Morning traders. Many thanks to Speckled and Oscar for stepping up this week - well done, both.
Market wrap:
Australian shares have broadly positive leads following moderate gains in the US amid conflicting economic signals and declines in key commodities.
The September SPI200 futures contract rose 15 points or 0.3% to 5627 after Wall Street rallied for the first time in four sessions.
US stocks rose strongly at the opening bell after disappointing jobs data dulled the likelihood of a rate rise next month, then faded following news of a surge in services activity. The S&P 500 bounced as much as 20 points in early trade and ended the night seven points or 0.31% ahead. The Nasdaq was the pick of the major indices with a rise of 34 points or 0.67%. The Dow was dragged lower by an earnings miss from Disney, losing 10 points or 0.06%.
“The market has been under a little bit of pressure looking for a reason to go back up,” John Manley, chief equity strategist at Wells Fargo Funds Management in the US, told
Bloomberg. “The market’s moving in the right direction. A slow, steady recovery is probably a good thing. The single most important factor affecting stock markets is what the Fed is doing.”
With the timing of the first rate rise in nine years dominating the investment outlook in the US, Fed-watchers interpreted a decline in private-sector hiring as a reason to drive the share market sharply higher at the open. Private companies hired 185,000 workers last month, according to ADP, down from 229,000 in June and well short of the 215,000 hires that economists expected.
Read more here.
However, any notion that the report foreshadowed a weak government jobs report tomorrow night was dashed by news shortly after that growth in the services sector touched a ten-year high in July. The Institute for Supply Management's services sector index rallied to 60.3, its highest level since August 2005. Analysts had expected a reading around 56.2.
Traders also parsed comments from Federal Reserve officials for clues as to their inclination to hike at next month's meeting. Fed Governor Jerome Powell said he remained undecided whether the economy was strong enough.
Read more here. Meanwhile, Atlanta Fed President Dennis Lockhart said the economy was ready.
"I think there are really two things going on," Jack Ablin, chief investment officer at BMO Private Bank in the US, told
CNBC. "One is there's a growing sense the Fed doesn't know what it's going to do. They're going to take it as it comes. The other thing holding back investors incrementally is we have a jobs report Friday."
Energy was once again the biggest drag on the market as crude oil slid to a four-month low. The energy EFT lost 0.75% after West Texas Intermediate crude oil for September delivery settled 59 cents or 1.4% lower at US$45.15 a barrel.
Aluminium marked a six-year low under early pressure from the US dollar. In London, aluminium and copper both lost 1.1%, lead 0.6%, tin 1.8% and zinc 1.3%. Nickel gained 0.3%. US copper for September delivery was recently down 0.4% at US$2.35 a pound.
BHP and Rio Tinto advanced to two-week highs in US trade as iron ore extended its recent recovery. BHP put on 1.69% and Rio Tinto 2.52%. Spot iron ore for import to China yesterday improved $1.40 to US$56.40 a dry ton.
US gold miners plumbed fresh 12-year lows as the precious metal hovered near its lowest point in five years. The NYSE Arca Gold Bugs index declined 2.29%. Gold for August delivery settled $5.10 or 0.5% lower at US$1,085.60 an ounce.
A strong session in Europe saw the benchmark index reach a two-week high as an upbeat earnings season continued to provide reasons to buy. The Stoxx Europe 600 added 1.3%, Germany's DAX 1.57%, France's CAC 1.65% and Britain's FTSE 0.98%.
The dollar was this morning buying 73.62 US cents.
TRADING THEMES TODAY
JOBS REPORT: Wall Street looked eager to rally last night after a three-session lull, and held onto a gain even if the final tally was not entirely convincing. The night's economic data did nothing to clarify the prospects for next month's Fed policy meeting, nor did conflicting comments from Fed officials. In other words, we're no further on. The ASX came under pressure yesterday after the Reserve Bank gave a clue that this rate-easing cycle might be ending. Today's potentially market-moving report is the 11.30am EST July jobs data. The monthly figures swing wildly, so anything is possible today. For what it's worth, the market expects jobs growth of 10,200, according to Forex Factory.
ECONOMIC NEWS: July employment figures are due at 11.30am EST. Tonight's US highlights are weekly benefit claims and Challenger job cuts.
Good luck to all.
