The ASX 200 index looks likely to break into new high ground for the year as investor confidence returns and markets put concerns over the US Government’s healthcare failure behind them.
Probably the main driver of the current rally is that reaction to the Trump healthcare failure was far more muted than many expected. This has seen money coming back into equities as investors became comfortable that a large sell-off was not about to unfold.
The end of the Trumpcare correction coincided with release of exceptionally strong US consumer confidence data helping to boost markets last night. While it’s possible that US consumer confidence may be tempered a little next month following the Government’s failure to achieve its healthcare reforms, the latest figure indicates a high base for confidence which should help support consumption and US economic growth over coming months
While the US markets set a positive lead last night, traders will be aware that our market pre-empted this with strong gains yesterday. For technical traders, the key question for today will be whether the ASX 200 index can get convincingly clear of established resistance around 5833. If the index only nudges past this level, it will leave open the possibility of a false break and a retreat into the trading range that has held the ASX 200 so far this year.
Insurance companies with exposure to the domestic market like QBE, IAG and Suncorp will be a focus today as the job of assessing the extent of the damage wrought by Cyclone Debbie gets underway
Yesterday’s bounce in commodity prices has seen the Aussie Dollar recover in a move that could be extended if iron ore prices stabilise around current levels for a while.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.