2 October 2024
It’s been a tough start to the week for markets. Yesterday saw the ASX 200 (ASX: XJO) give up 19 points to close the day 0.26% lower, with most sectors finishing in the red.
It’s been a tough start to the week for markets. Yesterday saw the ASX 200 (ASX: XJO) give up 19 points to close the day 0.26% lower, with most sectors finishing in the red.
Tuesday’s weakness marked the second consecutive day of (admittedly small) losses for the XJO, and came despite a boost in commodity and energy prices – iron ore climbed 9.4% while barrels of West Texas Intermediate and Brent Crude oil were trading at seven and three-year highs respectively.
The banking sector took a hit after Westpac revealed it was writing off $1.3 billion, dragging its share price down 1.7%.
Drops across the market were more pronounced at the smaller end – the Small Ordinaries index (ASX: XSO) dipped 0.57% while the Emerging Companies index (ASX: XEC) fell 1.35%.
The XJO has traded out of its recent downward sloping trading channel and has chosen to move sideways for the past two days. We expect further sideways price action over the short term. The index is now sitting comfortably between its 50 and 200 DMAs (7427 & 7118), and also between its current support and resistance levels (7200 and 7340).
This morning we saw the market drop, mirroring similar action in the US overnight despite futures pointing towards modest gains. However the XJO managed to recoup those earlier losses by about 11am. It will be interesting to watch what happens this afternoon.
So how are businesses feeling as all this plays out? Optimistic – at least that’s what the latest NAB business survey is pointing towards.
The data – released yesterday – shows that while September was a tough month to run a business, most business owners are relieved to see roadmaps and reopening plans rolled out in NSW and in Victoria.
Consumers are feeling similarly enthusiastic about the future too, it would seem. Consumer confidence is at 13-week highs and credit card spending – at least through Commonwealth Bank-issued cards – was 12.6% higher last week than the same week in 2019.
With NSW celebrating Freedom Day this week and Victoria close on its heels, it’s likely some of the money workers have saved through these lockdowns will find its way back into the economy for Black Friday sales and the looming Christmas period.
It’s yet to be seen if our borders will be open to visiting dignitaries from the North Pole in time for December’s holiday season, however. Well, that’s what I’ve been telling my girls at least.
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