A mixed night on Wall Street and weakness in key commodities point to a soft start to Australian trade.
ASX SPI200 index futures eased 12 points or 0.2 per cent to 6846 as BHP and Rio Tinto fell in US trade following declines in iron ore and copper.
A late dip denied Wall Street a sixth straight winning session. The S&P 500 and Nasdaq both hit record highs before easing in the final minutes of trade. The S&P 500 finished one point or 0.04 per cent lower. The Dow shed 28 points or 0.1 per cent. The Nasdaq held on for a gain of four points or 0.05 per cent.
The late retreat was the first pause in a steady upward climb since the US reached terms on a phase-one trade deal with China. The S&P 500 has hit a new intraday high every night for the last six sessions, its longest run since January last year. The benchmark index has risen more than 27 per cent this year, its best performance since 2013.
The biggest pressure on the major indices overnight was a 10.1 per cent dive in FedEx shares after the courier company’s quarterly report missed earnings and revenue expectations, and Amazon blocked third-party vendors from using the service for Prime Deliveries. Rival UPS was collateral damage, falling 1.9 per cent.
Markets appeared unfazed by the prospect of an impeachment trial. The Democrat-controlled House of Representatives was expected to vote this morning in favour of two articles of impeachment against President Donald Trump. A trial would then take place in the Republican-controlled Senate, which is considered unlikely to convict one of their own.
The post-trade deal rally in Australian stocks has stalled just short of the November highs. The ASX 200 yesterday edged up four points or less than 0.1 per cent to close within a couple of points of 6850 for a third day in a row. The index briefly passed the all-time closing high of 6864 on Tuesday before falling back.
BHP and Rio Tinto may be headwinds this morning following overnight weakness. While BHP’s UK-listed stock edged up 0.1 per cent, its US-listed stock slid 1.03 per cent. Similarly, Rio Tinto shed 0.26 per cent in the US after gaining 0.2 per cent in the UK. Iron ore has come off its highs since the trade announcement. Spot iron ore eased 80 cents or 0.9 per cent to $US92.30 a dry ton.
Copper surrendered its hold on a seven-month peak on news of record Chinese production. Official data showed China’s output of refined copper increased by 19.6 per cent last month on the same time last year to a record 909,000 tonnes. Benchmark copper fell 0.6 per cent to $US6,161 a tonne on the London Metal Exchange. Aluminium improved 0.7 per cent, lead 0.1 per cent and zinc 1.1 per cent. Nickel shed 0.4 per cent and tin 1 per cent.
Gold drifted lower as the greenback edged higher. Gold for February delivery settled $1.90 or 0.1 per cent lower at $US1,478.70 an ounce. Analysts said traders were waiting for fresh catalysts after trade tensions eased.
Oil traded little changed as an OPEC-fuelled rally lost momentum. Brent crude edged up seven cents or 0.1 per cent to $US66.17 a barrel. West Texas intermediate dipped a cent to $US60.93.
The dollar held its ground overnight, lately up less than a tenth of a cent at 68.54 US cents.
The market mood may change mid-morning with the release of the unpredictable monthly jobs report. The consensus among economists is that the 11.30 am EST report will show the economy added 14,500 new positions last month, leaving the unemployment rate steady at 5.3 per cent. A major deviation in either direction would swing market sentiment. Wall Street has a slew of second-tier economic reports on tap tonight, including home sales and regional manufacturing data.