Investors face a range of competing influences heading into this morning's market open
On the positive side, local markets may take some comfort from the relative indifference, their international peers appear to be displaying towards the rising potential for a Greek debt default. Given the large range of possible outcomes on Greece, markets appear to have decided that the best course of action is to wait and see what actually transpires before reacting.
The situation for traders is also clouded by the Fed announcement which will come early tomorrow morning. Like the Greek situation, this carries two way risks. There is upside potential for stock markets if the Fed is able to focus attention on what happens after the first rate hike with assurances that it will remain very cautious about the pace of monetary tightening once it gets underway.
Recent support for banks may be another positive for today’s market. Warren Buffet’s announcement that he is likely to build a stake in four or five Australian companies over coming years may encourage a more positive view on the Australian market among his many followers. However, Mr. Buffet will no doubt be seeking to build his holdings at value and into periods of weakness.
This morning’s announcement by Woolworths that it has again reduced guidance for the current financial year will disappoint markets. This is a reminder that the current low growth environment provides little cover for companies with strategic weaknesses or those that fall behind the competition. While the planned appointment of a new CEO makes Woolworths a potential turn around stock, this may be some time off yet and investors may prefer to wait for news of who will be sitting in this hot seat before thinking in terms of turn around potential.
Weaker commodity prices overnight mean that the materials sector may not make any significant contribution to any overall gains in the ASX 200 index today.
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Frequently Asked Questions about this Article…
Local markets may find some comfort in the fact that international peers are showing relative indifference to the potential Greek debt default. The markets seem to be adopting a 'wait and see' approach, choosing to react only once the situation becomes clearer.
The Fed announcement carries two-way risks. There is potential upside for stock markets if the Fed focuses on post-rate hike scenarios, providing assurances that it will be cautious about the pace of monetary tightening once it begins.
Warren Buffet's announcement of his intention to build stakes in several Australian companies could encourage a more positive view of the Australian market among investors. However, Buffet is likely to seek value and invest during periods of market weakness.
Woolworths' announcement of reduced financial guidance for the current year is likely to disappoint markets. It highlights the challenges companies face in a low-growth environment, especially those with strategic weaknesses.
While the planned appointment of a new CEO at Woolworths suggests potential for a turnaround, investors may prefer to wait for the announcement of the new CEO before considering its turnaround potential.
Weaker commodity prices overnight suggest that the materials sector may not significantly contribute to any overall gains in the ASX 200 index today.
Recent support for banks is seen as a positive factor for today's market, potentially contributing to a more optimistic outlook among investors.
Investors can stay informed about market commentary by contacting CMC Markets directly at 02 8221 2137 for further insights and updates.
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