Market wrap: A bright start to the trading day lies ahead after a good night for resources and modest advances on overseas equity markets.
Energy, materials and financial stocks helped Wall Street push back towards recent highs. The S&P 500 advanced 0.66%, the Dow 0.52% and the Nasdaq 0.39% as the Federal Reserve began its two-day interest-rate committee meeting.
The S&P Bank Index advanced 2.34%, oil and gas companies rose 1.5 - 2.5%, gold/silver miners were up 2.31% and REITs put on 3.31%. Airlines and biotechs finished in the red.
In US economic news, house prices in the US rose 0.3% month-on-month in July, the third monthly increase this year, but have essentially remained flat since January. But there was healthy demand for a US two-year treasury note auction. The bid-to-cover ratio of 3.23 was well above the 2.98 average of the last four auctions.
European markets flew out of the blocks but surrendered much of the day's gains before the close. London's FTSE added 0.16%, France's CAC 0.3% and Germany's DAX 0.72%.
Crude oil futures rebounded back above US$71 a barrel, helped by a falling US dollar and expectations of shrinking US stockpiles. Crude was recently 2.64% higher at $71.55. The sliding dollar helped gold futures eradicate several days of decline. The spot price was recently up more than $10 or 1% at $1014.60.
Base metals enjoyed a healthy rally, despite concern that prices have outpaced demand. In London, copper rose 1.21%, lead 3.84%, nickel 2.73%, aluminium 0.05%, zinc 0.94% and tin lost 1.18%.
Futures traders expect the improved outlook for resources to get our market off to a positive start. With 25 minutes left to trade, the SPI futures index was up 21 points at 4708.
TRADING THEMES TODAY
ADVANCE AUSTRALIA FAIR: The bounces in Europe and the US overnight aren't very compelling but healthy gains on commodity markets have set us up for a positive session. A good lead from the futures means it's a day for breakout trades.
NICKEL: It's been a rough month for nickel miners with stockpiles in London rising and the metal price tumbling but last night's action might be the turning point. A higher high following a higher low is hinting at a short-term bottom for the price of nickel. Check out Kitco's nickel charts here: http://www.kitcometals.com/charts/nickel_historical.html
ECONOMIC NEWS: Local skilled job vacancy numbers are released at 11.30 am today, offering clues to the unemployment situation. The US Federal Reserve delivers its rate interest decision tonight. No changed expected, but investors will look for hints of a tightening bias and clues to the timetable for rises.
