Market wrap: Rallying commodity prices and a strong night on Wall Street should drive the ASX 200 above 5000 for the first time in 18 months this morning.
With 25 minutes left to trade, the June SPI futures contract was ahead 31 points at 5036 after a fifth straight positive session on Wall Street.
The S&P 500 pushed through 1,200 for the first time since September 2008 overnight as earnings results from Intel and JP Morgan Chase fuelled gains in the technology and financial sectors. The S&P 500 rallied 13 points or 1.12% to 1,211. The Dow tacked on 104 points or 0.94% for its biggest gain this month and the tech-heavy Nasdaq surged 1.58%.
JP Morgan reported a 55% jump in profit, exceeding Wall Street's expectations. Intel also reported a leap in first-quarter earnings, offering strong signs that companies are starting to spend on technology. The market responded with big advances in the financial and technology sectors - banks +3.3% and semi-conductors +4.3%.
"Last quarter, when companies reported better-than-expected results, there was a lot of selling on the news," a U.S. portfolio manager told MarketWatch. "So it's impressive [that] the rally seems to have some staying power. It's signalling individual investors are returning to stocks."
Also helping market sentiment was a fifth straight rise in U.S. retail sales and a softening U.S. dollar. Sales rose a better-than-expected 1.6% in March. The U.S. dollar index, which measures the greenback against six major currencies, slipped 0.4% overnight, making dollar-denominated commodities cheaper for foreign buyers and sparking a rebound in oil and precious metals.
U.S. oil companies rallied 1.1% as crude oil futures bounced back from a five-session sell-off after an unexpected drop in American stockpiles. The Energy Information Administration said U.S. supplies decreased by 2.2 million barrels last week. Crude oil futures spiked $1.89 or 2.25% to trade recently at $85.94 a barrel.
The spot gold price pushed back through $1,160 an ounce but was recently trading at $1,156.20, a rise of $5.10 or 0.5% from Tuesday's New York close. Silver and platinum also advanced.
Nickel hit its highest price since May 2008 in London overnight and aluminium since September 2008. In London, copper climbed 0.63%, aluminium 1%, nickel 3.2%, tin 0.8% and zinc 2.5%. Lead retreated 0.8%.
The major European markets were driven higher by gains in the financial and technology sectors after positive U.S. earnings reports. Britain's FTSE rallied 0.6%, Germany's DAX 0.76% and France's CAC 0.64%.
TRADING THEMES TODAY
CHINA: The monthly deluge of Chinese economic data is due at 12.00 am today. The figures include GDP, CPI, PPI, industrial production and retail sales. Investors will look for a "Goldilocks" scenario - not so hot that the central government feels obliged to cool the economy and not so cold that the prospects for our miners dim. Reuters claimed overnight that government insiders had revealed the economy grew about 11.9% in the first quarter, beating expectations and raising the odds on a rate rise. "China will raise rates again, but the market knows they are going to raise rates again," a partner at a U.S. advisory service told Reuters. "Their demand for commodities should continue to accelerate and remain a driving force. They are a major reason why things like copper are trading at the prices they are."
METALS: A very strong night for both industrial and precious metals as the U.S. dollar weakened. Nickel hit a 23-month high and aluminium an 18-month high. They're probably the picks this morning but the charts look very good for almost any metal right now. Our miners should outperform today.
ECONOMIC NEWS: Local consumer inflation expectations are due at 11 am. A swag of Chinese data is due at noon (see above). Another busy night in the U.S. includes more Q1 earnings reports, unemployment claims, manufacturing, long-term securities, industrial production, natural gas storage and a housing market index.
