Investors contemplate soft commodity prices and solid department store sales
With little fresh macro news over the past couple of days, the share market looks set for a steady open this morning.
The ASX 200 managed to eke out a positive trading session in similar circumstances on Friday as bargain hunting in major bank stocks continued. A similar dynamic is possible today. However, last week’s steep gains may be pushing bank stocks into the territory where buyers start to become more cautious, at least temporarily.
The materials and energy sectors were a drag on the US market on Friday and we are likely to see negative sentiment towards these sectors on the local market today. The combination of weaker overnight commodity prices with a stronger Australian dollar is unlikely to motivate buying interest for resource stocks today.
The fact that both Myer and David Jones unveiled solid quarterly sales results last week is another positive sign for the consumer discretionary sector. While both results were assisted by stock clearance drives, they are consistent with the sort of grinding improvement typical of post-GFC recoveries. Some improvement in department store sales fits with recent improvements in consumer sentiment indices and solid trend growth in the job market.
Frequently Asked Questions about this Article…
The ASX 200 is expected to have a steady open, with potential for positive trading sessions similar to last Friday, driven by bargain hunting in major bank stocks.
Bank stocks have seen bargain hunting, leading to positive trading sessions. However, recent steep gains may cause buyers to become more cautious in the short term.
The sentiment towards the materials and energy sectors is currently negative, influenced by weaker overnight commodity prices and a stronger Australian dollar.
Both Myer and David Jones have reported solid quarterly sales results, aided by stock clearance drives, indicating positive signs for the consumer discretionary sector.
The improvement in department store sales is attributed to stock clearance drives and aligns with recent improvements in consumer sentiment indices and solid job market growth.
The combination of weaker commodity prices and a stronger Australian dollar is unlikely to motivate buying interest in resource stocks at the moment.
With little fresh macroeconomic news, the share market is experiencing a steady environment, with specific sectors like banks seeing bargain hunting while others like materials and energy face negative sentiment.
Improved consumer sentiment indices are consistent with the positive sales results reported by department stores like Myer and David Jones, reflecting a post-GFC recovery trend.
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