Morning traders. Thanks loungers, especially @Ravgnome.
Outlook for the day: Neutral/mildly positive ahead of a Reserve Bank interest rate decision and press conference this afternoon.
ASX futures: up 3 points or 0.03%
Overnight themes:
Megacap growth stocks steer Wall Street higher at the start of a week of central bank meetings.
The Nasdaq outpaces the other US benchmarks with a rise of 0.82%, thanks to Tesla, Alphabet, and Meta.
The S&P 500 rallies 0.63%, breaking a three-session losing run. The Dow trails, adding 0.2% as Boeing and healthcare stocks weigh.
Alphabet jumps 4.6% on reports that Apple wants Google's AI engine for the iPhone. Tesla surges 6.31% after announcing price increases in Europe. A 5%+ rally in Nvidia dwindles to 0.7% by the market close as the firm's annual developer conference gets underway.
“Today’s flavor is a rotation into tech. We’re in this seasonally weak period and people don’t know really what to do, so they’re kind of alternating between selling tech and selling the rest of the market” - Jay Hatfield, founder and CEO of Infracap (per CNBC).
The Federal Reserve starts a two-day policy meeting tonight that leads to a rate statement and press conference on Wednesday night. Futures trading indicates a 99% probability that the central bank will leave the federal funds rate target unchanged. The odds on a June cut have drifted down to 55% following warmer-than-expected inflation data last week.
Growth sectors outperform. Communication services pops 2.95%, consumer discretionary 0.62% and tech 0.51%. Also notable: consumer staples +0.82% and financials +0.5%. The real estate and health sectors finish narrowly in the red, both down 0.02%.
Oil rises to its highest since late October as drone strikes by Ukraine shut Russian refining facilities. Brent crude climbs 1.8% to US$86.89 a barrel, a level last seen on October 31.
“Preliminary estimates suggest that approximately 15% of Russia’s refining capacity has been disrupted in recent days, potentially leading to a short-term decrease in crude oil exports as authorities seek to mitigate the impact of the disruptions” - Stephen Innes, managing partner at SPI Asset Management (per MarketWatch).
A sharp decline in shipments last week helps iron ore rebound from Friday's near seven-month low. Total shipments from Australia and Brazil dropped 12.5% last week from the week before, according to Mysteel. China-traded ore bounces 0.9%.
The Reserve Bank concludes a two-day policy-setting meeting with the announcement of the cash rate target at 2.30 pm this afternoon and a press conference an hour later. While no change is expected to the cash rate target today, investors will look for any change in the accompanying statement for guidance to when rate cuts might start.
Key events today:
RBA interest rate decision - 2.30 pm AEDT
RBA press conference - 3.30 pm
US building permits, housing starts - tonight
S&P 500: up 32 points or 0.63%
Dow: up 76 points or 0.2%
Nasdaq: up 130 points or 0.82%
Dollar: up 0.01% to 65.58 US cents
Iron ore (Dalian): up 0.9% to US$111.56
Brent crude: up US$1.55 or 1.8% to US$86.89
Gold: up US$2.80 or 0.1% to US$2,164.30
NYSE Arca Gold Bugs: down 0.97%
Bitcoin: down 2.09% to US$67,085
Copper (LME): up 0.33% to US$9,102
Nickel (LME): down 0.47% to US$17,830
Uranium (spot price): up 0.29% to US$86
Lithium carbonate (China spot): up 0.13% to US$15,623
