Morning traders. Daylight saving commenced in the US on the weekend and regular trade on Wall Street now ends at 7am EST.
Market wrap:
Shares face a cautiously positive start after US stocks overcame disappointment over Chinese economic data to record a seventh straight advance, their longest winning run in almost a year.
The March SPI 200 futures contract ended the night session seven points or more than 0.1% ahead at 5161 as traders bet that the ASX yesterday factored in most of Wall Street's overnight gains.
A night without significant market-moving news saw US stocks open lower before grinding out another modest gain. The S&P 500 rallied 0.31% or five points to 1,556 with banks and health-care companies leading the way. The Dow added 50 points or 0.35% for its fifth straight record close. The Nasdaq added 0.27%.
"The fundamentals continue to support a higher stock market," a director of research and fund manager at Penn Capital Management in the US told Bloomberg. "In the very short term, is a pullback a possibility? Absolutely. If we get a pullback, likely a lot of people will step in."
The market opened on the back foot following modest declines in Europe in response to soft weekend economic figures from China and a credit downgrade for Italy. Ratings agency Fitch downgraded Italian government debt to BBB+ from A-, citing last month's election deadlock as a fresh reason for concern. The major European markets steadied but finished mixed as Wall Street recovered. Germany's DAX dipped 0.03%, France's CAC lost 0.11% and Britain's FTSE put on 0.31%.
A seventh positive close in the US saw Wall Street's "fear gauge", the VIX, hit its lowest level since 2007. The Chicago Board Options Exchange Volatility Index dropped nearly 8% to extend last week's 18% decline and a 35% drop for the year. The near six-year low in the index implies traders expect minimal volatility in the S&P 500 over the next 30 days.
Low volatility was the theme of the night in oil and metals markets. Oil dropped around a dollar mid-session, but recovered to trade little changed. West Texas crude for April delivery was recently down 12 cents or 0.1% at US$91.83 a barrel.
Gold extended last week's modest rise, helped by a declining greenback and hope that last week's improved US economic data does not bring about a premature end to the Federal Reserve's stimulus program. Gold for April delivery was lately up $2.90 or 0.2% at US$1,579.80 an ounce.
Most base metals retreated in London, but copper recovered in US trade. US copper for May delivery was recently up one cent or 0.3% at US$3.52 a pound. In London, copper eased 0.1%, aluminium 0.7%, lead 0.7%, tin 0.6% and zinc 0.6%. Nickel put on 0.5%.
TRADING THEMES TODAY
GRIND HIGHER CONTINUES: Beyond the numbers, there's not much to report from a night that stuck to the recent template of slow but steady gains on Wall Street. Contrarians might point to Wall Street's seven-session winning run and low volatility as signs of a complacent market, but any dip lately has been quickly bought up. It doesn't look like this market is going anywhere but higher until there is a very good reason to do something else. The S&P 500 is now just nine points or roughly 0.6% off its record high (apologies for miscalculating those figures in yesterday's market wrap).
ECONOMIC NEWS: Business confidence figures are due at 11.30am EST. A low-key start to the week for scheduled news continues tonight with trade and manufacturing data from the UK and the Federal budget balance and Small Business Index in the US.
