Originally published by Rivkin Securities
The Dow Jones Industrial Average and S&P 500 closed higher overnight but the real performer was the Nasdaq 100, which surged 1.2%. Netflix Inc (NASDAQ:NFLX) was a driving force of this with the stock closing 3.5% higher while Facebook (NASDAQ:FB) climbed 1.1%. This puts the index back near record highs.
The second revision of US 2nd quarter GDP came out overnight with the original 2.6% growth rate revised up to 3.0%. This was a much larger than expected upward revision and gives the second quarter the fastest annualised growth rate since the first quarter of 2015. The majority of the second quarter GDP growth came from consumer spending indicating that consumer confidence is increasing. The Atlanta Fed GDP tracker is currently predicting third quarter GDP to be 3.4% although this estimate has been coming down for the last few weeks from its starting point at 4.0%. The upwardly revised GDP may have contributed to the positive close for the US Dollar Index, which is now just above a two-year low. The weak US dollar is the main reason for the apparent strength of the Aussie dollar which is currently trading at US$0.79.
The gold price held firm overnight despite the positive economic data from the US which may increase the probability of another rate hike this year. Gold in Australian dollars actually climbed above $1,650 overnight as the AUD/USD retreated. Gold’s breakout from strong resistance at US$1,300 should see this level now act as support.
Today at 11:30am, Australia’s private capital expenditure data for the second quarter will be released. Later tonight, US personal spending and income data will be released. ASX 200 futures are flat this morning.
Data Releases:
- AU Private Capital Expenditure 11:30am AEST
- US Personal Spending and Income 10:30pm AEST