This column assumes that ETFs are the primary investment tool for the reader.

Please see my weekly market summation for a review of the macro-economic environment and general macro-level market trends.

Investment thesis: the macro-averages are now in a bullish posture; it’s a good time to take a new position. But be careful; defensive sectors are starting to rise, indicating traders are a bit more cautious.

Let’s start by looking at last week’s market activity, beginning with the treasury market:

TLT 5-day

The treasury market moved lower on Monday and then traded sideways for the rest of the week. Volatility was higher on late Tuesday and Wednesday as the market digested the whipsaw activity regarding additional fiscal measures. Also note the sharp sell-off and subsequent rally on Friday, likely due to additional fiscal talk.

SPY 5-day

SPY trended higher for the entire week as shown by the central tendency line in blue. t took the index an entire day to recover from Tuesday’s sell-off, but it did recover.

IWM 5-minute

I noted in my weekly round-up that smaller-caps led the market higher this week. Notice that IWM had a very strong move higher earlier in the week. This explains why small caps did so well last week.

Let’s pull the lens back to the 2-week time frame:

IEF 2-week

During the last two weeks, the treasury market has clearly trended lower, as shown by the 200-minute EMA (in magenta). The ETF has gapped lower twice and then consolidated sideways.

QQQ 2-week

While larger caps are higher, their respective charts are messier. QQQ – which has led the markets higher for most of the post-lockdown rally – is struggling. It’s also been prone to sharper, higher-volume sell-offs.

IJH 2-week

In contrast, smaller caps have stronger charts. Mid-caps have a solid uptrend

(Bloomberg) — Indian stocks rose after the central bank signaled more policy easing ahead and announced a slew of liquidity steps to support the economy while keeping rates unchanged on Friday.



a man standing in front of a tall building: A pedestrian walks past an electronic ticker board indicating latest figures for the S&P BSE Sensex at the Bombay Stock Exchange (BSE) building in Mumbai, India, on Monday, May 20, 2019. Indian stocks rallied the most in more than three years and the rupee and sovereign bonds climbed after exit polls signaled Prime Minister Narendra Modi’s ruling coalition is poised to retain power.


© Bloomberg
A pedestrian walks past an electronic ticker board indicating latest figures for the S&P BSE Sensex at the Bombay Stock Exchange (BSE) building in Mumbai, India, on Monday, May 20, 2019. Indian stocks rallied the most in more than three years and the rupee and sovereign bonds climbed after exit polls signaled Prime Minister Narendra Modi’s ruling coalition is poised to retain power.

The S&P BSE Sensex climbed 0.6% to 40,434.50 as of 10:55 a.m. in Mumbai, while the NSE Nifty 50 Index advanced 0.5%. Both measures are set for their best week since early June and close to erasing year-to-date losses.

“An accommodative stance remains positive for sentiment,” said Kranthi Bathini, an investment adviser at WealthMills Securities Pvt. in Mumbai, before the decision.

Accommodative monetary policy along with signs of a recovery in the economy may benefit local companies as India heads into its annual festive season, while the central bank also signaled inflation is easing. The Monetary Policy Committee left the benchmark repurchase rate at 4%, as predicted by all 32 economists in a Bloomberg survey.



a close up of a sign: Bombay Stock Exchange (BSE) signage is seen through foliage in Mumbai, India, on Thursday, Jan. 23, 2014. Indian stocks dropped for the first time this week as some investors bet the rally in the benchmark index to a record has outpaced the outlook for earnings growth.


© Bloomberg
Bombay Stock Exchange (BSE) signage is seen through foliage in Mumbai, India, on Thursday, Jan. 23, 2014. Indian stocks dropped for the first time this week as some investors bet the rally in the benchmark index to a record has outpaced the outlook for earnings growth.

The 10-year bond yield slipped eight basis points to 5.94%, while the rupee was up 0.1% to 73.1750 per U.S. dollar.

With the earnings season underway, IT firms Wipro Ltd. and Infosys Ltd. may give some guidance on the outlook when

A general view of a ticker system board at the New York Stock Exchange
A general view of a ticker system board at the New York Stock Exchange


  • US futures rose, along with the decline in the dollar, after President Donald Trump signaled he may be open to piecemeal stimulus.
  • Technology and industrial stocks gained, along with energy futures, as investor risk appetite improved.
  • Treasury yields held steady ahead of weekly jobless claims. 
  • Visit Business Insider’s homepage for more stories.

