Australian shares are poised to a mixed opening on Friday, as Wall Street’s main indexes managed to eke out a small positive rise towards the close and are now within 1% of their record closing highs.
The ASX futures ended down -12 points or -0.2%, at 7,281, while our local currency, the Australian dollar, is currently buying US$0.7380 (as of writing).
All three major U.S. stock indexes extended the market’s bullish streak into a third day after dropping sharply on Monday on fears that the spread of the COVID Delta variant could force countries to lock down their economies again.
At the finishing bell, on the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial rose +25.35 points, or +0.07%, to 34,823.35.
The broad-based Standard & Poor’s 500 Index finished the session +8.79 points higher, or +0.20%, to end at 4,367.48.
The technology-focused Nasdaq Composite Index advanced +52.6 points, or +0.36%, to 14,684.60.
All three indexes remain close to the all-time highs they set early last week.
U.S. banks, energy companies and industrial stocks weighed on the U.S. benchmark index, though solid gains by Apple, Microsoft and other big technology stocks helped nudge the index up.
Trading was mostly muted as investors reviewed the latest corporate earnings and a surprise increase in the number of Americans filing for unemployment benefits.
The U.S. Labor Department reported that unemployment claims rose last week to 419,000, the most in two months and more than economists expected, after missing the 350,000 forecasts, with the previous weekly release at 368,000.
In other news, Star Entertainment Group has withdrawn its $12bn merger proposal with rival Crown Resorts after counsel assisting the Victorian royal commission into Crown recommended it should be found unsuitable to operate its Melbourne Casino.
In a statement, Star Entertainment Group pointed to the material uncertainty created by this recommendation and the limited engagement from the Crown Resorts board on the May offer.
“To date, The Star has had limited engagement with Crown on its proposal,” it said.
On the COVID front, Victoria has recorded 14 new locals’ cases, at least three of which were infectious in the community.
The Health Department said one case had yet to be interviewed while 10 were isolating.
All cases are linked to current outbreaks.
Elsewhere, there are concerns coronavirus could be circulating unchecked in northern NSW.
Last night, state health authorities revealed COVID-19 fragments had been detected in sewage from the Byron Bay area.
The sewage plant where the fragments were detected services around 19,000 people in Byron Bay and the surrounding Wategos, Suffolk Park, Sunrise and Broken Head regions.
“There are no known cases in this area, which is of great concern,” NSW Health said in a statement.
Viewing the S&P/ASX 200 (XJO) daily chart, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator has rebounded into positive territory after breaking above the 50-midway point while the Moving Average Convergence Divergence (MACD) holds a negative signal.
The Average Directional Movement Index (ADX) trend indicator decline suggests the presence of a trading market and the absence of a trend.
Developed by J. Welles Wilder, the Relative Strength Index (RSI) is an extremely popular momentum indicator (oscillator) that measures price movements’ speed and change.
RSI oscillates between zero and 100.
According to Wilder (depending on the period setting), the RSI is considered overbought when above 70 and oversold when below 30.
Signals can also be generated by looking for divergences, failure swings and centreline crossovers.
RSI can also be used to identify the general trend.
Gerald Appel developed the (MACD) technical indicator back in 1979, while in 1986, Thomas Aspray added the histogram.
The MACD is a tool used to identify moving averages that indicate a new trend, whether bullish or bearish.
(MACD) plots the distance between moving averages and helps traders identify trend direction and whether the bullish or bearish momentum in the price strengthens or weakens.
Since the rebound, the bulls have cheered after Thursday’s new record close.
However, we should tread carefully at these fresh highs, as the technical assessment remains mixed.
The short-term resistance is viewed at 7,405-15 with 7,460 seen above, while the support holds from 7,350 minor, with 7,310 located beneath.
Daily outlook on the benchmark S&P/ASX 200
The Australian share market booked solid gains on Thursday, building on a Wall Street’s rally that followed the session to end on a bullish cheer after posting a new record close, boosted by Energy, Materials and Industrials and Financials, while Health Care slipped into the red.
At the closing bell, the benchmark S&P/ASX 200 index rose +77.7 points, or +1.06%, to 7,386.4, while the All Ordinaries added +78.0 points, or +1.03%, to 7,658.9.
The Energy sector was the star performer with Woodside Petroleum surging +3.2% to $22.58, while Oil Search ended up +0.99%, to $4.08, Santos climbed +2.59%, to $6.74, Beach Energy ended up +4.96, to $1.27, and Worley rose +2.53%, to $11.35.
Materials came in second, with BHP Group leading the titans higher after climbing +3.13%, to $51.45, while Rio Tinto rose +1.22% to $127.41, while Fortescue Metals Group reversed and slid -0.4%, to $25.19.
Gold stocks also shined, with Newcrest Mining rising +0.42% to $26.18, Northern Star Resources rose +5.39% to $10.76, and Evolution Mining Ltd ended flat at $4.07.
Technology stocks slipped with Buy-now-pay-later giant Afterpay tumbling -0.35%, to $105.84, accounting software provider Xero dropped -0.39%, to $139.56, Altium fell -0.64%, to $32.60, Megaport added +0.06%, to $15.80, NEXTDC rose +1.04%, to $12.67, and EML ended flat at $3.87.
Zip Co. shares fell -7.8%, to $6.99 despite the buy now pay later company reporting revenue doubled over the June quarter, driven by surging growth in the United States.
Orocobre added +9.9%, to $7.65, Pilbara Minerals advanced +10.1%, to $1.69, Lynas Rare Earths climbed +9%, to $6.41, Iluka Resources firmed +7.2%, to $9.33 and IGO ended +4.3%, higher at $8.74.
The Financial sector strengthened with Commonwealth Bank leading the “Fab Four” (banks) higher after settling at a +1.48% gain to $99.88, while Australia and New Zealand Banking Group ended up +1.27%, to $28.00, National Australia Bank added +1.17%, to $26.04, Westpac Banking Corp rose +0.69%, to $24.93 and Macquarie Group gained +1.48% and settled at $157.47.
Health Care slipped into the red with Biotechnology giant CSL falling -0.31% to $289.24, while ResMed rose +0.12%, to $34.80, Fisher & Paykel Healthcare tumbled -0.8%, to $29.85, and Cochlear rose +0.07%, to $244.60.
Supermarket giants Coles and Woolworths were firmer as Coles rose +0.64% to $17.39, while its rival Woolworths added +0.62% to $39.17, while Endeavour slid -0.46% to $6.43.
E-commerce group Kogan tumbled +3.11% and settled at $11.20, while Seek fell -1.01% to $30.38.
Meanwhile, JB Hi-Fi rose +0.04% to $49.52, while Telstra added +1.34% to $3.78, while Wesfarmers advanced +0.23%, to $61.42, Aristocrat Leisure added +0.85%, to $41.54 and QBE Insurance rose +1.42% to $10.73.
Travel stocks were firmer with Sydney Airport adding +0.52%, to $7.79, Corporate Travel Management rose +4.87%, to $21.10, Flight Centre added +3.58%, to $15.03, and Webjet rose +3.16% to $4.90.