Yield stocks the key to near term market direction
The potential for a temporary agreement on funding Greece’s debt is likely to see the stock market open on a firm note this morning. The extent of investor enthusiasm towards the news on Greek debt may be limited by its temporary nature and ongoing uncertainty. The next hurdle comes as soon as tomorrow when European Finance Ministers will adjudicate on the economic measures Greece is proposing. Markets have also been pretty positive leading into Friday’s announcement indicating that investors had already been willing to largely discount the risk to financial stability from the Greek situation.
Investor attitude to the large cap, yield stocks will hold the key to the near term direction of the ASX 200 index. Buying momentum has slowed recently in some of the headline yield stocks like CBA; Telstra and Transurban. Ongoing consolidation in these stocks would see the overall index struggle to push convincingly towards 6000 in the near future.
The resource sector looks set for a cautious open this morning with commodity markets generally closing last week on a soft note. Traders will be waiting on the conclusion of the New Year for more direction from the crucial Chinese market.
For further comment from Ric Spooner please call 02 8221 2137.
Frequently Asked Questions about this Article…
The temporary agreement on Greece's debt is likely to see the stock market open on a firm note. However, investor enthusiasm may be limited due to the temporary nature of the agreement and ongoing uncertainty surrounding Greece's economic measures.
Large cap yield stocks, such as CBA, Telstra, and Transurban, are crucial to the near-term direction of the ASX 200 index. Recent slowing in buying momentum for these stocks could make it difficult for the index to push convincingly towards 6000.
The resource sector is opening cautiously due to commodity markets closing on a soft note last week. Traders are waiting for more direction from the crucial Chinese market after the New Year.
Investors have largely discounted the risk to financial stability from the Greek debt situation, as markets have been positive leading into recent announcements.
Investors should keep an eye on the European Finance Ministers' adjudication on Greece's proposed economic measures, as this is the next hurdle following the temporary debt agreement.
Markets have been pretty positive leading up to recent announcements, indicating that investors were already willing to largely discount the risk to financial stability from the Greek situation.
The Chinese market is crucial for the resource sector, and traders are waiting for more direction from it after the New Year to gauge future movements.
For further commentary on the current market situation, you can contact Ric Spooner at 02 8221 2137.
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