The last full trading session of the year looks set to start on a soft note following a flat finish on Wall Street.
Australian index futures eased 22 points or 0.3 per cent to 6722 as traders prepared to wind up a profitable year. With two sessions left to trade, the ASX 200 has put on 20.8 per cent for the calendar year. The benchmark index rallied 27.5 points or 0.4 per cent on Friday as resource stocks caught a lift from increases in crude, gold and copper.
Normal operating hours apply today, before a holiday-shortened session tomorrow for New Year’s Eve. The market is closed on Wednesday, then resumes normal trading hours on Thursday.
US stocks eked out another round of record highs before falling back to neutral at Friday’s close. The S&P 500 finished with a gain of 0.11 points, a record finish on an advance of less than 0.1 per cent. The Dow rose 24 points or 0.08 per cent to 28,645, also an all-time closing high. The Nasdaq dipped 16 points or 0.17 per cent to end an 11-session winning run.
Stocks were supported by further signs of strength in China’s economy. Profits at Chinese industrial companies increased at the fastest pace in eight months during November. Industrial profits rose 5.4 per cent from the same time last year, ending a three-month run of declines and confirming recent signs of recovery in a sector battered by a grinding trade war with the US. Industrial production increased at the fastest pace in five months last month amid signs of progress towards a deal. US President Donald Trump and Chinese President Xi Jinping are expected to sign a phase-one deal early next month.
Rate cuts and optimism over the improving trade outlook have helped propel US stocks towards their best annual returns in years. With two sessions left to trade, the S&P 500 has put on more than 29 per cent, just short of the 29.6 per cent tally in 1997.
Traditional defensive sectors outperformed on Friday. The top gainers were consumer staples, real estate and utilities. Resource stocks trailled. Rio Tinto shed 0.24 per cent in the US after gaining 0.3 per cent in the UK. BHP’s US-listed stock bucked the trend, rising 0.22 per cent. Its UK-listed stock gained 1.08 per cent. Spot iron ore edged up 80 cents or 0.9 per cent to $US90.50 a dry ton.
Oil sealed a fourth week of gains, settling near its highest level in three months. Brent crude rose 24 cents or 0.4 per cent to $US68.16 a barrel after a report showed US crude inventories declined more than expected in the week before Christmas.
Gold put the icing on its best week in four months. Gold for February delivery settled $3.70 or 0.2 per cent ahead at $US1,518.10 an ounce for a weekly tally of 2.45 per cent.
Copper hit an eight-month high before fading back to break-even. Benchmark copper traded at $US6,266.50 a tonne on the London Metal Exchange and ended steady at $US6,214. The “metal with the degree in economics” gained 0.6 per cent for the week and has rallied for six straight weeks. Aluminium gained 0.5 per cent for the session and zinc 1.4 per cent. Lead slid 0.4 per cent and nickel 0.9 per cent. Tin was flat.
The dollar opened steady this morning at 69.76 US cents.
A predictably light week ahead for economic data. The domestic calendar offers nothing of note. China releases manufacturing and services data tomorrow and Thursday. Wall Street has home sales and regional manufacturing reports tonight, consumer confidence tomorrow night and the minutes from the last Federal Reserve policy meeting on Friday.