Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Tax Reform And Metals Stem The Rot

Published 21/04/2017, 10:54 am
Updated 04/08/2021, 01:15 am

Originally published by CMC Markets

The positive lead from the US profit reporting season, hopes that US tax reform might be achieved by this year after all, and a bounce in metals prices will put sellers on the back foot this morning with the S&P/ASX 200 likely to finish the week on a positive note.

US Secretary Steve Mnuchin’s comments on tax reform were well timed. They came as bond buying and US dollar selling based on the unwinding of the Trump trade appeared to be losing momentum anyway. While Mr. Mnuchin’s advice that progress has been made on tax reform will give traders reason to pause, market reaction has been guarded. Given the experience with health reform, markets are likely to wait for more tangible evidence that reform can be achieved and details of what it will entail, before becoming too confident.

The ASX 200 is likely to benefit from last night’s bounce in metal prices that should see support for mining stocks today. Last weekend’s solid data on China’s economy including ongoing credit creation and improved industrial production make it difficult to be too pessimistic about this sector.

Traders will also be watching whether a couple of yesterday’s trends can continue this morning. One will be the bargain hunting in Telco stocks with Telstra Corporation Ltd. (AX:TLS) now approaching the 38.2% Fibonacci retracement level at $4.27. The other is whether confirmation of Amazon’s expansion in Australia will lead to continued selling of retail stocks like Myer Holdings Ltd (AX:MYR) and Harvey Norman Holdings Ltd (AX:HVN). The Amazon (NASDAQ:AMZN) news has been long anticipated and it will be some time before its expanded business commences operation.

Market optimism may be somewhat curtailed by concerns over Sunday’s French election. However, given the uncertainty of the outcome markets may leave their response until after the result is known.

Latest comments

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.