Wall Street gains ground as dollar retreats
A weaker US dollar and lower US yields boosted Wall Street overnight, and has similar results for most regional markets today, which seem content to coattail a positive overnight Wall Street session. The S&P 500 rose 0.38%, the Nasdaq rose 0.35%, and the Dow Jones rose 0.62%.
The Nasdaq should be monitored closely at these levels. Although it touched a marginal record high overnight, it still appears to be tracing out a triple top on the charts. A failure to close well north of present levels by the week’s end ratchets up the odds that a stock market correction is near. Before I receive screeds of panicked emails, the underlying drivers of the stock market rally remain stronger than ever. Any fall will be corrective, and not the top of the market.
Asia is mostly in the green, with only Japan and Australia falling. The Nikkei 225 has declined 0.20% after the yen strengthened overnight. In Australia, record Covid-19 cases in Victoria today is sapping confidence that Australia’s recovery will not hit a pandemic wall. The ASX 200 has fallen 0.45%, and the All Ordinaries has declined by 0.65%.
Elsewhere though, the story is positive. In China, the Shanghai Composite is up 0.30%, with the CSI 300 up 0.15%. Hong Kong is 0.60% higher, with Singapore 0.70% higher. Jakarta has risen 1.30% ahead of today’s GDP data, with Kuala Lumpur having a quiet session, up just 0.20%.
Trading appears directionless across most of Asia today, with equity markets content to await the heavyweight data out of the US this evening for more direction. Despite the noise, this week has a consolidative, range-trading look about it ahead of Friday’s US Non-Farm Payrolls, as we also await progress from Washington DC on the next fiscal stimulus package. Noisy, but ultimately, directionless trading intra-day is set to continue.