Morning traders. Thanks loungers, especially @Ravgnome.
Outlook for the day: Modestly positive for the last session of the financial year
ASX futures: up 12 points or 0.17%
Overnight themes:
- The Dow and S&P 500 rise after the major banks pass Federal Reserve stress tests. The Nasdaq finishes flat as upbeat economic data points to further rate hikes, fuelling a rally in treasury yields.
- The S&P 500 banks index climbs 2.6% after major lenders breeze through the annual Fed stress test. The tests are designed to ensure lenders have enough capital to endure a major economic setback. All 23 tested banks pass.
- The odds on a rate hike next month reach 86.8% after jobless claims decline and GDP is revised higher. First-time claims for unemployment benefits drop by 26,000 to 239,000, the biggest drop in 20 months. A separate report shows first-quarter economic growth was significantly stronger than first thought: Q1 GDP is revised to 2% from an initial estimate of 1.3%.
- "The upside surprise economic data has pushed yields higher today and the move higher has put some downward pressure on technology and growth stocks while supporting value and cyclical parts of the market" - Mona Mahajan, senior investment strategist at Edward Jones.
- The financial sector leads with a gain of 1.67%. Next best are materials +1.27% and energy +1.11%. Defensive and growth sectors trail.
- The prospect of higher rates helps drive gold to a 16-week low at US$1,900.60, before a partial rebound.The yellow metal settles at US$1,917.90 per ounce, a loss of US$4.30 or 0.2%.
Key events today:
- June private-sector credit - 11.30 am AEST
- China manufacturing, non-manufacturing PMIs - 11.30 am AEST
- US inflation (Personal Consumption Expenditures) - tonight
S&P 500: up 20 points or 0.45%
Dow: up 270 points or 0.8%
Nasdaq: unchanged
Dollar: up 0.25% to 66.15 US cents
Iron ore (Dalian): up 0.9% to US$114.71 (hits 15-week high)
Brent crude: up 31 US cents or 0.4% to US$74.34
Gold: down US$4.30 or 0.2% to US$1,917.90
NYSE Arca Gold Bugs: up 1.2%
Copper (LME): down 0.99% to US$8,173
Nickel (LME): up 3.07% to US$20,645
Global X Lithium & Battery Tech ETF: up 0.41%
BHP: up 0.66% (US); down 0.15% (UK)
Rio Tinto: up 0.58% (US); down 0.1% (UK)
