Morning traders. Thanks Trees and after-market regulars.
Market wrap:
Shares look set to start the last trading session of the month cautiously higher following a mixed closed on Wall Street and strong gains in key commodities.
The September SPI200 futures contract edged up 12 points or 0.2% to 5246 as turbulence on global financial markets subsided on Friday.
The S&P 500 traded in its tightest range in almost two weeks before claiming a third straight advance with a late rally of one point or 0.06%. The Dow was underwater for most of the session but trimmed its loss to 12 points or 0.07%. The Nasdaq was the best of the major indices with a gain of 16 points or 0.32%.
"I think everybody is probably a little exhausted from the week. I think everybody decides to leave early and we end the week pretty calmly," Mark Heppenstall, managing director at Penn Mutual Asset Management in the US, told
CNBC. "The trading has become thin. It'll become easier to push us around."
The S&P 500 ended a wild week 0.9% ahead after the index's strongest three-day rally in almost four years. Despite the rebound the benchmark US index ended Friday's session 5.5% lower for the month and on track for its worst monthly return since 2012 after entering a technical correction at the start of last week.
As Chinese concerns faded into the background, traders remained fixated on the likelihood that the Federal Reserve will raise its key rate next month. Fed Vice Chairman Stanley Fischer said on Friday the case for raising rates was "pretty strong" before China devalued the yuan, sparking a global equities sell-off. Fischer said central bank officials have time to watch how markets behave before assembling on September 16-17 to make a decision.
Read more here.
The challenge facing the Fed was underlined by another batch of mixed economic data. Consumer spending increased 0.3% last month, slightly below economists' expectations for a rise of 0.4%. Wages improved 0.5%, the best gain since November. The final consumer sentiment reading for August was revised downwards to 91.9 from a preliminary reading of 92.9 and a July reading of 93.1.
Energy was the pick of the five S&P 500 industry groups that rallied. The energy ETF put on 2.27% as crude oil extended its biggest weekly rally in six years. West Texas Intermediate crude oil for October delivery settled $2.66 or 6.3% higher at US$45.22 a barrel. The contract bounced 11.8% last week amid growing expectations that OPEC nations will cut production to support prices.
Raw materials was also strong as iron ore and most base metals chased crude higher. BHP put on 1.92% and Rio Tinto 0.11% in US trade. Spot iron ore for import to China jumped $2.20 to US$55.20 a dry ton.
While buying in copper dried up, other base metals continued Thursday's rebound. In London, aluminium improved 2.8%, lead 3.2%, nickel 0.2%, tin 2.6% and zinc 3.3%. Copper eased 0.1%. US copper for September delivery edged up 0.2% to US$2.34 a pound.
US gold stocks rose 4.3% as the precious metal claimed its first rise in five sessions. Gold for December delivery settled $11.40 or 1% higher at US$1,134 an ounce, but lost 2.2% for the week.
Europe's benchmark index rallied late in the session to finish higher for the week. The Stoxx Europe 600 added 0.28% on Friday for a weekly gain of 0.6%. France's CAC added 0.36% on Friday and Britain's FTSE 0.9%. Germany's DAX gave up 0.17%.
The dollar was this morning buying 71.56 US cents.
TRADING THEMES TODAY
SHOOTING FOR FIVE: The healing on world equity markets continued on Friday and may offer enough incentive for a fifth straight rise here today. Volatility is ebbing (for now, at least) after peaking during the remarkable dive-and-reverse in the first half of last week. The fact today is the last trading day of August may offer fund managers an incentive to push the index to polish what turned into a turd of a month. I don't know enough about institutional bonus systems to assess whether that would be worthwhile when the fall has been as sharp as it has been during August. Resource stocks outperformed the broader market on Wall Street on Friday and may perform the same function here after strong rebounds in crude and most metals.
ECONOMIC NEWS: The Melbourne Institute's inflation gauge is due at 9.30am EST, followed by new home sales at 11am and monthly private-sector credit and quarterly company operating profits at 11.30am. The highlight of a light start to the week in the US tonight is the Chicago PMI.
Good luck to all.
