Morning traders. Many thanks to @taughtbuffet,@Seb93 and@babystepsfor keeping these threads ticking over while my kids dragged me around the Edinburgh Festival. Every other show featured Australians, so I didn't have a chance to get homesick.
Overnight round-up and day ahead:
Aussie stocks are set to gap higher after reports of German stimulus plans triggered a relief rally on Wall Street.
The SPI 200 index futures contract bounced 41 points or 0.6 per cent to 6395 ahead of a big week of domestic corporate earnings. The local market has been rattled by a two-week rout in global shares as the US-China trade war intensified and bond markets sent recession signals. The ASX 200 ended last week 2.7 per cent lower despite a near-flat finish on Friday.
US stocks pared their loss for the week on Friday after a report of German government plans to avoid recession helped raise US bond yields off three-year lows. The S&P 500 rebounded 41 points or 1.44 per cent as investors seized on a scrap of positive news at the end of a torrid week when the index fell 1.03 per cent. The Dow rose 307 points or 1.2 per cent, its second straight gain, but lost 1.53 per cent over a third week of losses. The Nasdaq gained 129 points or 1.67 per cent on the day.
With the US quarterly earnings season winding down, attention will switch this week to the annual gathering of central bankers at the Jackson Hole Economic Policy Symposium in the US, beginning on Thursday. Investors will look for signs that central banks have more tools in their arsenal after soft economic data from China and Germany last week fuelled fears of a global recession. The yield on 10-year US treasuries fell below the two-year yield on Wednesday for the first time since 2007, a classic recessionary signal.
Back home, the domestic earnings season is in full swing, with updates due this week from the likes of BHP, Qantas, Coles, Dominos, Medibank and Flight Centre. Companies due to report today, according to Bloomberg, include Bluescope Steel, Beach Energy, GWA Group, Lendlease Ground and NIB Holdings.
BHP, which is due to report tomorrow, ended last week at a six-month low despite a bounce in the price of iron ore on Friday. The spot price at China's Tianjin port rallied 75 cents or 0.8 per cent to $US89.55 a dry tonne, paring a heavy weekly loss of $US5.25 or 5.5 per cent. BHP continued to lose ground in overseas trade, falling just under 1 per cent in both New York and London trade. Rio Tinto's US stock dipped 0.31 per cent and its UK stock 0.52 per cent.
Oil was one of the few risk assets to record a gain for last week. Brent crude ticked up 41 cents or 0.7 per cent to $US58.64 a barrel for a weekly gain of 0.2 per cent. Crude fell into a bear market earlier this month as fears of a global recession overwhelmed concerns over tensions in the Middle East.
Gold - a traditional safe haven - has been one of the big winners of the three-week plunge in risk assets, but eased a fraction on Friday. Gold for December delivery settled $7.60 or 0.5 per cent off Thursday's six-year peak at $US1,523.60 an ounce.
Appetite for industrial metals remained depressed by the gloomy outlook for global growth. Tin slumped 3.3 per cent to a three-year low. London copper eased 0.1 per cent, lead 1.2 per cent, nickel 0.3 percent and zinc 0.1 per cent. Aluminium bounced 0.6 per cent.
The dollar opened this morning at 67.82 US cents, ahead less than a tenth of a cent.
Looking beyond Jackson Hole and the domestic earnings season, this week brings the minutes from the last Reserve Bank policy meeting tomorrow morning, followed by the minutes from the last US Federal Reserve meeting on Wednesday morning. The week heats up on Thursday with the release of a slew of manufacturing data from the US, Europe, Japan and Australia, just as the Jackson Hole Symposium gets underway.
Breakfast
Today is National Soft Ice Cream Day. (Presumably for those who aren't tough enough to handle hard ice cream. Pfff! Softies.)
