Outlook for the day: Negative. Aussie shares face early selling pressure following a record close on Friday and a mixed night on Wall Street.
ASX futures: down 49 points or 0.56%
Friday/weekend themes:
US stocks closed mixed and with minimal change on Friday following reports that President Donald Trump wants higher tariffs on the European Union.
The S&P 500 gave up early gains to finish barely changed, down less than a point or 0.01%. The Nasdaq Composite edged up 0.05% as the major indices recovered from session lows. The Dow posted a loss of 142 points or 0.32% as poorly-received trading updates from 3M and American Express weighed.
Stocks gave up early gains after the Financial Times reported Trump wanted a minimum tariff of 15% to 20% in any deal with the EU. A tariff on that scale would be unlikely to be acceptable to European negotiators. The US president has previously threatened a tariff of 30% on all EU imports if a deal is not signed before August 1.
The session's economic data showed Americans were less worried about tariffs reigniting inflation. The University of Michigan's consumer sentiment index climbed 1.8% to 61.8, its highest reading since February.
Earnings season continued to meet expectations, despite some high-profile misses last week. On Friday, Dow components 3M and AmEx lost 3.65% and 2.35%, respectively. 3M downgraded its sales outlook, warning tariffs would be felt more in the second half of he year. Netflix sank 5.1% despite bearing earning forecasts.
Crypto stocks were lifted by the passing in the House of a bill that establishes a regulatory framework for cryptocurrencies. Gainers included Coinbase and Robinhood Markets.
A split market saw solid sector gains for utilities and consumer discretionary stocks, modest gains for materials, real estate and financials, and losses across the rest of the market. Energy was the biggest drag, losing 0.96%.
Iron ore edged to its strongest close in four and a half months in China as a crackdown on overcapacity in the steel industry encouraged hopes of improved steel margins. Benchmark ore on the Dalian Commodity Exchange ended daytime trade 0.38% ahead at US$109.34 a metric ton, extending its advance for the week to 3.66%. Singapore ore also had a positive week, gaining 1.38% despite a 0.18% dip on Friday.
Lithium prices continued their recent recovery following news last week that a major Chinese mine had suspended operations due to oversupply concerns. Battery-grade lithium carbonate rallied 2.59% on the Shanghai Metals Market on Friday. Prices hit a three-month higher earlier in the week, prompting renewed interest in US-listed miners. The Global X Lithium & Battery Tech ETF firmed 1.76% to its highest since February.
London copper rose to its highest in a week after China's commerce minister fuelled hopes of a trade deal with the US, saying Beijing wants to put trade back on a stable footing. Benchmark copper on the London Metal Exchange climbed 1.16% to US$9,778.50 per metric ton during a positive session for industrial metals. Nickel, aluminium, zinc, lead and tin posted gains of between 0.81% and 2.98%.
A retreat in the US dollar encouraged investors to buy Thursday's dip in gold. Spot gold was this morning ahead US$10.70 or 0.32% at US$3,349.44 an ounce. US gold futures settled US$13 or 0.4% higher at US$3,358.30 on Friday. "Concerns around growth in U.S. debt and further tariff updates are likely to keep gold in focus, and for now the floor looks well supported," Suki Cooper, Precious Metals Analyst, Global Research at Standard Chartered Bank, told Reuters.
Key events this week:
US earnings season: General Motors, Coca-Cola, Lockheed Martin (Tue); Tesla, Alphabet, IBM (Wed); and Newmont, Intel, Dow (Thu).
Minutes from this month's RBA policy meeting - Tuesday
Address by US Federal Reserve Chair Powell - Tuesday
US home sales - Wednesday
Flash manufacturing and services PMIs - Thursday
Speech by RBA Governor Bullock - Thursday
US flash manufacturing and services PMIs - Thursday
US durable goods - Friday
S&P 500: down 1 point or 0.01%
Dow: down 142 points or 0.32%
Nasdaq: up 10 points or 0.05%
VIX: down 0.67% to 16.41
US 10-year treasury yield: 4.423%
Dollar: up 0.25% to 65.2 US cents
Iron ore (Dalian): up 0.38% to US$109.34
Brent crude: down 22 US cents or 0.3% to US$69.30
Gold (futures): up US$13 or 0.4% to US$3,358.30
Gold (spot): up US$10.70 or 0.32% to US$3,349.44
Silver (spot): up 1 US cent or 0.02% to US$38.16
Palladium (spot): down US$31.50 or 2.39% to US$1,286.50
Antimony (China ore): down 0.03% to US$19,787
NYSE Arca Gold Bugs: down 0.36%
Bitcoin: up 0.34% to US$117,970
Copper (LME): up 1.16% to US$9,778.50
Nickel (LME): up 0.81% to US$15,218
Lithium carbonate (China spot battery grade): up 2.59% to 8,191 yuan
Global X Lithium & Battery Tech ETF: up 1.76%
Uranium (spot): up 0.36% to US$71
Global X Uranium ETF(URA): up 1.26%
BHP: up 0.29% (US); 0.73% (UK)
