Futures trading points to a subdued start to a holiday-shortened Australian session as the market winds down for Christmas.
ASX SPI200 index futures eased four points or less than 0.1 per cent to 6711 as local traders once again snubbed positive leads from Wall Street.
The domestic rates outlook has dictated the market direction in the run-up to the holidays, boosting the dollar and crimping risk assets such as stocks as institutional traders rearranged portfolios to reflect a possible end to the RBA’s cutting cycle. The ASX 200 dropped 31 points or 0.5 per cent yesterday to extend its losing run into a third session, the index’s longest losing streak since September. The Aussie rose almost a third of a cent to 69.19 US cents.
Wall Street’s Santa rally continued overnight, lifting all three major indices to record closes. The S&P 500 advanced three points or 0.09 per cent as trade-sensitive stocks were lifted by news China will cut tariffs on a range of imports. The Nasdaq gained 21 points or 0.23 per cent as semi-conductor manufacturers were supported by news some types will benefit from lower Chinese levies.
The Dow Jones Industrial Average was the best of the three indices, rising 96 points or 0.34 per cent after Boeing CEO Dennis Muilenburg fell on his sword after months of controversy over the plane-maker’s disastrous 737 MAX. Boeing shares bounced 2.9 per cent. The company has been a drag on the Dow all year.
China said it will reduce tariffs on 850 products on January 1. Aside from semi-conductors, imports affected include frozen pork and avocado, steel additives, some wood and paper products, and some medications.
Last night’s rally set Wall Street on course for a fifth straight winning week. US stocks have been rocket-charged by a trade deal with China, clarity on Brexit, a supportive central bank and strength in economic data. The S&P 500 is up more than 28 per cent for the calendar year.
Movements on commodity markets were fairly modest as buyers slipped away for holidays. The spot iron ore price edged up 20 cents or 0.2 per cent in China to $US91.10 a dry ton. That helped BHP’s US-listed stock rise 0.29 per cent and its UK-listed stock 0.46 per cent. Rio Tinto added 0.32 per cent in the US and 0.57 per cent in the UK.
Copper inched up 0.2 per cent to $US6.190 a tonne on muted volumes on the London Metal Exchange. Aluminium also gained 0.2 per cent. Lead sank 1.1 per cent, nickel 1.2 per cent, tin 0.2 per cent and zinc 2.1 per cent.
Oil edged higher despite hints of higher production next year. Brent crude settled 25 cents or 0.4 per cent ahead at $US66.39 a barrel. Russia’s energy minister told a domestic TV audience that OPEC and its allies may consider easing production caps at their March meeting.
Gold settled at a six-week peak after the night’s major US economic report missed expectations. Orders for durable goods declined 2 per cent last month, the sharpest fall since May. Economists expected growth of 1 per cent, in line with recent strength in economic signals. Gold for February delivery settled $7.80 or 0.5 per cent ahead at $US1,488.70 an ounce.
The domestic economic calendar is empty as the market winds down for Christmas. Trading ends at 2.10 pm EST this afternoon. Wall Street had house sales figures on tap tonight.