The ASX200 outperformed most global indices last week slipping less than 1% courtesy of a 2.2% rally by the Australian banks, conversely the Materials Index fell 3.4% i.e. an extremely different finish come Friday compared to Mondays opening. The SPI futures are pointing to a firm opening by the ASX today as they look poised to follow European indices higher, as opposed to the US which saw the S&P500 index slip another 1.3%.
There’s another interesting scenario looming on the horizon, a Federal Election will be held in Australia before May 21st – just when people have less money in their pockets, interest rates are set to be on the rise and COVID cases could remain stubbornly high as the cold weather sets in – a tough cocktail for Scott Morrison before we even consider his handling of the floods. Politics is a strange game where the polls have proved useless over recent years but I can see the local market start to get nervous in about 3-5 weeks’ time as that dreaded beast “uncertainty” creeps into investors’ minds, one to be mindful of moving forward.
MM is mildly bullish the ASX200 around 7100
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