Fed Soothes the Market Beast
Investors may enjoy a reprieve from the raging bears after Fed Chair Janet Yellen expertly trod the middle path between voicing market concerns and sticking to the Fed’s tightening program. Calmer commodity markets and the return of trading in Hong Kong after holidays may see less sentiment driven trading today.
Strong trading in Europe and a surge following Yellen’s pronouncements gave way to a flattening sell-off late in the US session. The sectoral performance largely reflected company reports, with IT and healthcare stocks topping the performance table.
The Australian reporting season will affect investor action today. Cochlear and property groups Mirvac and Goodman have all reported above estimates this morning, and should add support. Resources may trade cautiously given benign commodity trading overnight and the release of Rio’s full year results after market.
The return of Asia Pacific investors from holidays could also see a change in market behaviour. When concerns about global banking hit markets this week, the inability to trade most Asian markets and the lower correlation of the Japanese index saw Australian shares belted by heavy bank and index selling. As Hong Kong comes back on line mid-session traders will watch closely for any signs of rotation, with those aggressively selling local shares over the last few sessions buying Australia and selling HK.
Frequently Asked Questions about this Article…
Fed Chair Janet Yellen's balanced approach between addressing market concerns and maintaining the Fed’s tightening program helped calm the market, leading to a more stable trading environment.
Following Yellen's pronouncements, the IT and healthcare sectors topped the performance table, reflecting strong company reports in these areas.
The Australian reporting season could influence investor actions, especially with companies like Cochlear, Mirvac, and Goodman reporting above estimates, potentially adding support to the market.
The return of Asia Pacific investors from holidays could lead to changes in market behavior, as their absence previously contributed to heavy bank and index selling in Australia.
Resources may trade cautiously due to benign commodity trading overnight and the anticipation of Rio's full-year results, which could influence market sentiment.
Hong Kong's market reopening after holidays could shift trading dynamics, as traders watch for signs of rotation, potentially affecting those who were aggressively selling local shares.
Global banking concerns led to heavy selling of Australian shares, exacerbated by the inability to trade in most Asian markets and the lower correlation of the Japanese index.
Investors should watch for changes in market behavior as Asia Pacific markets reopen, the impact of company reports during the Australian reporting season, and any shifts in sector performance following Fed announcements.
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