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Stock index futures point to a flat start to Australian action as traders assess a barrage of corporate earnings following a record close on Wall Street and a six-year high in iron ore.
Futures traders were in wait-and-see made ahead of one of the busiest days of the full-year reporting season. ASX SPI200 index futures eased five points or 0.1 per cent to 6064.
Earnings reports were scheduled this morning from health heavyweight CSL, Crown Resorts, Brambles, Tabcorp, Vicinity Centres, Oz Minerals, WiseTech, Nearmap, A2 Milk, Michael Hill, McMillan Shakespeare, Domino’s Pizza, Vocus and Dexus. The S&P/ASX 200 rallied 47 points or 0.8 per cent yesterday as strong results from Cochlear, Monadelphous and Netwealth helped offset pressure on the banks and a modest earnings miss from mining heavyweight BHP.
Wall Street completed one of the most remarkable rebounds in history overnight as the S&P 500 closed at a record high. The broadest of the US benchmarks edged up eight points or 0.23 per cent to 3,389.78, finally recouping all of its coronavirus-fuelled losses since the old February high. The index also set a new intraday high.
The record fell after almost a week of failed attempts, signalling the end of the shortest bear market in US history. Huge gains in big tech stocks have lifted the index 55 per cent since the pandemic meltdown bottomed on March 23.
Big Tech was last night’s biggest driver, lifting the Nasdaq to a new peak. The tech-heavy benchmark climbed 81 points or 0.73 per cent as Amazon jumped 4.1 per cent, Alphabet 2.6 per cent and Netflix 2 per cent.
The Dow trailled as the market sniffed at earnings beats from Walmart and Home Depot. The blue-chip average eased 67 points or 0.24 per cent. Walmart fell 0.7 per cent and Home Depot 1.1 per cent despite quarterly reports from the retail giants topping analyst expectations.
BHP declined in overseas trade even as the price of its most important export surged to its highest level in six and a half years. The spot price for iron ore landed in China soared $5.70 or 4.7 per cent to US$127.60 a dry ton. BHP was held back by news yesterday that its 2020 full-year profit fell short of the analyst consensus. The company’s US-listed stock dropped 1.86 per cent and its UK-listed stock 2.55 per cent. Rio Tinto put on 1.79 per cent in the US and 0.29 per cent in the UK.
A stalemate over a new coronavirus relief package continued. Treasury Secretary Steven Mnuchin said Democrats were “not willing to sit down and strike a reasonable deal”. Bloomberg reported Senate Republicans planned to present an alternative relief plan that includes US$10 billion for the Postal Service, the latest political flash-point after the White House cut funding.
Commodities
The energy sector declined 1.7 per cent during a flat session for oil as traders await the outcome of tonight’s meeting of the Organization of the Petroleum Exporting Countries. Brent crude settled nine cents or 0.2 per cent ahead at US$45.56 a barrel. The US benchmark finished unchanged.
Gold stocks retreated despite the metal regaining the psychologically-significant US$2,000 an ounce level. Gold for December delivery settled $14.40 or 0.7 per cent ahead at US$2,012.10 an ounce. The NYSE Arca Gold Bugs index of miners slid 0.76 per cent.
Copper rose for a third straight session, boosted by the sense of optimism over Chinese demand that lifted iron ore. Reports earlier this month showed increases in car sales and factory activity in China.
“China’s old economy of manufacturing and industry is motoring along and that’s good for metals,” independent consultant Robin Bhar told Reuters. ” The metals also seem to be keeping lock step with the stock markets, which in turn are taking their cue from the massive fiscal and monetary stimulus, which is ongoing.”
Benchmark copper on the London Metal Exchange climbed 2 per cent to US$6,581 a tonne. Aluminium put on 1 per cent, nickel 0.5 per cent, lead 0.8 per cent, zinc 0.7 per cent and tin 1.6 per cent.
The dollar hit its highest level since the start of the pandemic, lately off 0.07 per cent at 72.35 US cents after trading above 72.4 US cents.
