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The ASX looks set to open higher despite a fade on Wall Street at the end of another record night.
Index futures point to a gain of 21 points or 0.3 per cent, reversing yesterday’s 19.5 point loss.
US stocks probed fresh highs before unwinding most of their gains as a much-anticipated speech from President Donald Trump passed without major policy announcements. Early gains had been fuelled by whispers Trump would announce a date and venue to sign a ‘phase one’ trade deal with China.
The S&P 500 set a new intraday record before finishing five points or 0.16 per cent ahead. The Nasdaq also pushed further into record territory, ending with a gain of 22 points or 0.26 per cent. The Dow fell narrowly short of a new intraday high before closing dead flat.
Markets drifted lower after Trump’s speech to The Economic Club of New York proved uneventful. The president reiterated familiar themes: trade negotiators are “close” to a ‘phase one’ deal, the Chinese are “dying to make a deal”, but have cheated America for years and he will only accept a deal that is “good for the United States and our workers and our great companies”. The president threatened to raise tariffs “very substantially” if China walked away from negotiations.
Dow component Walt Disney rose 1.35 per cent as it debuted a new subscription streaming service, Disney+. Facebook rallied 2.56 per cent after announcing plans for a payment system across Facebook, Messenger, Instagram and Whatsapp.
The ASX 200 retreated 19.5 points or 0.3 per cent yesterday from Monday’s three-month high as Westpac traded without its dividend and a nine-month low in iron ore weighed on miners. Asian markets mounted a tepid rebound from Monday’s heavy falls. China’s Shanghai Composite edged up 0.17 per cent and Hong Kong’s Hang Seng 0.52 per cent.
Australia’s big two iron ore miners traded mixed in overnight action after ore rebounded yesterday. BHP’s UK-listed stock edged up 0.24 per cent, but its US-listed stock shed 0.12 per cent. Rio Tinto gained 0.14 per cent in the UK and lost 0.7 per cent in the US. Spot iron ore at Tianjin bounced 2.5 per cent to $US81 a dry ton.
Oil drifted lower for a second day as the Trump speech offered no new information. Brent crude settled 12 cents or 0.2 per cent weaker at $US62.06 a barrel ahead of an update on US inventories tonight.
Copper logged a third straight loss as buyers awaited clarity on trade and an update on Chinese industrial production tomorrow. Benchmark copper on the London Metal Exchange eased 0.2 per cent to $US5,869 a tonne.
A seventh straight loss sent nickel to a three-month low after Indonesia gave nine producers permission to resume exports until the end of the year. Nickel declined 0.6 per cent on the LME to $US15,475 a tonne. Lead lost 1.5 per cent, tin 1.4 per cent and zinc 1 per cent. Aluminium was flat.
Gold plumbed three-month lows as it fell for a fourth night. Gold for December delivery sagged $3.40 or 0.2 per cent to $US1,453.70 an ounce. Demand for precious metals has been undermined by Wall Street’s record run and strength in the greenback.
The dollar retreated a tenth of a cent to 68.41 US cents.
Turning to the day ahead, the quarterly wage price index is due at 11.30am Eastern Standard Time. In the US, the spotlight will likely swivel tonight from trade to the Federal Reserve as Chair Jerome Powell testifies before politicians in Washington. October inflation figures are also scheduled.