US stock futures rose sharply on Thursday, pointing at an extension to the strongest daily rally in three months, after President Donald Trump signaled he is open to piecemeal stimulus, rather than a single package, fueling investor optimism that a deal may be soon in the offing.

Futures on the S&P 500, the Nasdaq 100 and the Dow Jones rose between 0.6-0.8%, lifted in part by a weaker dollar, which came under pressure from investors turning to more risk-linked assets, such as technology stocks, industrials and emerging-market currencies. 

In a tweet on Wednesday, Trump urged Democrats and Republicans to collaborate to push for a $25 billion lifeline for the airline sector, after having left the door open the previous day to sending $1,200 payments to individuals. This sent the Dow Jones up by around 530 points in its largest one-day gain in 12 weeks.

“Once again it has been changing expectations of US stimulus that have driven markets, with Wednesday’s rally coming off the back of a softened tone from the president that pointed towards the potential for a smaller, but perhaps more targeted, relief programme,” IG Group analysts said in a morning note.

Read More: A $2.5 billion investment chief highlights the stock-market sectors poised to benefit the most if stimulus is passed after the election – and says Trump ending negotiations doesn’t threaten

SYDNEY (Reuters) – Australia’s central bank held its cash rate at a record low on Tuesday but hinted at further monetary easing as it looks to create jobs in the coronavirus-ravaged economy, which is suffering its worst contraction since the Great Depression.

The Reserve Bank of Australia (RBA) kept the rate unchanged at an all-time low of 0.25%, as widely expected in a Reuters poll. The central bank also affirmed its target for three-year bonds and the recently increased cheap funding program for lenders, but signalled it was considering other measures to boost activity.

“The Board views addressing the high rate of unemployment as an important national priority,” RBA Governor Philip Lowe said in a statement announcing the outcome of the policy meeting.

“The Board continues to consider how additional monetary easing could support jobs as the economy opens up further.”

The decision comes just hours before the government is due to release its budget for 2020/21, where it is expected to announce a record deficit of around A$200 billion ($143 billion) as it boosts spending and welfare. [L4N2GQ27O] [S9N2EK00G]

Westpac chief economist Bill Evans said the focus on the labour market showed the RBA’s concern about the risk of a sustained period of joblessness.

He said this backed his view that the cash rate and three-year target bond rate would be cut to 0.1 percent at the November meeting, with the RBA also to commit to buying bonds with maturities of 5-10 years.

“From our perspective, there is considerable encouragement that the (RBA) Board plans to move next month having given the federal government clear air to sell its budget tonight,” Evans said.

The central bank’s decision to hold fire comes after it last month boosted the size of its term funding facility to around A$200 billion.

Economists polled

By Swati Pandey

SYDNEY, Oct 6 (Reuters)Australia’s central bank left its cash rate at a record low on Tuesday but hinted at further monetary easing to bolster the coronavirus-hit economy, which is suffering its worst contraction since the Great Depression.

The Reserve Bank of Australia (RBA) kept the rate unchanged at 0.25%, as widely expected in a Reuters poll, and at the level it has stood since an emergency cut in mid-March.

“The Board views addressing the high rate of unemployment as an important national priority,” RBA Governor Philip Lowe said in a statement announcing the outcome of the policy meeting.

“The Board continues to consider how additional monetary easing could support jobs as the economy opens up further.”

The government is due to release its budget on Tuesday evening, where it is expected to boost spending to support jobs and growth in the coronavirus-hit economy.

“Both fiscal and monetary support will be required for some time given the outlook for the economy and the prospect of high unemployment,” Lowe said.

The decision to hold fire comes after the central bank last month boosted the size of its term funding facility to around A$200 billion ($148.08 billion).

Economists polled by Reuters last week widely expect the RBA to deliver a 15 basis point cut to 0.1% in November. AU/INT

Australia is set to forecast a record budget deficit of around A$200 billion ($143 billion) for 2020/21 in its federal budget, with its balance sheet driven into the red by a surge in welfare payments due to COVID-19 business closures and job losses. S9N2EK00G

($1 = 1.3937 Australian dollars)

(Reporting by Swati Pandey; Editing by Ana Nicolaci da Costa)

((swati.pandey@thomsonreuters.com; +61 2 9321 8166; Reuters Messaging: twitter.com/swatisays))

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