IG | Aug 08, 2016 06:43AM ET
After a disappointing US Q2 GDP report, among other higher frequency data points, traders have been provided with a strong jobs report and a belief that Q3 GDP should print around 2.5%. The end result has been that the S&P 500, after consolidating since mid-July has broken out and printed a new all-time high. Today’s session will therefore be key as a new higher high and we could easily be staring at the world’s institutional equity benchmark trading above 2200. Momentum once again suggests being constructive on US equities despite many continuing to highlight that we have seen seven straight year-over-year declines in corporate earnings.
The strong lead from Wall Street should support the ASX 200, which has found good support off the 20-day moving average and judging by the various ADRs we are going to gain a tailwind of 1%+ gains in both the financial and material space. With full-year earnings front and centre this week, investors will be paying somewhat less of a focus on global developments and putting more empathises on the investment landscape for Australia corporates, with names like COH, Transurban Group (AX:TCL), Commonwealth Bank Of Australia. (AX:CBA), Fairfax Media Ltd (AX:FXJ) and Telstra Corporation Ltd. (AX:TLS) at the epi-centre. CBA will be the biggy though, given CEO Ian Narev’s views on economics, future funding trends, housing and credit demand. The commentary could have far reaching implications for the broader market given traders really want to hear how the economy is tracking from one of the key players.
All-in-all, it should be a quieter week for event risk with the markets having had time to digest central bank initiatives and commentary from the BoE, RBA, BoJ and Federal Reserve. The wash-up is risk appetite looks fairly robust, but there has been a strong correlation break down in many asset classes. The USD looks strong again against the GBP and EUR, while AUD/USD continues to hold the $0.7600 level. Gold will be eyeing the 21 July low of $1310 and a close below this low would target $1250. One for the radar.
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.