The XJO is expected to rally on open this morning following a small rebound in the U.S overnight. Their futures are flat this morning.
Yesterday we pulled back, forming resistance at roughly 8,325. This morning we will smash through that with an expected open at roughly 8,350. Strength is likely to come from our banks, as the financials was one of the main drivers in the U.S overnight. Considering the banks are some of the largest companies in our market, this helps explain why we are happy to open in fresh all-time highs despite the U.S falling short of theirs. Furthermore, with the U.S not extending the profit taking, they look to be in a healthy position to continue the rally. Over the past week or so, the U.S have made several new highs, but our market has only achieved one break higher. With their market showing positivity, our gains on open are perhaps also due to our index playing a bit of catchup.
We have unemployment data today at 11:30am. It is expected to remain sticky at roughly 4.2% – which is practically full employment.
US Markets
US shares closed higher again overnight, with each of the three major indices closing higher. US shares were pushed higher by strong company earnings reporting, with Morgan Stanley, Abbott Labs, and many others reporting better than expected results. There were also some clear misses overnight, though mostly from smaller companies. There was little in the way of economic data again overnight, though that will change tonight with Retail Sales data, with spending expected to remain strong for September. Regardless, the current market is all about earnings which continue to be mostly stronger than expected.
Ten of the eleven sector groups of the SP500 closed higher overnight, with Utilities the strongest performers, followed by Financials and Real Estate stocks. Staples and Communications were the only stocks to close lower on average.
Technically, the SP500 broke above the all-time high resistance level at 5,770 last week indicating further upwards movement, though its hard to say where that movement may rise to. 5,770 is now likely to act as support to the downside.
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