The Australian share market is poised to edge higher at the open as the S&P 500 hits another record high on Thursday.
Treasury yields slide following a softer-than-anticipated labour market data that support a lift in technology and other growth stocks.
The ASX futures eked out a +2 points rise to 6,961, with our local currency, the Australian dollar is currently buying US$0.7654 (as of writing).
The S&P 500 on Wall Street saw its second straight record close on Thursday, helped by gains in tech-related stocks as weaker-than-expected jobless claims data bolstered the Federal Reserve’s stance to keep interest rates lower for a longer period.
The U.S. job market remains challenging after the government reported that initial claims for state unemployment benefits rose last week.
The number of Americans applying for unemployment benefits rose +2.2% to 744,000 last week, signalling that many employers are still cutting jobs even as more people are vaccinated against COVID-19.
At the finishing bell, on the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial rose +57.31 points, or +0.17%, to 33,446.26.
The broad-based Standard & Poor’s 500 Index rose +17.22 points, or +0.42%, to 4,097.17, its 19th record close of 2021.
Meanwhile, the rich-tech Nasdaq Composite surged +140.47 points, or +1.03%, to 13,829.31.
The gains have also sent the tech-heavy Nasdaq to a seven-week high and within +2% of its February 12 record closing high.
Tesla Inc gained +2.02% on the Joe Biden administration’s $174 billion proposals to boost electric vehicles.
Viewing the technical standpoint for the S&P/ASX 200 (XJO), the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is currently in overbought territory, while the Moving Average Convergence Divergence (MACD) positive signal has strengthened.
The Average Directional Movement Index (ADX) trend indicator has restored the bullish bias (signal).
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 is strengthening or weakening.
Viewing the (XJO) technical aspects, the extension beyond the 6,980 is showing signs of a struggle which in terms could soon see a modest decline, with the near-term cap at 7,045.
Reassess from there, as the February 2020 all-time highs are viewed above at 7,197.20.
The support located at 6,910-15. Reassess from there.
Daily outlook on the benchmark S&P/ASX 200
The Australian sharemarket powered to a fresh 13-month high on Thursday after posting a five-day bullish streak, with the ASX 200 index just a stone’s throw (away) from pre-COVID record levels and an all-time high at 7,197.20.
At the closing bell, the benchmark S&P/ASX 200 index climbed +70.8 points, or +1.02%, to 6,998.8, while the All Ordinaries advanced +72.9 points, or +1.02%, to 7,250.3, and within arm’s reach of its all-time peak of 7289.7 points.
The S&P/ASX 200 index hit a post-pandemic high of 7,012.4 points on Thursday, a level last recorded on February 24 and has now chalked up a +3.8% in the past five days.
Meanwhile, breaking news that Blood clots have sparked an overhaul of the AstraZeneca vaccine rollout.
Prime Minister Scott Morrison has announced urgent changes to the vaccine rollout on Thursday after European health authorities warned of the risk of rare but serious side effects from the drug after experts said the AstraZeneca drug was not advisable for people younger than 50 because of fears of blood clots.
Meanwhile, all sectors ended in the green, with Materials booking a +1.83% gain, with BHP Group lifting the titans higher after climbing +2.57% to $47.06, while Fortescue Metals Group rose +2.54% to $21.00 and Rio Tinto Limited gained +2.15%, to $115.88.
Gold miners continued to shine, with Newcrest Mining adding +1.97%, to $26.42, Northern Star Resources rose +1.22%, to $10.78, and Evolution Mining Ltd added +2.05%, to $4.47.
As for our oil and gas producers, Woodside Petroleum rose +0.29%, to $24.46, while Oil Search rose +0.24%, to $4.13, Origin Energy added +0.42%, to $4.77, Santos lost -0.28%, to $7.14, and Worley ended to a -1.47% loss of $10.75.
Telstra finished +1.18% higher at $3.43, while Woolworths rose +1.02%, to $41.76, Wesfarmers added +0.71%, to $53.91, QBE Insurance added +2.16%, to $9.93, and Aristocrat Leisure rose +2.34%, to $36.79.
The Financial sector was firmer, with Westpac Banking Corp leading the “Fab Four” (banks) higher by +1.29%, to $25.16, while National Australia Bank added +1.1%, to $26.63, Australia and New Zealand Banking Group gained +1.05%, to $28.74, Commonwealth Bank advanced +0.68%, to $87.12 and Macquarie Group rose +1.27% and settled at $153.61.
Buy-now-pay-later giant Afterpay put on +1.29%, to $120.01, accounting software provider Xero added +0.78%, $136.83, and EML Payments rally continued to a +5.72% gain and settled at $5.73 after yesterday’s announcement it had inked a deal to buy European fintech enabler Sentinel.
Among travel stocks, Flight Centre lost -0.05%, to $18.93, Corporate Travel Management fell -0.41%, to $19.34, and Webjet dropped -0.89%, to $5.54, and Qantas rose +0.37, to close at $5.42.
Real estate shares remained firm, with Charter Hall rising +0.91%, to $13.30, Lendlease rose +0.07%, to $13.35, and Stockland rose +1.55% to $4.60.