Market wrap: Local stocks are expected to launch the week with modest gains after Wall Street inched to a ninth advance in 11 sessions.
The SPI futures index closed 7 points higher at 4690 on Saturday morning, pointing to a positive but muted opening today. However, a softening in the prices of key resources may weigh on sentiment.
American stock indexes crept north on Friday to complete weekly rises of around 2.2 - 2.5% on further evidence of economic recovery. On Friday, the Dow advanced 0.37%, the S&P 500 rose 0.26% and the Nasdaq 0.29%. Consumer stocks were strongest on the day, according to MarketWatch, but precious metals miners were weak, down 1.79% as the price of gold wavers above US$1,000.
European markets were mixed. The FTSE advanced 0.17% on gains among property companies and pharmaceuticals but France's CAC lost 0.19% and Germany's DAX faded to a loss of 0.48%.
Gold futures retreated for a second session in volatile trade as the US dollar strengthened and various options expired. The spot gold price closed at $1006.50, down $6 or 0.6%.
Crude oil futures and base metal prices were undermined by the rising dollar. Crude oil lost 0.6% to finish at $71.89 a barrel. Rising stockpiles sent copper prices down 3.3% in London and there were modest losses for aluminum, zinc, nickel, tin and lead.
TRADING THEMES THIS WEEK
PROPERTY TRUSTS: This was the standout sector in our market last week, as Redbacka pointed out in his excellent weekly snippets (Post #: 4509234). The XPJ stacked on 5.15% in five weeks, fired by significant gains for the likes of MGR, SGP, GPT and MCW. Follow the heat. It's always worth sifting through "hot" sectors for laggards/breakout candidates.
DISCIPLINE: "Everything is overbought right now and that's a red flag, or at least a yellow light," said one US analyst quoted on MarketWatch. "That doesn't mean sell. It's just more a time to hold what you have and see where things go." This extraordinary bull rally just keeps going and you have to stick with the trend as long as it lasts. However, the longer the rally goes, the more important it is to stick to your stop losses and trading discipline. Mistakes in a "mature" rally can be very expensive.
ECONOMIC NEWS: It's a thin week for local economic news but there's plenty of potential market-movers in the US. Data on local new motor vehicles sales last month is due at 11.30 am today. Local job vacancy numbers are due on Wednesday. On Thursday, the RBA releases its half-yearly Financial Stability Review which should clarify the outlook for interest rates. In the US: leading indicators (tonight), manufacturing and house prices (Tuesday night), Federal Reserve rate decision (Wednesday night), existing home sales (Thursday night), durable goods orders, consumer confidence and new home sales (Friday night).
