Record night on Wall Street to boost ASX

The Australian trading week looks set for a downbeat start as a public holiday in the US and lingering concerns about the coronavirus depress buyer interest.

ASX SPI200 index futures eased 17 points or 0.2 per cent on Saturday morning to 7049 after US stocks closed mixed but little changed ahead of the Presidents Day long weekend. The benchmark domestic index, the ASX 200, finished just two and a half points shy of a closing record on Friday after a revival in the banks lifted the market for a fourth day.  

With weak overseas leads, traders will look to the domestic earnings season to generate momentum. The interim reporting season hits its peak this week as more than 130 companies release updates. Today brings reports from QBE, Brambles, Bendigo Bank, GWA Group and Altium. Highlights later in the week include BHP and Coles tomorrow, Wesfarmers and Fortescue on Wednesday, and Qantas and Santos on Thursday.

US stocks traded in the red for much of Friday before a late reversal following reports the White House was considering ways to encourage investment in the stock market. The S&P 500 finished near its session high, six points or 0.18 per cent higher at a new record of 3,380. The Nasdaq also claimed a new closing high with a rise of 19 points or 0.2 per cent. The Dow trimmed its loss to 25 points or 0.09 per cent.

The market bounced late in the session after CNBC reported the White House was exploring tax incentives to draw more small investors into the market. The proposal is a potential response to the drop in stock ownership since the GFC.

Wall Street sealed a second week of solid gains despite ongoing concerns about the economic fallout from the Covid-19 virus outbreak. The S&P 500 gained 1.6 per cent for the week, the Nasdaq 2.2 per cent and the Dow 1 per cent. Here, the ASX 200 gained 1.5 per cent. Over the weekend, China reported a sharp drop on fresh cases of the virus: 2,641 cases on Friday, down from 5,090 on Thursday. Fluctuations in the numbers kept markets on edge for much of last week.

The mood on Friday was dented by soft economic data. Core retail sales were stagnant last month as clothing stores suffered a 3.1 per cent setback, the heaviest since the GFC. Industrial production declined 0.3 per cent in January, the fourth fall in five months.

The materials and energy sectors underperformed on a day when traditional defensives delivered the best returns. BHP's US-listed stock fell 0.6 per cent and its UK-listed stock 1.14 per cent. Rio Tinto shed 0.67 per cent in the US and 0.51 per cent in the UK. The spot price for iron ore landed at Qingdao in China edged up 10 cents or less than 0.1 per cent to $US88.67 a dry ton.

The US energy sector fell 0.8 per cent despite a rise on Friday that extended  crude's first weekly gain in six weeks. Brent crude settled 98 cents or 1.7 per cent higher at $US57.32 a barrel for a weekly tally of 5.2 per cent.

Gold claimed a two-week high as traders continued to hedge against unknowns attached to the Covid-19 virus. Gold for April delivery settled $7.60 or 0.5 per cent ahead at $US1,586.40 an ounce for a weekly gain of 0.8 per cent.

Copper pared a second week of gains. Benchmark copper on the London Metal Exchange traded 0.7 per cent lower in closing rings at $US5,751 a tonne, trimming its weekly gain to 1.5 per cent. Aluminium was bid down 0.8 per cent, nickel 1.1 per cent, lead 1.6 per cent, zinc 1 per cent and tin 0.2 per cent.

The dollar was buying 67.13 US cents.

The domestic economic calendar kicks into gear later in the week, with the release tomorrow of the minutes from the last Reserve Bank meeting, the quarterly wage price index on Wednesday, and the January employment report on Thursday. US markets are closed tonight.

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