Outlook for the day: Aussie stocks look set to recoup much of yesterday's 139-point loss following a swing session on Wall Street.
ASX futures: up 67 points or 0.85%
Overnight themes:
US stocks hit a six-month low before mostly recovering in volatile trade ahead of tomorrow's "Liberation Day" tariff announcement.
The S&P 500 posted a gain of 0.55% after falling as much as 1.7% in early action, briefly re-entering correction territory. The Dow put on 418 points or 1% as all but five of its thirty component companies finished higher. The Nasdaq trimmed a sharp early loss to 0.14% as rebounds in Apple and Alphabet helped offset further weakness in Tesla and Nvidia.
Stocks opened deep underwater after President Donald Trump said tomorrow's Liberation Day tariffs will encompass all nations. The announcement dashed hopes that the plan to impose reciprocal tariffs on all trading partners had been watered down. Last week, Trump suggested the tariffs would not be as onerous as first indicated.
“We continue to trade with the backdrop of tariff uncertainty and a shroud of secrecy about what may come next. As a result, investors sell first and wait. It has all the makings of a panic sell-off where a snap back rally [sits] on the horizon” - Jay Woods, chief global strategist at Freedom Capital Markets (per CNBC).
The volatility index continued higher. The VIX was lately up 2.86% at 22.27.
Banks, consumer staples and miners found buyers during the turnaround. The S&P consumer staples sector firmed 1.63%, financials 1.25% and materials 1.07%. The night's only drag was consumer discretionary -0.18%.
The session-long recovery came as the curtain fell on a losing month and quarter for the major indices. The S&P 500's 5.8% loss for the month was the heaviest since December 2022. For the quarter, the S&P 500 shed 4.6%, ending a run of five straight positive quarters. The Nasdaq suffered its worst quarter since 2022, falling 10.4%.
Gold's spectacular run continued with a new high above US$3,100 an ounce, extending a rally that looked set to the hand the yellow metal its best quarter since 1986. Gold futures settled US$36 or 1.2% higher at US$3,150.30. The spot price was lately ahead US$39.29 or 1.27% to US$3,123.64 after hitting a new all-time high at US$3,128.06.
"The ongoing uncertainty regarding tariffs has affected equity markets and brought another round of safe-haven buying into the gold market. There are certain technical areas of resistance along the way that could cause a little profit-taking or pullback. But the ongoing bullish trend remains in place. The fundamental underpinnings remain in place" - David Meger, director of metals trading at High Ridge Futures (per Reuters).
Iron ore fell in China for a second session following reports of steelmakers voluntarily cutting steel production ahead of a formal order from Beijing. The central government has flagged plans to reduce overcapacity in the steel sector, but has yet to make an announcement. Benchmark ore retreated 1.47% on the Dalian Commodity Exchange to US$106.59 a metric ton. The Singapore exchange was closed for a holiday.
Copper slid to a two-week low as traders continued to book profits on recent strength ahead of tomorrow night's US tariff announcement. Benchmark copper declined 1.07% on the London Metal Exchange to US$9,690 a metric ton. The US benchmark resumed its retrace from last week's all-time high, falling 1.43% on Comex to US$5.057 a pound. The gap between the two benchmarks has shrunk in recent sessions, reducing the opportunity for arbitrage plays. "I think the fact that the arbitrage window has closed, or is closing, brings the risk that the Comex contract could suddenly see significant further weakness," Ole Hansen, head of commodity strategy at Saxo Bank, told Reuters.
Oil rallied following news that US crude production declined to its lowest in 15 months and as Trump threatened to curb Russian exports. US production contracted by 305,000 barrels a day, according to the US Energy Information Administration. Trump said he was considering secondary tariffs against Russia if it continues to reject a ceasefire with Ukraine. Brent crude settled US$1.11 or 1.51% ahead at US$74.74 a barrel.
The Reserve Bank of Australia concludes a two-day policy meeting today and is scheduled to update the market at 2.30 pm AEDT. While the central bank is widely expected to leave its key rate on hold at 4.1%, economists expect it to lay the groundwork for a cut next month.
Key events today:
February retail sales - 11.30 am AEDT
RBA rate announcement - 2.30 pm
RBA press conference - 3.30 pm
US manufacturing PMI - tonight
US job openings - tonight
S&P 500: up 31 points or 0.55%
Dow: up 418 points or 1%
Nasdaq: down 24 points or 0.14%
VIX: up 2.86% to 22.27
US 10-year treasury yield: down 1 point to 4.229%
Dollar: down 0.55% to 62.48 US cents
Iron ore (Dalian): down 1.47% to US$106.59
Brent crude: up US$1.11 or 1.51% to US$74.74
Gold (futures): up US$36 or 1.2% to US$3,150.30
Gold (spot): up US$39.29 or 1.27% to US$3,123.64
Silver (spot): down 4 US cents or 0.13% to US$34.05
Palladium (spot): up US$18.50 or 1.92% to US$984.50
Antimony (China ore): up 1.14% to US$23,355
NYSE Arca Gold Bugs: up 0.33%
Bitcoin: up 0.21% to US$82,709
Copper (LME): down 1.07% to US$9,690
Nickel (LME): down 2.27% to US$15,945
Lithium carbonate (China spot battery grade): down 0.11% to 9,001 yuan
Global X Lithium & Battery Tech ETF: down 1.45%
Uranium (spot): steady at US$64.38
Global X Uranium ETF(URA): down 0.78%
BHP: down 0.78% (US); down 2.45% (UK)
