Aussie shares were set to open near record levels after US stocks were boosted by a "Goldilocks" May jobs report - not too hot, not too cold.
ASX futures inched up seven points or 0.1 per cent to 7300. The S&P/ASX 200 cracked that level for the first time on Friday before trimming its gain to 35 points or 0.49 per cent, finishing at 7295.
Growth stocks led a push back towards all-time highs after soft jobs data soothed concerns the Federal Reserve would be forced to tighten monetary policy to contain a red-hot economy. The major indices advanced in proportion to their weighting of techbology and other growth stocks.
The tech-heavy Nasdaq Composite surged 200 points or 1.47 per cent. For the week, the index gained 0.5 per cent.
The S&P 500 added 37 points or 0.88 per cent, closing within 0.2 per cent of a record. The broadest of the major benchmarks gained 0.6 per cent for the week.
The Dow Jones Industrial Average trailled on the day with a rise of 179 points or 0.52 per cent, but outperformed for the week with a tally of 0.6 per cent.
A choppy week ended on a high following news the economy created 559,000 jobs last month - below the 650,000 gain anticipated by economists polled by Reuters but not by enough to trigger alarm bells. The unemployment rate declined to 5.8 per cent from 6.1 per cent.
John Briggs, global head of strategy at NatWest Markets, said the data was “goldilocks for risk... not too hot to bring in the Fed and not too cold to worry about the economy.”
"It signals the economy continues to recover, but not too quickly to get the Fed to begin either curtailing purchases or raising rates," Michael Arone, chief investment strategist at State Street Global Advisors, told Reuters.
Rate-sensitive tech stocks surged almost 2 per cent as the yields on long-term US treasuries retreated. The FAANG group of sector leaders all advanced: Facebook climbed 1.32 per cent, Apple 1.9 per cent, Amazon 0.6 per cent, Netflix 1.08 per cent and Google parent company Alphabet 1.96 per cent.
Gains in cyclical sectors were more muted. Energy gained 0.57 per cent, industrials 0.34 per cent and materials 0.18 per cent. The financial sector tacked on 0.18 per cent. The Russell 1000 Growth Index gained 1.41 per cent, outstripping a 0.4 per cent advance in the Value Index.
The revival in meme stocks lost momentum. AMC Entertainment fell 6.68 per cent. GameStop eased 3.8 per cent. BlackBerry shed 12.72 per cent.
The domestic market starts a new week on the crest of a record high. The S&P/ASX 200 climbed 35 points or 0.49 per cent on Friday to its third record close in a week. The index gained 1.6 per cent for the week and 265 points for the last fortnight.
The market's buoyant mood is reflected in a rush to list. No fewer than seven IPOs are pencilled in for the week ahead. At time of writing the week looks like this: FOS Capital, Trajan Group (today); Argenica Therapeutics, Salter Brothers Emerging Companies (Thursday); and Torque Metals, Arcadia Minerals and Openn Negotiation (Friday). (NB: IPOs are frequently subject to last-minute delays and postponements.)
Tech stocks look likely to provide leadership today if/when Australian bond yields follow the US lower. Energy also fared well in the US, rising 0.57 per cent as crude wrapped up a 4.6 per cent advance for the week.
The current mood of optimism is expected to be reflected in business and consumer confidence surveys on Tuesday and Wednesday, respectively. Today brings monthly services sector and job advertising reports.
Investor days are scheduled this week for Aurizon on Tuesday and Coles on Wednesday. Marley Spoon holds its AGM on Friday.
Overseas, this week's most important release is likely to be Thursday night's US May consumer price report. The market hopes to see a decline in the inflationary pressures that have weighed on growth stocks this year and triggered period market sell-offs. A strong result would likely spark another market tantrum.
The domestic market no longer seems to consider Covid an earnings threat so long as lockdowns are short and contained. A seven-day extension to Greater Melbourne's latest lockdown hardly registered last week. Travel and tourism stocks barely blinked. Victoria reported five new locally-acquired cases of Covid-19 on Saturday and four on Sunday.
The dollar rallied back above 77 US cents on Friday as the US data miss depressed the greenback. The Aussie edged up 0.01 per cent this morning to 77.34 US cents.
Iron ore retreated for the first time in five sessions. The spot price for ore landed in China eased $2.85 or 1.3 per cent to US$208.35 a tonne. Strong gains through the week saw prices rise $18.80 or almost 10 per cent.
BHP's US-listed stock advanced 1.56 per cent and its UK-listed stock added 0.91 per cent. Rio Tinto put on 1.4 per cent in the US and 0.76 per cent in the UK.
Oil finished at its highest level since May 2019 as the US summer driving holiday season bolstered demand expectations. Brent crude settled 58 cents or 0.8 per cent ahead at US$71.89 a barrel.
“Oil prices are finding tailwind from the clear signs that demand is making a solid recovery,” analysts at Commerzbank wrote.
Gold trimmed a losing week as the US jobs miss encouraged expectations the Fed will maintain inflationary policy settings. Gold is a traditional hedge against inflation. Metal for August delivery settled $18.70 or 1 per cent higher at US$1,892 an ounce. The NYSE Arca Gold Bugs Index rose 1.25 per cent.
Industrial metals rebounded as declining yields and heavy price falls on Thursday brought in bargain-hunters. Benchmark copper on the London Metal Exchange bounced 1.7 per cent to US$9,939.50 a tonne. Aluminium added 2.5 per cent, nickel 0.7 per cent, zinc 0.9 per cent and tin 3.5 per cent. Lead shed 2.7 per cent.
Copper “is bouncing today because of bargain hunting. The overall attitude is still bullish for industrial metals and commodities in general,” Julius Baer analyst Carsten Menke told Reuters.
“The fundamentals for industrial metals are good, but expectations have been excessive as to where prices should be based on the fundamental backdrop.”