Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Aussie Markets To Outperform?

Published 30/06/2017, 10:54 am
NDX
-
US500
-
AXJO
-
DXY
-
TIOc1
-

Originally published by CMC Markets

International markets continued to adjust for a 2018 outlook where other central banks join the Fed in gradually reducing monetary stimulus. US stocks were among the casualties with selling pressure on high PE technology stocks leading market declines that saw both the Nasdaq and S&P 500 breaking below recent chart support levels.

While the sell-off in US stocks sets an understandably negative tone for this morning’s open, there are a number of reasons suggesting the decline in our market being less severe. Bank stocks, which are a major component of the S&P/ASX 200 rallied in US markets in the belief that rising interest rates will assist profit margins. Further gains in the iron ore price and metal prices may also prevent investors being too aggressive about selling mining stocks today. Finally, fund managers will be hoping that the ASX 200 is not sold too heavily on the last day of the financial year.

With the stock market going into the final day of the financial year in a more volatile mode, today’s release of China’s manufacturing PMI could set the tone for this afternoon’s trading. It will come against a background of solid export growth last month plus recent indications of improved commodity demand.

While US stock indices broke chart support levels last night, the ASX 200 index will not do so today. In fact if today’s session remains above yesterday’s low at 5755, the short term uptrend will remain intact. This leaves open the possibility that the current up trend may yet go on to break above the recent highs at 5837.

Selling of both the US dollar and bonds in recent days makes markets vulnerable to surprises in tonight’s US consumption and Eurozone inflation data. Bond bears have been consistently thwarted by stubbornly low inflation in recent years. Consensus expectations are not suggesting a lot of encouragement for bond bears tonight with the US core PCE expected to be up only 1.4% year on year and Eurozone core CPI to be up 1%.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.