Bullish sentiment returns on the back of positive earnings report from JPMorgan Chase

Stock Markets

Australian shares are poised to open flat today despite a firm session on Wall Street following Friday's release of a positive first-quarter earnings report from JPMorgan Chase which exceeded analysts' forecasts. The report acted to lift market confidence as JPMorgan Chase's CEO Jamie Dimon ruled out the possibility of a US recession before 2022 and declared that US growth could continue for years. The comments from Mr Dimon largely quelled fears of a potential US recession induced by the recent inversion of the US bond yield curve. JPMorgan Chase shares rose 4.7% on Friday after the largest US bank's reported that its' first-quarter profits rose faster than expected, as the bank was able to overcome a slump in bond-trading and stock-trading by using a lower-than-expected tax rate, and by employing expense controls. US consumer sentiment fell in April for the first time in three months. The University of Michigan's preliminary sentiment index dropped to 96.9 from the prior month's 98.4. The median estimate of economists was 98.2. 

Wall Street's major indexes closed in positive territory overnight, bolstered by renewed market confidence on the back of a better than expected earnings report from JPMorgan Chase.  The Dow Jones, NASDAQ 100 and S&P 500 closed up 269.25 (+1.03%), 19.09 (+0.66%), and 36.81 (+0.46%) points respectively.  

The benchmark S&P/ASX200 index closed 70 points (+1.1%) higher on Friday, as the equity market responded favourably to the European Central Bank and US Federal Reserve maintaining its patient stance on policy.

ASX 200 futures are currently flat at 6236.

Today's data releases: UK April House Prices; US February Total Net TIC flows, US April NY Empire Manufacturing

Commodities and Currencies

Brent and WTI crude prices retraced overnight following an extended rally and are currently sitting at US$71.33 (-0.31%) and US$63.58 (-0.49%). From a technical perspective, a pullback and consolidation in oil prices would be healthy as the rally in prices appears to be over-extended.

Iron ore prices are up 0.9% at US$96.47 per tonne bolstered by bullish developments in iron ore fines which have enabled iron ore prices to push through its recent highs.

The spot price of gold is currently down 0.12% at US$1291.04.

The AUD is currently marginally down 0.01% at US71.74¢.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.