looks like it might push back up to the downtrend line, which currently sits around 5,550. This leaves the index inside a big descending triangle, and we will need to wait for a break of the triangle for further moves to look likely.
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