Morning traders.
Market wrap: Australian stocks are set to open at a one-week high after sharp overnight rises in overseas equity markets and gains for key commodities.
The September SPI futures contract closed 17 points higher this morning at 4471 as Wall Street snapped its losing streak and oil and industrial metals benefitted from a weaker U.S. dollar. However, overnight falls in BHP after a rejected take-over offer for the world's biggest fertiliser producer, Potash Corporation of Saskatchewan, will weigh on our market today.
The S&P 500 had its biggest gain in two weeks, despite paring gains late in the session, closing 1.22% higher. The Dow added 104 points or 1.01% and the Nasdaq 1.26%.
The gains were fuelled by a combination of take-over action and upbeat economic news and earnings results after U.S. retail giant Wal-Mart beat profit expectations.
"We've got a cornucopia of good news. We had upbeat guidance from the largest retailer on the planet, M&A activity is picking up, and economic data that blew away all concerns about deflation," Art Hogan, chief market strategist at Jefferies & Co, told MarketWatch.
BHP sparked a rally in the agricultural sector with a US$39 billion offer for the Canadian fertiliser producer, Potash Corporation of Saskatchewan. Shares in the Big Australian slumped 2.4% in U.S. trade after the Canadian company rejected the offer as "opportunistic" and said it "grossly undervalues" the company. BHP said it will review its options. Read more here.
Industrial production in the U.S. increased 1% last month, more than twice what economists expected, easing fears of a slowdown in the engine of the economic recovery. Other overnight reports were mixed but close to expectations, according to market observers.
A second day of declines in the U.S. dollar helped stoke commodity prices. The dollar index, which gauges the greenback against six rivals, was recently off 0.4%.
Crude oil broke a six-session losing run ahead of tonight's weekly inventory report. Crude futures were recently up 28 cents or 0.4% at $75.52 a barrel.
Industrial metals rallied, with copper hitting a one-week high on fresh signs of falling stockpiles. Stocks in London Metals Exchange warehouses have fallen 27% since February. In late trade in London, copper was up 1.9%, aluminium 1.3%, lead 2.1%, nickel 2.2% and zinc 2.3%.
"Copper is predicting a global recovery," the president of T & K Futures and Options in the U.S. told Reuters. "I think we are going to see the global growth picture improve by the end of the year."
Gold was little unchanged overnight, but platinum and palladium got a boost from a rise in car production. Palladium rallied 2.4% and platinum 0.6% after the Federal Reserve reported a 10% increase in automotive-parts production. The spot gold price was recently 60 cents weaker than Monday's New York close at $1,224.90 an ounce.
BHP's bid for Potash Corp helped fuel a rally in European-listed miners. Britain's FTSE climbed 1.41%, Germany's DAX 1.57% and France's CAC 1.82%.
TRADING THEMES TODAY
AGRICULTURE: European and north American agriculture companies rallied strongly overnight after BHP pitched a US$39 billion take-over offer at the world's biggest producer of fertilisers. That should trigger a revaluation of local producers and other companies exposed to the sector. However, BHP itself is likely to be a lead-weight for our market today, judging by last night's fall in the U.S. That explains why our futures are so restrained this morning, relative to the overnight gains elsewhere.
ECONOMIC NEWS: The monthly leading index of economic indicators is due at 10.30 am, followed by the quarterly wage price index at 11.30 am. The U.S. has an unusually quiet night ahead - crude oil inventories appear to be the only scheduled report.
Good luck to all.
- Forums
- ASX - Day Trading
- daytrades august 18 pre-market
daytrades august 18 pre-market
-
- There are more pages in this discussion • 25 more messages in this thread...
This thread is closed.
You may not reply to this discussion at this time.
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Featured News
The Watchlist
CCO
THE CALMER CO INTERNATIONAL LIMITED
Anthony Noble, MD & CEO
Anthony Noble
MD & CEO
Previous Video
Next Video
SPONSORED BY The Market Online