Morning traders. A million thanks to the crew who kept the threads ticking over last week while I blew a year's earnings trying to entertain bored teenagers.
Outlook for the day: Marginally positive following a flat close on Wall Street and a mixed session for commodity prices heading into a US long weekend.
ASX futures: up 5 points or 0.07%
Friday themes:
Wall Street's main stock indices finish mixed but broadly positive as a new quarterly earnings season gets underway and signs of cooling wholesale inflation offset worries about hotter-than-expected consumer inflation data earlier in the week.
The S&P 500 and Nasdaq inch higher. A weak trading update from UnitedHealth drags the Dow into the red as trading winds down for the Martin Luther King Jr Day long weekend (NYSE, Nasdaq closed tonight).
Interest rate worries are assuaged by an unexpected decline in producer prices last month. The producer price index eases 0.1% in December. A revision to the November report means producer prices have now fallen for three straight months, clearing the way for the Federal Reserve to consider rate cuts. Market pricing on a March cut rises from 73.2% a day earlier to 79.5%, according to CME's FedWatch tool.
“The path continues to clear for the Fed to begin cutting interest rates in 2024 and to slow the pace at which they shrink their balance sheet” - Bill Adams, chief economist for Comerica Bank (per CNBC).
UnitedHealth sinks 3.37% as the cost of providing medical services increases more than expected. The decline knocks 120 points off the Dow. The news also drags other health insurers lower.
Most of the big banks fall after reporting Q4 earnings. Wells Fargo sheds 3.34%, JPMorgan Chase 0.73% and Bank of America 1.06%. Job cuts help Citigroup buck the trend with a rise of 1.04%. The S&P 500 Banks Index loses 1.27%.
Other notable falls on Friday include Delta Air Lines (-8.97%, profit downgrade) and Tesla (-3.67%, price reductions).
Energy, real estate and communication services are the pick of the sectors, gaining between 0.62% and 1.26%. Tech and materials also advance. The biggest drags are consumer discretionary -1.05%, health -0.29% and financials -0.23%.
Rising tensions in the Middle East lift oil and precious metals. Brent crude rallies 1.13% after the US and UK launch airstrikes on Houthi rebel targets in Yemen following weeks of Houthi attacks on Red Sea shipping. Gold surges 1.6%.
Iron ore falls for the sixth time in seven sessions amid reports of sluggish Chinese steel output this year. Consultancy Shanghai Metals Market reports scheduled rebar production has fallen 6.5% this month. China-traded ore drops 1.76% on Friday.
"Some [steel] mills have recently set up plans for a temporary reduction in production while a few others postponed the resumption of blast furnaces that had been under maintenance since December to stem the loss" - Shanghai Metals Markets.
Key events this week:
Job ads - 11.30 am AEDT
US public holiday (Wall Street closed) - tonight
Consumer sentiment - Tuesday
China industrial production, retail sales - Wednesday
US retail sales - Wednesday
December employment report - Thursday
US consumer sentiment - Friday
S&P 500: up four points or 0.08%
Dow: down 118 points or 0.31%
Nasdaq: up three points or 0.02%
Dollar: up 0.06% to 66.87 US cents
Iron ore (Dalian): down 1.76% to US$133.39
Brent crude: up 88 US cents or 1.13% to US$78.29
Gold: up US$32.40 or 1.6% to US$2,051.60
NYSE Arca Gold Bugs: up 2.81%
Bitcoin: down 0.96% to US$42,690
Copper (LME): down 0.53% to US$9,295
Nickel (LME): down 0.47% to US$16,343
Uranium: steady at US$95.50
Lithium carbonate (China spot): up 0.21% to US$13,420
Global X Lithium & Battery Tech ETF: down 1.56% (5-week closing low)
