Morning traders. Thanks Shelby and after-market regulars.
Market wrap:
A flat session on Wall Street and a downturn in oil point to a subdued open here ahead of a slew of corporate earning reports.
The March SPI 200 futures contract fell one point or less than 0.1% to 5874 as US stocks closed mixed, with weakness in energy stocks offsetting optimism that the Federal Reserve is in no hurry to raise rates.
The S&P 500 fell as low as 2,092 before the release of the minutes from the January Fed meeting encouraged traders to push the index up to within less than a point or 0.03% of break-even at 2,099.68. The Dow pared its loss to 18 points or 0.1% and the Nasdaq outperformed both with a rise of seven points or 0.14%.
The Fed minutes showed officials fretting over the danger of raising rates too soon and worried about the market reaction when the word "patient" is removed from their rate policy guidance. The committee identified weak wage growth, a strengthening greenback and international tensions over Greece and Ukraine as reasons to keep the central bank's key lending rate at a record low level. While a minority raised concerns about the possibility that the era of cheap money will create speculative bubbles, "Many participants indicated that their assessment of the balance of risks associated with the timing of the beginning of policy normalisation had inclined them toward keeping the federal funds rate at its effective lower bound for a longer time," the minutes said.
"I think [the minutes are] probably much more dovish than anybody anticipated," Greg Peters, senior investment officer at Prudential Fixed Income in the US, told Reuters. "I think June is going to be hard for them to move, but that's not to say they won't."
The Fed's sit-on-hands approach was supported by another round of weak domestic economic data. Construction on new houses fell 2% last month, wholesale prices slid a record 0.8% and industrial production increased by a seasonally-adjusted 0.2%, half the rate that economists expected. The reports added to evidence that the economy has lost momentum since the turn of the year, despite a fall in energy prices, improving employment and stocks at record highs.
Utilities was the best of the sectors, rebounding from several weeks of steady retreat as investors prepared to rotate funds into bank deposits and other assets that benefit from higher rates. Energy stocks were the biggest weight, falling 1.19% as oil broke a three-session winning run ahead of US inventory data this morning and tonight. West Texas Intermediate crude oil for March delivery settled $1.39 or 2.6% lower at US$52.14 a barrel and was lately lower still at US$51.75. WTI had put on roughly 9% during a three-session surge, but sustained rallies have been stifled each week by news of increasing US stockpiles as supply continues to outweigh demand.
Europe's benchmark share index rose to a new seven-year closing high after a Greek government spokesman confirmed that the government will request an extension to its bailout package this week. The Stoxx Europe 600 rallied 0.89% as Germany's DAX advanced 0.6%, France's CAC 0.95% and Britain's FTSE closed flat.
BHP and Rio Tinto ended the US session little changed as iron ore eased. BHP inched up 0.14% and Rio Tinto slipped 0.04% in US trade. Spot iron ore for import to China yesterday retreated 20 cents to US$63.40 a dry tonne.
Gold stocks were a standout in the US as the prospect of a delay in rate rises saw the precious metal rebound from seven-week lows. The NYSE Arca Gold Bugs index added 2.02%. Gold for April delivery settled $8.040 or 0.7% lower at US$1,200.20 ahead of the release of the minutes, but recouped all of its losses, rising to US$1,210.90 in the aftermath.
Copper recouped Tuesday's losses amid low volumes with Chinese buyers sidelined by public holidays. In London, copper rallied 1.7%, aluminium 0.1%, lead 1.1%, nickel 0.2% and tin 0.1%. Zinc fell 0.8%. US copper for March delivery was recently up 1.4% or more than four cents at US$2.62 a pound.
The dollar was this morning buying 78.2 US cents.
TRADING THEMES TODAY
EARNINGS: With little in the way of overseas leads this morning, the domestic market will likely take its cues from another wall of corporate earnings, including heavyweights AMP and WES. Others scheduled to report this morning include: AWC, BXB, CQR, DLS, FXJ, FDC, IIN, ORG, PNA, RCR, SFR, SUL, SXL, TTS, VAH, WEB and WSA (source: Fairfax). Energy stocks have had a good run, but face headwinds today with crude continuing its recent pattern of several big strides forward, several big strides back. The trend in crude is definitely up but it remains unusually volatile. In other words, the situation is not yet normal. Goldies got a lifeline with the Fed looking less likely to raise rates in the next few months.
ECONOMIC NEWS: No significant domestic news scheduled today. China remains on holiday. US highlights tonight are weekly jobless claims, Philly Fed Manufacturing Index, a leading index and crude oil inventories.
