Market wrap: Australian shares look likely to open higher after Wall Street shrugged off weak economic reports and edged higher overnight.
Futures traders expect our market to open at a modest premium to yesterday's close. The SPI futures index closed 17 points higher at 4896 after modest gains in the U.S.
The Nasdaq set the pace in the States, climbing 0.38% ahead of Intel's Q4 earnings report (see below for more). The Dow added 0.28% and the S&P 500 0.24% in cautious trade as traders resisted placing big bets before earnings reports from several "bellwether stocks" over the next few sessions.
Consumer stocks fell after an unexpected drop in U.S. retail sales in December. Sales slipped a seasonally adjusted 0.3%, well short of economists' expectations of a rise of 0.5%. Also harming sentiment were weak jobless numbers. However, traders were cheered by the news that business sales jumped 2% in November, the largest gain in two years.
The market's gains were led by tech stocks, financials and health stocks. Resource stock indexes were mostly flat, despite gains for key commodities.
A softer U.S. dollar helped gold edge higher. The spot priced rose $5.70 to trade recently at $1,142.80 an ounce. However, crude oil was pressured by the disappointing U.S. economic reports. Crude futures fell for a fourth straight session, recently down 0.45% at $79.26 a barrel.
Base metal prices continued to recover from a slump earlier in the week after China moved to dampen its booming economy. In London, copper edged 0.05% higher and there were gains for aluminium +2%, lead 0.6%, nickel 0.8%, tin 1.7% and zinc 0.9%.
Rising mining stocks helped European markets build modest gains. Britain's FTSE rose 0.45%, Germany's DAX 0.43% and France's CAC 0.37%.
TRADING THEMES TODAY
BIOTECHS: No question where the heat was in the market yesterday. ADO rocketed an extraordinary 400% and there were significant gains for TDX, OBJ and RHT. Is there any fuel left in the tank? Any other candidates? PRR? STI? BPH? (Disclosure: no holdings in any of these.) A quick side-note to newer traders: biotechs benefit from brief bursts of enthusiasm that tend to evaporate as suddenly as they appear. Enjoy it while it lasts but don't get left holding the bag when the circus moves on.
INTEL (PART 2): My apologies for being a day early with this yesterday. The tech giant is due to release its fourth-quarter result after this morning's closing bell. The result carries particular significance because I.T. was the best-performing sector in the U.S. last year and Intel is the first of the bellwether tech stocks to report. U.S. futures will indicate how the result has been received and point to how tonight's U.S. trade is likely to fare.
ECONOMIC NEWS: Nothing on the local calendar today but plenty happening in the States tonight: December consumer price index, December industrial production, December capacity utilisation, January manufacturing and January consumer confidence.
