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Australian shares were set to open little changed ahead of today’s consumer prices report despite another round of records on Wall Street.

ASX futures edged up just four points or 0.05 per cent after a mid-session wobble and late dip took the shine off new highs for the Dow and S&P 500.

Caution appeared to set in last night ahead of this morning’s quarterly consumer price index, which has important implications for monetary policy. The S&P/ASX 200 gave up most of its initial gains to finish just 2.4 or 0.03 per cent higher after being up more than 30 points.

Wall Street

US stocks scaled fresh highs as the quarterly reporting season continued to deliver more hits than misses.

The S&P 500 rallied eight points or 0.18 per cent to a new all-time closing high. The Dow Jones Industrial Average also finished at a record, up 16 points or 0.04 per cent. The Nasdaq Composite gained nine points or 0.06 per cent.

Earnings from General Electric, United Parcel Service and Hasbro continued the upbeat tone of this reporting season. More than 80 per cent of S&P 500 companies have beaten analysts’ earnings predictions. UPS surged 7.01 per cent, GE 2.08 per cent and Hasbro 3.23 per cent.   

“Risk appetite remains on the table for U.S. equities,” Craig Johnson, chief market technician at Piper Sandler, told CNBC. “Corporate earnings have been the key catalyst behind the recent record-high rally as robust demand continues to offset well-known supply constraints and pricing pressures.”

The major indices finished off their highs after investors soured on Facebook‘s report. The social media giant finished 3.92 per cent in the red after confirming changes to Apple’s privacy settings had affected ad revenues. Several analysts downgraded their ratings to reflect the impact.

Tesla was another late drag on the Nasdaq and S&P 500. The electric car maker climbed more than 5 per cent in early action before fading to a loss of 0.63 per cent. Elon Musk’s company flew up 12.7 per cent on Monday after rental firm Hertz ordered 100,000 vehicles, Tesla’s largest order to date.

Tech heavyweights Microsoft and Alphabet rallied ahead of reporting earnings after this morning’s closing bell. Microsoft gained 0.64 per cent. Alphabet added 1.35 per cent.

Also helping market sentiment, consumer confidence improved for the first time in four months. The Conference Board’s index climbed to 113.8 last month from a September reading of 109.8.

Australian outlook

A nasty late dip undercut much of the night’s US gains. A dash of caution is perhaps understandable with the three major indices at/near all-time highs and two of the market’s largest companies set to report immediately after the bell.

The dip further dampened what was already looking like a tepid start to trade here. The S&P/ASX 200 has risen for eight of the last nine sessions, but gains have dwindled in recent sessions. The benchmark has only advanced more than 0.1 per cent in one of the last four sessions. In other words, the market looks tired.

Energy was once again the night’s standout US sector, rising 0.68 per cent as crude made new multi-year highs (more below). BHP and Rio Tinto were overlooked during a 0.36 per cent rise in materials. The financial sector edged up 0.16 per cent.

The day ahead brings the week’s big-ticket economic report: the quarterly consumer price index at 11.30 am AEDT. With inflation a hot topic, any increase in prices greater than the 0.8 per cent anticipated by economists will set the cat amongst the pigeons. Alternatively, a weaker reading would ease pressure on the RBA to reduce support for the economy.

A big day of annual general meetings includes virtual meets at Woolworths, Whitehaven Coal, Blackmores, St Barbara, Chorus, Netwealth and Codan. Quarterlies are due from Sandfire Resources and Galaxy.

IPOs: Star Minerals is set to list at 1 pm AEDT. Star is a gold explorer with a “development-ready” project and extensive land holdings in WA.

The dollar firmed 0.17 per cent overnight to 75.05 US cents.

Commodities

Oil‘s run of multi-year highs continued after Saudi Arabia dismissed calls earlier in the week to raise production. West Texas Intermediate crude advanced 89 US cents or 1.1 per cent to settle at US$84.65 a barrel, the strongest finish in seven years. Brent crude settled 41 US cents or 0.5 per cent ahead at US$86.40 a barrel, a three-year closing high.

“There is little that can tilt oil prices away from their upwards momentum on the short term, as the only real supply source of significance is OPEC+, and there doesn’t seem to be much mood for policy change on that front for the moment,” Louise Dickson, senior oil markets analyst at Rystad Energy, said.

Natural gas gave back some of Monday’s near 12 per cent surge. November gas futures dipped 0.3 per cent to US$5.882 per million British thermal units. Prices surged in the US at the start of the week after weather forecasters predicted a cold start to November.

Gold surrendered its fleeting hold on US$1,800 as the greenback ticked higher. Metal for December delivery settled US$13.40 or 0.7 per cent lower at US$1,793.40 an ounce, a day after closing above US$1,800 for the first time in six weeks. The NYSE Arca Gold Bugs Index eased 0.48 per cent.

BHP and Rio Tinto faltered in overseas action despite an up-tick in iron ore.  The spot price for ore landed in China improved US$3 or 2.5 per cent to US$122.75 a tonne.

BHP’s US-listed stock declined 0.94 per cent and its UK-listed stock 0.81 per cent. Rio Tinto fell 1.17 per cent in the US and 0.87 per cent in the UK.

Copper retreated after stockpiles in London Metal Exchange warehouses rose for a fourth session. Copper traded on Comex dropped 0.9 per cent to US$4.486 a pound.

Benchmark copper on the LME declined 1.1 per cent to US$9,955.50 a tonne. Aluminium gave up 1.6 per cent, nickel 1.4 per cent, lead 0.4 per cent, zinc 1.1 per cent and tin 0.63 per cent.

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