Extended Rally In US Markets Continues

Stock Markets

Australian shares are poised to open higher today as US indices continued their rally yesterday, with the Dow Jones, Nasdaq100, and S&P500 all closing in the green. Nine of the eleven major sectors comprising the S&P500 ended Monday’s session in positive territory, with the consumer discretionary, energy and information technology sectors closing with the highest percentage gains. The primary cause of this extended rally in the US indices is attributed to a rebound in the price of oil and hopes that US/China trade talks this week will lead to a truce between the two powerhouse economies.

Fiat Currencies

The USD Index fell during the week and in doing so it broke the uptrend that has been in place since early 2018. However, it could always consolidate for a while and then go on to form a shallower uptrend. The AUD had a hugely volatile week. Driven by US/China trade optimism, the AUD (against the USD) has extended its rally in the wake of last week’s flash crash which saw it drop to as low as 67.43¢ on Thursday and is currently 71.48¢.

Hard Currencies

Last week gold hit a new rally high of US$1,300 before pulling back to close -0.63% at US$1,286.65 on Friday. Despite closing in the red last week, it has managed to continue its uptrend closing at US$1,290 on Monday; and is expected to continue along this uptrend to retest recent highs.

Commodities

Crude oil prices have benefited from OPEC production cuts and steadying equities markets, and are currently up 1.6% having rebounded approximately $3.30 over the last week; reaching a daily high of US$49.79 a barrel (+1.8%).  Despite this rebound, the steep downtrend still remains intact for now.


This article was written by Mithun Fernando - Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633. 

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