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Aussie stocks look set to open little changed following modest gains in the US, where investors battled a creeping tide of bleak economic data.

ASX index futures edged up eight points or less than 0.2 per cent to 5431, suggesting a muted end to a holiday-shortened week that began with a bang, then steadily lost momentum. The S&P/ASX 200 jumped 101 points when trade resumed following the Easter break, but has since given back 72 points in two sessions.

A choppy session in the US saw stocks trade both sides of break-even before struggling higher in the final hour of trade. The S&P 500 finished 16 points or 0.58 per cent ahead despite news that more than five million Americans joined the swelling number of unemployed. The Dow edged up 33 points or 0.14 per cent, while the Nasdaq benefited from solid gains in Amazon and Netflix, climbing 139 points or 0.58 per cent.

After a three-week rebound from a savage month-long sell-off that sank all ships, the market has become more selective, rewarding companies that benefit from lockdown restrictions and punishing those whose business models depend on a return to normal life. Online retailer Amazon and streaming service Netflix hit all-time highs, climbing 4.4 per cent and 2.9 per cent, respectively. By contrast, airplane-maker Boeing dived 8 per cent, oil companies Exxon Mobil and Chevron lost at least 3 per cent and United Airlines slumped 11.5 per cent.

“This week we seem to have narrowed the focus back to the what works in this work-from-home world,” Art Hogan, chief market strategist at National Securities in the US, told CNBC. “I think that’s the realisation that we’re going to get a horrendous pile of data dumped on our heads.”

First-time claims for unemployment benefits were 5.25 million last week, indicating almost 22 million Americans have lost their jobs in four weeks. While the number of claims declined for a third week, it was still big enough to push the jobless rate towards 15 per cent, according to economists. Six weeks ago, weekly initial jobless claims averaged in the low 200,000s and just 1.7 million Americans collected benefits.

Other reports last night showed construction on new homes recorded the biggest month-on-month slump since 1984, while manufacturing in the greater Philadelphia region contracted to its weakest level since 1980. Wall Street’s “fear gauge”, the VIX, crept higher for a second session.

President Donald Trump was expected to announce “new guidelines” for reopening the economy at a press conference this morning. Trump has been pushing to lift lockdown restrictions as early as possible, declaring “There’s also death involved in keeping [the economy] closed. We have to get back to work.” Overnight, New York Governor Andrew Cuomo said non-essential businesses in the state will remain closed until May 15.

Technology, health and consumer discretionary stocks topped the sector gains, rising between 1.2 and 2.2 per cent. Energy stocks shed 4 per cent, financials 1.7 per cent and industrials 0.8 per cent.

The energy sector tumbled as oil wallowed near 18-year lows. The US benchmark closed flat at US$19.87 a barrel, repeating its weakest close since February 2002. Brent crude edged up $13 cents or 0.5 per cent to settle at US$27.82 a barrel.

The big two Australian miners climbed in overseas trade. BHP’s US-listed stock added 0.52 per cent and its UK-listed stock 1.35 per cent. Rio Tinto put on 0.98 per cent in the US and 0.7 per cent in the UK. The spot price for iron ore landed in China eased $1.35 or 1.6 per cent to US$84.50 a dry ton.

Safe-haven buying of the US dollar helped send gold lower for a second session. Gold for June delivery settled $8.50 or 0.5 per cent lower at US$1,731.70 an ounce. The Australian dollar edged up 0.18 per cent to 63.28 US cents.

Copper firmed after a modest pick-up in Chinese home prices raised hopes the property market was improving after a hit from Covid-19 lockdowns. Benchmark copper on the London Metal Exchange improved 0.7 per cent to US$5,118.25 a tonne. Aluminium and zinc added 0.4 per cent. Nickel was unchanged. Lead fell 0.4 per cent and tin 1 per cent.

Market sentiment faces a test at midday EST with the release of Chinese data predicted to show a sharp contraction in GDP and severe declines in industrial production, investment and retail sales. The US economic calendar is light tonight, but quarterly earnings are due from Procter & Gamble and Schlumberger.   

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