Originally published by Rivkin Securities
The S&P 500 opened higher last night and continued tracking steadily higher for the rest of the session. The Dow Jones Industrial Average followed suit as tension surrounding the Gulf of Mexico hurricanes and North Korea have eased. Both indices closed over 1% higher which brings the Dow Jones back above 22,000 and not far off a new all-time high. The S&P Insurance Index surged last night due to lower expected losses from hurricane Irma. As the hurricane made landfall further west than initially anticipated, the damage is expected to be lower from an insured losses point of view.
The broad risk-on sentiment was bearish for gold which dropped back to US$1,329 per ounce. After a very strong run since early July, gold was probably due for a pullback as the price surged around $120 from the early July low. Gold has actually been one of the better performing asset classes this year and is even outpacing the S&P 500.
Oil prices are inching their way higher as the restart of refineries in Texas should help restore crude demand. A further bullish catalyst for crude may come from OPEC which is attempting to reach an agreement to extend the production cuts for a further three months which would see the cuts remain in place until June 2018. Saudi Arabia is driving the process to get other OPEC members to agree with Venezuela, Kazakhstan and the UAE interested in extending the cuts. WTI oil is currently trading at US$48.09 per barrel.
ASX 200 futures are up 0.5% this morning following strong overseas leads.
Data Releases:
- UK CPI 6:30pm AEST