Market wrap: The Australian stock market looks set for a robust start to the trading week after Friday's U.S. jobs report beat expectations and overseas markets rallied.
Local futures traders expect plenty of green at today's open. The SPI closed 38 points higher at 4465 after solid gains for European and north American equities. On Friday, the Dow advanced 1.03%, the S&P 500 rose 1.31% and the Nasdaq 1.79%. Germany's DAX fronted gains for major European indexes, rising 1.57%, followed by France, +1.27%, and the UK +1.15%.
Stocks rallied after Friday's U.S. non-farm payroll numbers showed a slightly smaller loss than expected, easing fears after data earlier in the week suggested the job situation was worse than anticipated.
But analysts warned that Wall Street looks "toppy" in the short term after completing its second losing week in eight. "This market has become saturated with good news and (the nonfarm payrolls report) suggested more healing," said one. "But the market is showing some real signs of fatigue, when this type of data a month ago would have led to a huge rally."
There was green across the boards in the U.S. on Friday, with gains for industrials 1.9%, banks +0.86%, biotechs +2.51%, airlines +2.92%, REITs 1.13%, precious metals miners +1.25% and oilers +1.4%.
Gold futures ended their best week in more than four months on the cusp of breaking US$1000. The most active contract, December gold futures, slid $1 to end at $996.70 an ounce in US trade. Crude futures jogged on the spot for a third session, finishing fractionally higher at $67.79.
Copper was little changed in US trade but completed its first losing week since mid-July. Zinc and lead hit 12-month highs but couldn't hold all of their gains. Nickel and aluminium were little changed but remained under downward pressure.
TRADING THEMES TODAY
LABOR DAY IN THE US: Markets in the US are closed tonight for the Labor Day public holiday, so Friday's healthy advance provides a welcome lead for the next two local trading sessions. Assuming there are no dramatic moves in Asia or Europe, that bodes well for the start of the week.
BREAKOUT TRADES: A healthy SPI should translate into new highs at the open for several stocks. When the lead from the SPI is strong, it's always worth looking for stocks set to break resistance at the open - these are good candidates for further advances during the day.
GOLD: Friday's trade in gold futures was uncertain after a week of big advances but US traders continued to buy gold miners on anticipation of a break through the US$1000 mark. News that the G20 meeting over the weekend agreed to retain stimulatory economic measures may add to concerns about inflation, increasing gold's appeal as an alternative investment.
