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A record close on Wall Street points to a seventh straight rise on the ASX after US President Donald Trump talked up a trade deal with China.
Australian index futures
rallied 23 points or 0.3 per cent to 6741 as the S&P 500 set a new
high. The passing of the old milestone kept alive the second longest US
bull market in history.
The S&P 500
exceeded its intraday all-time high of 3,027.98 set on July 26 early in
the session and closed 17 points or 0.56 per cent ahead at 3,039.4. The
Dow rose 133 points or 0.49 per cent, finishing roughly one per cent
from a record. The Nasdaq added 83 points or 1.01 per cent, also just
short of an all-time high.
The S&P 500’s record close was
built on three pillars: growing hopes for a trade deal, a
stronger-than-expected corporate quarterly reporting season and
anticipation for a rate cut later this week. President Trump ramped up trade
hopes overnight by telling reporters he expected to sign a deal “ahead
of schedule”. He said, “We are looking probably to be ahead of schedule
to sign a very big portion of the China deal, we’ll call it Phase One
but it’s a very big portion.” His claim followed a statement on Friday
from his trade negotiator’s office that the two sides were close to
finalising parts of a deal.
The third-quarter earnings season continued
to exceed analysts’ predictions. Roughly eighty per cent of S&P 500
companies have beaten estimates, according to FactSet. Communications
giant AT&T rose 4.3 per cent overnight after beating profit targets
but missing on revenue.
The US Federal Reserve gathers tonight for a two-day policy meeting that is expected to conclude with a rate cut
on Thursday morning, Australian time. The odds on a cut of 25 basis
points for the third time this year rose to 95.1 per cent overnight,
according to CME Group’s FedWatch Tool.
The ASX 200
inched to a sixth consecutive gain yesterday, but lost momentum by the
close, ending just 1.5 points or less than 0.1 per cent ahead after
earlier being up as much 27 points. The benchmark index touched its
strongest level in a month, finishing a little more than 100 points off
its July all-time high.
Australian mining stocks marched higher in overseas trade. BHP’s
US-listed stock gained 1.36 per cent and its UK-listed stock 1.28 per
cent. Rio Tinto added 1.48 per cent in the US and 0.53 per cent in the
UK. The spot iron ore price was steady at $US87.65 a ton, due to a Singapore holiday.
Oil broke a four-session winning run, retreating from one-month highs after an energy market analyst predicted US stockpiles will show an increase this week. Brent crude settled 45 cents or 0.7 per cent lower at $US61.57 a barrel.
Copper touched a five-week peak on the London Metal Exchange
before fading. Benchmark copper was bid down 0.3 per cent in closing
rings. Zinc ended the session near a five-month high, bid up 1.3 per
cent. Aluminium gained 0.5 per cent, lead 0.6 per cent and tin 0.3 per
cent. Nickel gave up 0.8 percent.
A “risk-on” session saw demand for gold and
other havens ebb. Gold for December delivery
settled $9.50 or 0.6 per cent lower at
$US1,495.80 an ounce.
The dollar rose almost a quarter of a cent to 68.38 US cents.
Looking ahead, there is nothing on the economic calendar today to change the market mood, but the AGM season continues with meetings for shareholders of Fortescue, Nick Scali, Vocus Group and Tassal Group. The next few days will be exceptionally busy with quarterly and annual reports. Consumer confidence is tonight’s big-ticket economic release on Wall Street. Earnings updates are due from Google parent company Alphabet, General Motors and Mastercard.
