The XJO is expected to edge lower on open this morning despite a pullback in the U.S overnight. U.S future are flat.
The banks drove us higher yesterday, unashamedly moving back into their overbought and expensive positions. Our market felt the need to push higher, and with the miners falling short, it had to see buying in the only other sector that could get us there: the financials. The XFJ is trading at all-time high resistance and will likely pause today.
The XJO managed to break into fresh highs yesterday, and managed to hold most the gains. Employment data came in stronger than expected locally yesterday which caused an instant intraday dip. Roughly 8,400 is now the next level of resistance.
US Markets
US shares closed flat overnight after some mixed economic data. US retail sales were stronger than expected in September, which comes after stronger September unemployment and CPI data. This data points towards the economy avoiding recession, at least for now. US industrial and manufacturing data overnight was lower than expected. Shares initially traded firmly in the green, but they pulled back late to close flat. From an earnings perspective, Taiwan Semiconductors jumped strongly after reporting great numbers, as did some smaller reporting companies overnight. Bond yields pushed higher as investors reduced their bets of more interest rate cuts.
Five of the eleven sector groups of the SP500 closed higher overnight, with Energy seeing the strongest (but still modest) gains. Utilities saw the most selling. Most sectors were relatively flat.
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 thought this week it has struggled to push through 5,870, which may now be acting as resistance to the upside. Should the index fall from here, 5,770 is now likely to act as support to the downside.
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