The XJO is expected to edge higher on open this morning following a similar move from the U.S overnight. U.S futures are flat.

Yesterday was an indecisive day, retaking intraday losses, and giving up intraday day gains to finish practically flat. For the most part we tried to rally in the morning, but it seems we don’t really want to commit either way until we see movement from the U.S.

Nothing has really changed over the past week, despite that flash in the pan. We remain cautiously sidewards to bullish.

It was a fairly quiet week for news, but next week we have plenty of macro-economic data releases both local and overseas that can shake things up. These include in order: local CPI, U.S GDP, local retail sales, Chinese manufacturing, U.S PCE, and U.S unemployment.

US Markets

US shares were mixed overnight, with the SP500 and NASDAQ closing higher on the back of strong movement in technology shares, while the DOW JONES closed lower. US shares were buoyed by a strong earnings release from Tesla, which jumped 20%. United Parcel Service (UPS) also jumped after a strong report, while IBM fell after a disappointing result. US economic data was mixed overnight, with fresh jobless claims lower than expected, while continuing jobless claims were higher. Overall the US economy and company earnings are in a fairly strong poition. However, this also suggests that interest rate cuts might not be as forthcoming moving forward.

Five of the eleven sector groups of the SP500 closed higher overnight, with Discretionary the only sector to see meaningful gains. Materials stocks saw the most selling, followed by Utilities.

Technically, the SP500 fell to the key 5,770 on Wednesday night, which was previously the all-time high resistance. That level held has so far held as support, so we will need to wait and see if the index bounces from here. Should it bounce, the recent all-time high at 5,870 is likely the resistance target to the upside. Should 5,770 support break, we could see a move back towards 5,670.

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