Morning all
Thanks regulars
The ASX is set for a soft opening after a stellar rally as energy and material stocks dragged Wall Street lower overnight.
Mar. SPI futures are off 38 points at 5017
Earlier European markets played catch up to the Fed rate rise.
DAX +2.5%
FTSE +.65%
U.S. stocks fell on Thursday following three days of gains as energy and materials shares tracked declines in prices of crude oil and metals.
Crude oil prices resumed their slide after gaining earlier in the day, on persistent oversupply worries and as the dollar .
U.S. crude CLc1 fell as much as 2.5 percent and traded below $35 a barrel while Brent traded near a seven-year low hit earlier this week.
Newmont Mining led declines on the materials index .SPLRCM, falling 7.3 percent to $17.67.
"I think what we’re going to see through the end of the year is a refocus on oil and commodities," said Karen Hiatt, senior portfolio manager at Allianz Global Investors in San Francisco. "The market is still continuing to want to migrate toward more defensive, more visible earnings-type companies or sectors."
While the Fed's decision took some uncertainty out of the market, Hiatt said that volatility, historically, tends to rise after a Fed rate hike.
Fed Chair Janet Yellen's assurance that further tightening would be gradual boosted stocks on Wednesday. However, investors remain concerned about weak global economic conditions as the slide in commodity markets continues unabated and demand slows.
"Investors continue to struggle with the notion of the strength in the U.S. economy, in the context of this performance within global conditions that are mixed at best," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
S&P 500 -1.5%
Nasdaq -1.2%
The AUD took a nice dive in response to the interest rate increase as the US dollar rallied on the news.
AUD 71.23 -1.55%
Oil prices fell as much as 2 per cent, with Brent trading near 11-year lows, as data showing fresh supply builds at the delivery point for US crude futures added to worries about a global glut.
Market intelligence firm Genscape reported an inventory increase of 1.4 million barrels at the Cushing, Oklahoma delivery hub for the US crude's West Texas Intermediate (WTI) futures, traders who saw the data said.
"Bearish fundamentals are hanging over the oil markets like storm clouds, with no break in sight or relief in the near future," said Chris Jarvis, founder of Caprock Risk Management, an oil market consultancy in Frederick, Maryland.
Oil $34.83 -.69
The biggest rout in industrial metals since the financial crisis is set to deepen as mining companies fail to cut production enough to make up for slowing demand, according to Citrine Capital Management.
"We could make fresh multi-year lows across metals in the next six months," Paul Crone, founder of Citrine, said in an interview this week.
A London Metal Exchange index tracking the price of copper, aluminium, nickel, zinc, lead and tin fell last month to a six-year low. The gauge is down 26 per cent in 2015, set for the worst annual performance since 2008 and highlighting the struggles to remain profitable for metal producers including BHP Billiton, Rio Tinto Plc and Glencore.
"We could make fresh multi-year lows across metals in the next six months," Paul Crone, founder of Citrine, said in an interview this week.
"I don't see an uptick in real demand in the very short- term," he said. "China is worse than the market had anticipated."
Base metals had a grim night.
Copper -1.4%
Nickel -2%
Aluminium -1.1%
Zinc -1.6%
Lead -3.2%
Gold and silver prices ended the U.S. day session sharply lower Thursday. A very strong rally in the U.S. dollar index on this day put sharp downside price pressure on the precious metals markets. The other key “outside market” was also in a bearish posture for the metals today, as crude oil prices were lower and are back down near their recent contract and multi-year lows. February Comex gold was last down $27.20 at $1,049.50 an ounce.
HUI -7%
AUD Gold $1476
Have a good day
Reuters, SMH, *****
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