The XJO is expected to edge higher on open this morning following a similar move from the U.S overnight. Their futures are also marginally in the green.
Yesterday we pulled back to our uptrend line but bounced off it intraday to finish almost flat. U.S futures, which were red for the morning sessions, managed to turn around, helping our market buy up intraday losses. Ultimately though, markets are largely tracking sideward.
Buyer fatigue has settled into the U.S, where as our market is going through a spat of volatility as out two largest sectors, the materials and financials, push and pull against each other. We are largely keeping pace with the U.S, albeit with largely swings.
Markets seem likely to remain sidewards, at least until U.S jobs data tomorrow night. Now that they have seen their rate cut, their market is unsure of what to do next, but will continue to be hinged on key macro-economic data. And of course, we will likely follow whatever they do in general.
US Markets
US shares closed fairly flat overnight, with little change across the three major indices. Shares have shrugged off a lot of negative US news recently, seemingly not reacting to the recent devastating hurricane helene, nor reacting to the port worker strike. It seems more than anything, US shares are waiting to see how the next series of data comes out, and first upcoming reading here will be the US jobs report on Friday. Hopes will be high however after a jobs report overnight showed more jobs were created than expected in September, which does bode well for the full unemployment report. US company earnings reporting will also start next week, which could also be a flash point for prices. In general, prices relative to earnings this season are expected to be some of the highest ever – and this is largely due to an expectations that earnings will grow strongly across the next year, therefore the movements this season will be all about forward guidance.
Four of the eleven sector groups of the SP500 closed higher overnight, with Energy stocks the strongest performers, followed by Technology shares. Most other sectors closed lower, with Staples and Discretionary the worst performers.
Technically, the SP500 has stalled out at potential resistance around 5,770 earlier this week, which would would have to break for further gains to look likely. Overnight the index may have found some support at the previous all-time high around 5,670, which would have to break for further selling to look likely.
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