Morning traders. Thanks Trees and after-market regulars.
Market wrap:
The ASX 200 is primed to break through 6000 for the first time in seven years after a retreat in the US dollar helped boost Wall Street and commodity prices.
The June SPI 200 futures contract rallied 28 points or 0.5% to 5998, a level last seen in February 2008 as the global financial crisis started to unfold.
US stocks ended their first positive week in a month with solid gains on Friday as the heat continued to come out of a rally in the greenback that has sapped demand for other investment asset and raised questions over the profit impact at US multinationals. The S&P 500 put on 19 points or 0.9% to finish close to a three-week peak with a weekly tally of 2.7%. The Dow added 169 points or 0.94% for a weekly rise of 3.2% and the Nasdaq 34 points or 0.67% to 5,026, a 15-year high. Both the Nasdaq and S&P 500 closed less than 0.4% from record levels.
"The weaker dollar is helping the Dow because of the large multinationals..." Peter Boockvar, chief market analyst at The Lindsey Group in the US, told CNBC. "We're just continuing to ride the idea that [Federal Reserve chair] Janet Yellen is never going to raise rates and even if she does it's going to be so slow that we're not going to notice."
Trading volumes were exaggerated by the expiry of several types of options and futures derivatives during a "quadruple witching" session. However, the session produced no major economic data. Nike was a standout on the Dow and S&P 500, rising 3.72% after its quarterly profit topped analyst expectations.
The US dollar reversed Thursday night's rebound, falling 1.28% amid speculation that the first rate rise in the US later this year has been priced in. The index hit a 12-year high this month as the Fed prepared the market for rate increases at the same time as international peers in Europe, Australia and Asia are looking at further cuts. On Friday, Fed board member Charles Evans said last week's policy statement from the central bank allowed for the possibility that rates might stay near zero ”for quite some time”. Read more here. Atlanta Federal Reserve President Dennis Lockhart said the first increase would likely come at the June, July or September policy meeting. Read more here.
The US energy sector rallied 1.48% after a weekly report showed drilling activity continues to taper in the US. Baker Hughes said the number of rigs actively drilling for oil and natural gas in the US last week declined by 56 to 1,069, and was down 734 rigs from the same time last year. The news helped lift West Texas Intermediate crude oil for April delivery $1.76 or 4% to US$45.72 a barrel.
Gold stocks jumped 2.74% as the precious metal sealed a third straight rise for a weekly gain of 2.8%. Gold for April delivery settled $15.60 or 1.3% ahead at US$1,184.60 an ounce. May silver fared even better, surging 76.9 cents or 4.8% to US$16.83 an ounce for a weekly advance of around 9%.
BHP and Rio Tinto benefitted from the improved mood towards producers of raw materials. BHP rallied 3.13% and Rio Tinto 3.56% in US trade. Spot iron ore for import to China on Friday lifted 50 cents to US$55 a dry tonne.
Copper hit a two-month high after Chinese inventories declined for the first time in two months. London copper jumped 3.3%, aluminium 0.9%, lead 4.2%, nickel 3.5%, tin 1.9% and zinc 2.1%. US copper for May delivery rallied 3.4% to US$2.75 a pound.
Europe's benchmark share index closed just shy of an all-time high after Greece's Prime Minister said his government will forward reform plans to European leaders within days demanded in exchange for further bailout funds. The Stoxx Europe 600 gained 0.79% as Germany's DAX put on 1.17%, France's CAC 0.99% and Britain's FTSE 0.87%.
The dollar was this morning buying 77.86 US cents.
TRADING THEMES TODAY
SEVEN-YEAR ITCH: Looks like the XJO will scratch 6000 this morning for the first time since the early months of the GFC. Has it really been seven years? Some wounds take forever to heal. I might be over it in time for the next crash. These are buoyant times and it's clear from the tone of the threads that many are cashing in. Enjoy it while it lasts and keep in mind if you're new to the boards that a rising market makes everyone a genius, while a falling market makes fools of most. Hubris is a dangerous trading partner. Keep a clear head and pay attention to the signals on the wind. This bull market has had a long run. It's conceivable that it will run for years yet, but they all end sometime, usually in irrational exuberance.
ECONOMIC NEWS: No significant domestic news scheduled today. Existing home sales and speeches by two Fed board members are tonight's US highlights.
