ASX futures point to a strong start to the week
Published 09-JUN-2020 09:22 A.M.
3 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
The S&P/ASX 200 (XJO) increased more than 4% last week, building on strong gains in the prior week, suggesting that perhaps it is ready for a period of consolidation.
However, if overseas markets are a guide we could be in for another robust week.
US markets got off to a flying start on Monday, and the Dow is only about 7% shy of its all-time closing high.
The NASDAQ’s recovery has been even more impressive with it making a new all-time high of 9927 points, a gain of more than 3000 points in 11 weeks.
The Dow has stacked on roughly 9000 points during the same period.
To put this in perspective, the Dow took more than three years to put on 9000 points to reach its all-time high of 29,568 points just prior to the onset of coronavirus.
These gains were achieved on the back of consistently solid economic data, robust company earnings growth and a relatively stable geopolitical backdrop.
There is no sign of these three key elements being in place at the moment, and it would appear that a few pieces of promising data in the way of better than expected jobs figures, a recovering oil price and evidence of resilience in the tech sector have distracted investors from the bigger picture.
Despite these inconsistencies, it would appear that the Australian market will follow suit with the ASX SPI200 up 41 points this morning to 6138 points.
While the ASX was closed yesterday, other activity in the Asia-Pacific region was positive with the Nikkei 225 gaining 314 points or 1.4% to close at 23,178 points.
The Hang Seng was flat, consolidating around the 24,770 point mark and the Shanghai Composite was only up marginally to 2937 points.
European markets finished in the red with the FTSE 100 down 0.2% to 6472 points.
The DAX shed 28 points to close at 12,819 points and the CAC 40 fell 0.4% or 22 points to close at 5175 points.
Strength in US markets was predominantly driven by travel and oil stocks with Boeing leading the way as it surged 12.2%.
The Dow climbed 461 points to close at 27,572 points, a gain of 1.7%.
The S&P 500 finished up 1.2% or 38 points at 3232 points.
The NASDAQ continued its winning ways, as we mentioned hitting an all-time high and closing at 9924 points, up 1.1%.
On the score of market equilibrium, movements in the CBOE Volatility Index were interesting as it reversed a consistent downtrend trend from more than 28 points at the start of the week to 23.6 points mid-session Friday — as the Dow surged more than 1000 points throughout the remainder of Friday and Monday, the volatility index increased by about 10% to 25.8 points.
Gold resilient, iron ore surges, zinc hits three month high
Despite the bullishness in equities markets gold has still managed to stay above US$1700 per ounce.
While the oil price trailed off on Monday afternoon, it is still holding around US$40 per barrel which is enough for most producers to be generating reasonable margins — bear in mind this is more than double where the price was less than two months ago.
The iron ore price has surged 5%, surpassing the US$105 per tonne mark, suggesting it could be a good day for companies such as RIO, BHP and FMG.
All base metals finished in the black, with nickel building on strong gains last week and zinc breaking through the US$0.92 per pound mark for the first time since February.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.