Morning traders. Thanks Shelby and after-market regulars.
Market wrap:
A volatile week looks set to end on a positive note after a record night on Wall Street and gains in iron ore and the big two Australian miners.
The June SPI 200 futures contract rose 31 points or 0.5% to 5862 as the Nasdaq eclipsed its dot-com highest close and the S&P 500 pushed briefly to a new intraday record.
The Nasdaq rallied 21 points or 0.41% to end the session at 5,056, finally surpassing the 5,048.62 close on March 10 2000 that marked the climax of the dot-com bubble. The S&P 500 closed five points or 0.24% ahead but missed a record close as a late round of profit-taking more than halved its final gain. The Dow added 21 points or 0.11%.
“The Nasdaq is seeing strength because a lot of these technology companies are doing better,” Randy Warren of Warren Financial Service told Bloomberg. “Sentiment seems to be really positive. The market seems to be giving Fortune 500 companies a free pass, assuming that the first quarter was bad but we’re going to have an acceleration. If we get that, all is well and everyone is happy.”
The Nasdaq took 15 years to surpass its dot-com closing high but fell short of its intraday record of 5,132.52 after peaking at around 5,072 last night. The main difference between then and now is that last night's price-earnings multiple was 30, compared to 190 in the year 2000.
Market sentiment last night was helped by a sharp fall in the greenback after a round of disappointing economic data increased the possibility that interest rates will stay at record lows for longer. Sales of new homes slumped 11.4% from February's seven-year high. Jobless claims inched higher to 295,000 last week from 294,000 the week before, above the 288,000 applications anticipated by economists. Preliminary figures for factory activity this month showed a marked decline in the purchasing managers index to 54.2 from 55.7 in March. The US dollar index was lately down 0.81%.
Europe's benchmark share index retreated for a second day after economic data disappointed. Markit’s preliminary manufacturing gauge for Germany fell to a two-month low and a services activity index to a three-month low. The Stoxx Europe 600 retreated 0.44% as Germany's DAX slid 1.21%, France's CAC lost 0.62% and Britain's FTSE gained 0.37%.
The session on Wall Street included a slew of earnings from the likes of Facebook (-2.62%), General Motors (-3.34%), Caterpillar (-0.09%), 3M (-3.04%) and eBay (+3.77%). A number of big names reported after the end of record close: among the reactions in after-market trade were a 7.02% jump in Amazon, 3.3% lift in Microsoft and a 3.69% rally in Google.
Australian mining giants BHP and Rio Tinto hit their highest level in at least a month in US trade as iron ore extended a rebound that has seen it bounce more than 15% from this month's ten-year low. BHP put on 2.97% and Rio Tinto 3.46%. Spot iron ore for import to China yesterday improved 90 cents to US$53.80 a dry ton. A separate price used by Metal Bulletin rose 1.4% to $US54.82 a ton.
Gold stocks rallied 2.42% in the US as the falling dollar fuelled a rebound in alternative stores of wealth. Gold for June delivery settled $7.40 or 0.6% ahead at US$1,194.30 an ounce.
Oil rose to a new 2015 high as energy traders bet on further stimulus measures in China after yesterday's soft manufacturing update. West Texas Intermediate crude oil settled $1.58 or 2.8% higher at US$57.74 a barrel.
Aluminium fell to a one-month low after China dropped taxes on exported aluminium rods and bars. In London, copper put on 0.5% and nickel 0.2%. Aluminium lost 1.6%, tin 0.5%, lead 0.9% and zinc 0.5%. US copper for May delivery was recently up % or cents at US$2.87 a pound.
The dollar was this morning buying 77.8 US cents.
TRADING THEMES TODAY
REBOUND: The ASX struggled to build on solid overnight leads yesterday, but the argument for a rise looks even stronger this morning after good gains in BHP and Rio and some promising after-market earnings announcements this morning that hint at further gains in the US tonight. The iron ore recovery story gathered momentum here yesterday with BCI leading the way. Likely more to come in the days ahead. My heart bleeds for Goldman Sachs, who downgraded FMG and iron ore last week. Oh hang on - they had the extraordinary good fortune to buy even as they were recommending that everyone else sell. US equity futures should give us a clue later in the day whether well-received earnings this morning from Microsoft, Google and Amazon look good enough to give us another record night in the US.
ECONOMIC NEWS: No significant domestic news scheduled today. Tonight's US highlight is the March durable goods/core durable goods report.
