Sentiment in global markets remains very bullish, as market participants continue to look through soft economic fundamentals and short-term risks to focus on a vaccine lead and stimulus fuelled recovery.Though the calendar remains relatively light in the week ahead, several themes will dominate trade.
After pushing 2.4 per cent higher last week, the S&P/ASX 200 Index is looking at a small 0.1 per cent gain to start the trading week.Market sentiment was given a major boost last week, after US Democrats won both seats in the State of Georgia’s Senate run-off, handing the party control of both chambers of Congress.
It appears new government spending won’t stop there from the Biden administration either. The President-elect hinted last week that new fiscal spending under his government would likely number in the trillions – though little detail was provided about where the spending may go.Hopes for a more robust economic recovery in the United States comes as economic data out of the country paints a mixed picture.
Record highs continue to be made in global markets, with the MSCI World Index hitting a new high last week, underpinned by record highs record by the S&P500; while price action in Tesla, which surged 24.71 per cent, and Bitcoin, which climbed over 20 per cent, last week reflecting the market’s desire to keep putting cheap money to work. The reflation trade remains alive and well too.
This column was produced in commercial partnership between The Sydney Morning Herald, The Age and IG. Information is of a general nature only.