The XJO is expected to open slightly lower this morning, with futures pointing to a drop of around 10 points, and an open just above 7,900.
US shares were fairly flat overnight, they traded back-and-forth with neither buyers nor sellers managing to take control. The major recent news for the US remains the Fed meeting, which should be seen as a positive for markets.
Yesterday, Australian unemployment came in shockingly poor, with a unexpected and large number of jobs lost in February, which looks to mostly be people leaving the workforce. This could be seen as a positive for the Australian share market, as it opens the door for potential rate cuts. 3/4 of the major banks are now forecasting an RBA rate cut in May.
With recent news a little more positive for the market (but not necessarily the economy) and with a break of the short-term downtrend line, we could see a move back towards a potential resistance level, such as 8,060. However, we would expect a close resistance to hold and then a resumption of selling. This is due to further tariffs from the US on the 2nd of April – which is likely to hurt sentiment.
To the downside, 7,750 remains clear support and the bottom of our market for now.
US Markets
US shares closed mostly lower overnight, with shares trading back-and-forth throughout the session. The optimism of Powell’s comments yesterday seemed to wear off pretty quickly. Perhaps it was the overnight jobless claims data that weakened sentiment, with a rise in the number unemployed Americans claiming benefits last week. Overall though, don’t be surpsied to see a little buying in the short-term here, as in the Fed meeting, Powell was very relaxed about the risks for the market, and this is quite a bullish signal for US shares. We could see a little bit of buying over the next few sessions as a result. However, further Trump tariffs are expected on the 2nd of April, and its hard to see the market rising with that news.
Four of the eleven sector groups of the SP500 closed higher overnight, with Energy and Utilities the stongest performers. Most sectors were fairly flat and Materials saw the most selling.
Technically, the SP500 has broken below and has now fallen to the level of a technical correction (10% fall from the peak), which comes in around 5,540. It now looks to have broken the short-erm downtrend line, which it has held for the past few sessions; this would indicate a move back to the previous support at 5,800 – 5,850, which is likely to act as resistance.
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