Morning traders. Thanks Trees and after-market regulars.
Market wrap:
Stocks likely face a tepid open as investors weigh a flat close on Wall Street against mixed Chinese trade data released during the weekend.
The December SPI 200 futures contract dipped three points or less than 0.1% to 5550 on Saturday morning as US stocks eked out meagre gains, iron ore marked a new five-year low and gold staged a sharp relief rally after US jobs data missed expectations.
The S&P 500 edged up a point or 0.04% to a third straight record close despite a muted reaction to October jobs figures.The index gained 0.7% over a third consecutive winning week and has rebounded more than 9% since hitting a six-month low on October 15. The Dow rose 20 points or 0.11% to an all-time closing high. The Nasdaq pared initial falls but closed five points or 0.12% in the red.
The US economy added 214,000 jobs last month, falling short of economists' expectations for growth of at least 235,000 and down from an upwardly-revised September figure of 256,000. However, the data marked the ninth straight month of employment growth above 200,000 for the first time since 1994, helping pull the unemployment rate down to 5.8%, a six-year low, from 5.9%.
“The report is positive," Brad Sorensen, director of market and sector research at Schwab in the US, told MarketWatch. "The economy is still adding more than 200,000 jobs a month, but at the same time there is no indication that it is overheating as the wage growth remains muted. There is no reason for the Fed to get hawkish."
Chinese trade figures released on Saturday showed exports growth slowed less than expected but imports disappointed. October exports were 11.6% stronger than a year earlier, down from a September reading of 15.3% but ahead of the 10.6% forecast from economists polled by Bloomberg. Imports rose 4.6%, short of the 5% figure anticipated by economists and a 7% increase in September.
The defensive utilities sector was the strongest of the seven S&P industry groups that advanced on Friday. Energy producers were another highlight, rising 0.7% as oil bounced off a three-year low. West Texas Intermediate crude oil for December delivery rallied 74 cents or 1% to settle at US$78.65 a barrel but did not avoid a sixth straight losing week. Prices declined 2.4% over the week after OPEC cut its demand outlook and Saudi Arabia reduced contract prices.
Australia's largest iron ore producers saw robust gains in US trade despite an 11th decline in the price of ore from the last 12 sessions. BHP put on 3.13% and Rio Tinto 2.65% in US action. Spot iron ore for import to China on Friday eased 10 cents or 0.2% to US$75.50 a dry tonne, the lowest price since June 2009. Read more here.
Gold ended a losing week with a relief rally after the US October jobs data encouraged speculation that the economy might be losing steam. Gold for December delivery soared $27.20 or 2.4% to settle at US$1,169.80 an ounce and extended its recovery to US$1,178.60 by the end of the session. The contract had fallen for seven straight days leading into Friday's session.
Copper improved as industrial metal buyers took a more positive view of the US data. In London, copper gained 0.83%, lead 1.34%, tin 1.3% and zinc 0.81%. Aluminium lost 1.01% and nickel 0.48%. US copper for December delivery rose almost two cents or 0.55% to US$3.03 a pound.
European stocks erased their gains for the week amid initial disappointment at US employment figures and as German industrial output missed expectations. The Stoxx Europe 600 fell 0.54% as Germany's DAX retreated 0.91%, France's CAC lost 0.89% and Britain's FTSE edged up 0.24%.
The dollar was this morning buying 86.65 US cents, up more than a cent from Friday.
TRADING THEMES TODAY
MIXED LEADS: Global share markets have recovered a long way since I last put one of these wraps together and are now back at levels where fresh catalysts are likely needed. The October US jobs report was solid, neither strong enough to raise fears of Fed intervention, nor weak enough to question the pace of the recovery. Investors shrugged and then sat on their hands. Saturday's Chinese trade report also appeared mixed, but the devil is often in the details. We are due another slug of Chinese data at 12.30pm EST today in the form of October inflation data. Back home, monthly home loans are due at 11.30am EST.
