Market wrap: A modest advance on Wall Street should help the Australian share market snap its five-day losing streak but weaker commodity prices will restrict gains.
Futures traders expect our market to open in positive territory after rallies in Europe and the USA. The SPI futures index closed 26 points higher at 4640.
Wall Street was boosted by a dip in continuing unemployment claims and hopes for increased consumer spending. The Dow Jones Industrial Average rallied 0.67%, the S&P 500 gained 0.58% and the Nasdaq 0.33%.
The jobs report from the Labor Department showed a rise in claims for jobless benefits, but the number of continuing claims fell. In other economic news, the U.S. trade deficit narrowed by 7.6% in October. Imports rose by 0.4%, suggesting a small improvement in domestic demand.
"The economic data we're seeing really underscore how industries and markets are continuing to repair themselves," said a senior bank portfolio strategist quoted on MarketWatch.
The US dollar index, which tracks the greenback against a basket of major currencies, was under pressure early in the day but recovered to trade near flat. The dollar and commodities prices have had a strong inverse relationship in recent trading.
Oilers, natural gas companies and consumer stocks rallied in the US, but gold miners, financials, REITs and insurers lost ground.
European markets managed their first advance this week despite Portugal joining Spain, Greece and Dubai on a lengthening credit ratings danger list. Britain’s FTSE rose 0.78%, Germany’s DAX 1.08% and France’s CAC 1.09%.
Crude oil futures fell for the seventh straight session, dipping below $70 a barrel for the first time in two months before paring losses to trade recently at $70.48, down just 0.2%. In stark contrast, natural gas futures surged more than 8% to their highest level in 11 months after a surprisingly large fall in US inventories flagged recovering demand as winter hardens.
The gold price has essentially tracked sideways for three days, recently trading $3.50 higher at $1,131.60 an ounce. Copper continued its longest losing run since May, sliding 2.2% in London as stockpiles climbed to their highest level since April. Aluminium and nickel also fell but there were small gains for lead and zinc.
TRADING THEMES TODAY
CHINA: Hopes for a winning end to this long losing week probably rest on our major trading partner, which releases its monthly bumper-load of economic data at 1 pm today. Any hint of a slowdown would dent confidence in our resources sector. Industrial production is the key figure, running at 16.1% last month and with consensus expectations of 18.2% this time. There will also be data on the trade balance, CPI, PPI, retail sales and new loans.
ECONOMIC NEWS: Nothing scheduled locally today but China (see above) is a potential market-mover. Tonight in the US, all eyes will be on the monthly retail sales. Also due: consumer sentiment, monthly business inventories and inflation expectations.
