Market wrap: A strong night for commodities helped Wall Street crawl higher in thin pre-holiday trade and set up a green open for local stocks today.
The U.S. dollar plumbed 14-month lows overnight, driving a fresh wave of buying in gold, oil and base metals. Gains for oilers and miners pushed the major U.S. stock indexes close to their 2009 highs ahead of tonight's Thanksgiving Day holiday. The Dow added 0.29%, the S&P 500 0.45% and the Nasdaq 0.32%.
The overnight economic data largely topped economists' forecasts. Reports on consumer spending, consumer sentiment, personal income, jobless claims and new-home sales came in better than expected and a record auction of 7-year US Treasury notes met with strong demand. But not all the news was good. Demand for long-lasting goods fell last month and capital spending by businesses slumped.
U.S. gold miners rallied strongly, sending the sector index up 2.67%. Also strong: natural gas companies +2.08%, airlines +1.62%, pharmaceuticals +1.07% and oilers +0.95%. Financial sector indexes were marginally softer.
The major European markets recovered yesterday's modest losses. Britain’s FTSE gained 0.77%, Germany’s DAX 0.58% and France’s CAC 0.65%.
The sliding US dollar and reports that India may buy gold from the IMF helped the precious metal surge to a new high and extend its winning run to nine sessions. The spot price was recently trading at $1,189.90 an ounce, a rise of around 2%.
The oil price was boosted by a smaller-than-expected weekly rise in U.S. inventories. Crude oil futures jumped 2.55% to $77.85 a barrel. Copper climbed towards a 14-month high as most base metals recorded solid gains. In London, copper advanced 1.53%, aluminium 1.04%, lead 2.53%, nickel 1.04% and zinc 2.77%. Tin slipped 1.32%.
Futures traders expect our market to open in the green. The SPI futures index closed 24 points higher at 4759.
TRADING THEMES TODAY
GOLD: Nine straight winning sessions and another record high overnight. The US dollar at 15-month-lows against major international currencies. Who knows where this is going. One note of caution: the long-term chart looks to be going parabolic. This is the time for the greatest and fastest gains, so you gotta have some skin in the game - the rewards can be immense. However, these runs are often followed by dramatic pullbacks, so it pays to be alert for the inevitable downturn. In the short-term, all looks good.
ECONOMIC NEWS: The Australian Bureau of Statistics releases quarterly private capital expenditure figures at 11.30 am. These offer a useful insight into the health of the economy. U.S. markets are closed tonight for the Thanksgiving Day holiday and also close at 1 pm New York time tomorrow night.
