Market wrap: Local stocks are primed for a third consecutive strong session after Wall Street's blue chips ran to a new 2009 high overnight.
The promise of low interest rates in the U.S. and global stimulus efforts continuing for some time to come helped the Dow Jones Industrial Average close 204 points or 2.03% higher at 10,227. The broader S&P 500 fared even better, climbing 2.22%, and the Nasdaq added 1.97%.
American investors drew fresh strength from the weekend's G20 meeting, where finance ministers agreed that stimulus efforts should continue. "You don't want to be left out of a market where you're seeing the prospects for substantially higher earnings, low interest rates and ample liquidity," said a portfolio manager quoted on MarketWatch. "You don't want to be left out of that because stocks are likely to head higher in that environment."
There were healthy gains for most US sectors. Standouts included: REITS +4.74%, banks +3.7%, precious metals miners +3.99%, natural gas companies +2.71% and tech stocks +2.39%.
The major European markets rallied for a fourth day. Britain's FTSE gained 1.8%, Germany's DAX 2.4% and France's CAC 2.11%.
Gold futures continued their record run. The spot price added $6 to trade recently at $1102.90 an ounce. Crude oil benefitted from weakness in the US dollar and threatening tropical storms in the Gulf of Mexico. Crude futures were recently up 2.5% at $79.30 a barrel.
Base metals were less convincing, despite a modest gain for copper. In London, copper rose 0.72% but aluminium slipped 0.16%, lead -1.88%, nickel -1.75%, tin -1% and zinc -0.95%.
Futures traders expect our market to put in a third straight strong session today. The SPI futures index closed 78 points higher at 4762.
TRADING THEMES TODAY
FULL STEAM AHEAD: With the Dow at a new 2009 high, the recent short, sharp correction is clearly over. Our market fell further from its high-point and has more ground to make up in the days ahead, even allowing for today's bright open. I'm looking to pick up a few laggards today and hoping to hold for a few days at least - provided the data out of China tomorrow is supportive.
BURNT SHORTS: Anyone who bet that the recent market wobble would turn into something more serious will be very nervous today. Short-sellers who didn't cover yesterday will be obliged to do so today and we should see some big short-covering bounces, similar to ALL yesterday (well called gordongreggy).
ECONOMIC NEWS: NAB's local business confidence data for October is due at 11.30 am today. Also this morning: RBA official John Broadbent makes a speech at 10 am. It's a low-key night in the US with consumer confidence data and a consumer "economic confidence" survey the main events.
