Mixed leads mean mixed action
Predicting the outcome of share market trading today is more difficult than usual. Positive moves in European shares contrast with a flat US performance. Better growth numbers over the past week are offset by weaker durable goods and consumer numbers in the US overnight. Soft industrial commodity prices are offset by two month highs in global shares. Lower oil prices are offset by tonight’s OPEC meeting. Adding to the difficulty, the local index has reversed the previous day’s direction for all three trading days this week.
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On balance, expectations point to gains in finance and healthcare, and weakness in resource stocks. However, yesterday’s late session action, and a close at the day’s highs, suggest unsatisfied buyers who may once again ignore overnight leads. Further support for Australian shares may come from international participants eyeing a lower AUD.
Private capital expenditure data and new home sales numbers also have the potential to change the direction of sectors, and the broader market. Q3 capex is expected to fall 1.9% from the previous quarter’s 1.1% gain. This gloomy consensus is in line with resource share prices that seem predicated on further falls in underlying commodities, and forecasts that OPEC will not reach agreement on production cuts. The glass half full stance may means risk in the market today is on the up side.
In individual shares, Medibank Private remains the main game, with concerns that trading today may see lower prices than the $2.08 low touched yesterday.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.
Frequently Asked Questions about this Article…
Today's share market prediction is challenging due to mixed signals. Positive moves in European shares contrast with a flat US performance, and better growth numbers are offset by weaker US consumer data. Additionally, fluctuating commodity prices and an upcoming OPEC meeting add to the uncertainty.
In the current market environment, expectations point to gains in finance and healthcare sectors. However, resource stocks may experience weakness due to ongoing concerns about commodity prices and potential OPEC decisions.
International participants may provide support for Australian shares, particularly if they are attracted by a lower Australian dollar (AUD). This could lead to increased investment and potentially bolster the market.
Private capital expenditure data could significantly influence market direction. A predicted fall of 1.9% in Q3 capex, following a 1.1% gain in the previous quarter, aligns with concerns about resource share prices and could affect investor sentiment.
Resource stocks are expected to show weakness due to predictions of further declines in underlying commodity prices and skepticism about OPEC reaching an agreement on production cuts. These factors contribute to a cautious outlook for the sector.
Medibank Private is a focal point in today's trading, with concerns that its share price may drop below the $2.08 low reached yesterday. Investors are closely watching its performance for any signs of recovery or further decline.
New home sales numbers can impact the market by influencing investor perceptions of economic health and consumer confidence. Positive sales data might boost market sentiment, while disappointing figures could contribute to a more cautious outlook.
The 'glass half full' stance suggests that despite the challenges, there is potential for market risk to be on the upside. This optimistic view considers the possibility of gains despite mixed signals and uncertainties in the market.
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