Morning traders.
Market wrap: the month-long global rally faces a reality check this week as the US earnings season gets underway. The major US indexes squeezed out gains of 0.5 - 1.2% in choppy trading on Friday to complete the Dow's best four-week percentage gain since 1933. The question this week is, will earnings announcements justify the re-rating of share prices?
Friday's US gainers included REITs (index up 8%) and banks (3.5% - 5%). Gold miners were sold off as the spot price slumped below $900, recently trading near $894. Oil jagged around near recent highs, finishing 0.25% down at $52.50.
Base metals were very bullish, with most breaking to new recent highs or pushing up to breakout levels. Copper rallied 6% and is now up 50% from its lowest point. Zinc, lead, nickel and aluminium were all up 2.5 - 3%.
Futures traders expect a third day of gains here. The SPI closed up 33 points at 3773.
There's not much to dislike in that lead-in to today's trading - resource prices improving, US banks and REITs up, the SPI up - but how much magic pudding is left in this rally after four weeks of exceptionally strong gains? Global markets look overbought in the short term, but I guess exceptional circumstances produce exceptional moves in both directions.
Good luck to all.
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