Futures closing high sparks market optimism
THERE’S slight optimism that Australian shares will have a positive start today after the Futures market ended with a small gain over the weekend.
CommSec chief economist Craig James said the “amazing” turnaround in the US markets on Friday when the Dow Jones Industrial Average rose 1985 points, or 9.4 per cent and the Futures also finished higher augured well for today’s opening.
“The only guidance we do have is the Futures market,” he said.
“We saw an amazing turnaround in the Dow Jones, similar to our market, on Friday, which closed considerably higher and the Futures is pointing to a gain of 61 points or
1.1 per cent for the start of trade.”
He said US President Donald Trump declaring a national emergency late last week over the fast-spreading coronavirus had a positive impact on the share market.
However, investors would react more positively if the number of people contracting coronavirus stabilised or even better started to decline, according to Mr James.
“It is a very fluid situation,” he said. “What investors want to see is a stabilisation of the COVID-19 active cases globally, but if we saw a stabilisation in Australia that would certainly be encouraging for our local market.”
Besides the share market being volatile because of the coronavirus crisis, the Aussie dollar is at lows not seen for more than 11 years.
He said another federal government stimulus package cannot be ruled out.
“Australian dollar is down to 61.8 cents which is going to support the export sector. It’s the lowest we have seen since the Global Financial Crisis,” he said.
“To a large extent investors are reassured by the actions out leaders are making here in Australia, both the federal and our state governments in consultation with other health professionals.
“It doesn’t mean to say there is not going to be another stimulus payment in coming weeks.”