Morning traders. Thanks Shelby - we may have to ban tequila from the after-market lounge after last night's session...
Market wrap:
Shares look set for a flat start after a disappointing start to the Q1 earnings season in the US took some of the shine off a positive close on Wall Street.
The June SPI 200 futures contract pared its gain to four points or less than 0.1%, closing at 5963 as an after-market sell-off in aluminium giant Alcoa underlined doubts about the outlook for corporate profits this season. The former Dow component was lately off 3.29% after reporting lower revenue and earnings than expected.
Earlier, the S&P 500 overcame a late wobble following the release of the minutes from the March Federal Reserve policy meeting to seal a gain of six points or 0.27%. The Dow added 27 points or 0.15% and the Nasdaq 41 points or 0.83%.
The market briefly turned negative following the release of the FOMC minutes, but quickly recovered to close the session near where it was just before the data hit trading screens. The minutes showed that officials remained divided over the timing of the first rate hike and continued to rely on economic data to provide direction.
“This is just confirmation that there’s uncertainty,” Scott Wren, senior equity strategist at Wells Fargo Advisors in the US, told Bloomberg. “We’re two months from June, there’s no way in my mind the Fed is going to make a move without telling us three to four months ahead of time.”
The US dollar index crept higher following the Fed minutes, lately up 0.18%. However, the Australian dollar was roughly half a cent higher than this time yesterday at 76.88 US cents.
Energy stocks were the biggest drag on Wall Street, falling 0.81% after US crude inventories recorded their biggest one-week increase in 14 years. West Texas Intermediate crude oil for delivery in May plunged $3.56 or 6.6% to settle at US$50.42 a barrel, erasing more than half of oil's 10% rally leading into last night. The Energy Information Administration announced commercial crude inventories in the US increased by 10.9 million barrels to 482.4 million last week, three times what analysts anticipated.
"Today’s data seem to confirm that last week’s fall in oil production and relatively small increase in crude stocks were more of a blip than a sign that the current upward trend in output and stocks was coming to an end,” Thomas Pugh, commodities economist at Capital Economics, told MarketWatch.
Gold was in the red before the Fed minutes and recovered after temporarily extending its retreat. Gold for June delivery settled $7.50,or 0.6% lower at US$1,203.10 an ounce and was last trading at US$1,202.20. The NYSE Arca Gold Bugs index declined 1.39%.
Iron ore rallied for a second session yesterday in China. Spot ore for import to China rose 30 cents to US$47.90 a dry tonne. BHP edged up 0.02% overnight in US trade. Rio Tinto put on 0.16%.
Lead neared a four-month high and nickel staged a tentative rebound from Tuesday night's near-six-year low. In London, lead rallied 0.9%, nickel 0.2% and zinc 0.3%. Copper lost 0.9%, aluminium 0.7% and tin 0.3%. US copper for May delivery was recently down 1% at US$2.73 a pound.
A mixed night in Europe saw the benchmark index inch higher even as major regional markets declined. The Stoxx Europe 600 put on 0.08% as Germany's DAX gave up 0.72%, France's CAC 0.28% and Britain's FTSE 0.35%.
TRADING THEMES TODAY
STEADY EDDY: Wall Street is basically flat since Monday night, regaining overnight what it lost on Tuesday. However, the negative reaction to Alcoa's profit result, released after the close of regular US trade, may cast a shadow today. The aluminium giant is by no means a bellwether for this earnings season but its revenue and profit misses may unsettle a market that is nervous about how well corporate profits have withstood recent headwinds, including a strong greenback and a domestic slowdown. The sharp retreat in oil is another negative for today's outlook - looks like last week's US inventory decline was another false dawn for energy bulls. Iron ore strung together back-to-back gains for the first time in goodness knows, but there have been too many false bottoms there to draw premature conclusions.
ECONOMIC NEWS: The AIG Construction Index is scheduled for 9.30am EST. Tonight's US highlights include weekly benefit claims and wholesale inventories.
