The ASX looks set to reverse yesterday’s losses and rise into the green following a rally among major US indices.
Benchmark futures imply a 44-point jump at the open, bringing the ASX 200 up 0.66%.
What’s new on Wall Street?
New York markets snapped their losing streak on the first trading day of the week — all four benchmark indices gained more than 1% by the closing bell.
The Dow led the pack with a 1.58% gain, followed by the S&P (up 1.43%), the Nasdaq (up 1.26%) and the Russell 2000 (up 1.22%).
Investors remain cautiously optimistic ahead of the November consumer price index (CPI) print, which is expected to indicate that headline inflation fell from 7.7% in October to 7.3%. Core inflation is also expected to have eased by 0.2% to 6.1% in the same period.
Checking in with the sectors, it was green across the board. Energy stocks staged a serious comeback, moving from the worst losses to the best gains in the space of one trading session.
Utilities followed hot on their heels (up 2.27%), while comms services and consumer discretionary stocks brought up the rear with 0.71% and 0.29% respective gains.
All in all, 60% of stocks advanced, while just under half are trading below their 200-day moving average.
Commodities and currency
Commodities reversed last week’s narrative overnight — crude bounced back into the green and gold prices softened.
Oanda senior market analyst Ed Moya had this to say: “Crude prices are rising on hopes China’s demand situation will quickly improve and on concerns that supplies will be kept tight by both Russia and OPEC.
“China’s reopening is coming; it won’t happen overnight but it will provide a major boost to demand in the outlook next quarter.
“Oil has too much support at the $70 level, which should suggest the recent change in China’s approach to fighting COVID could support a rally towards the $80 level.
Conversely, Moya said gold prices were settling below the $1,800 level as traders awaited both a key inflation report and the FOMC decision.
“The market is pricing in rate cuts next year and that is also providing some ammunition for gold bulls,” he explained.
“Gold should have a strong performance over the first half of next year as the Fed would not likely resume tightening if inflation remains high as growth turns negative.”
In other news, iron ore dipped 1% to fetch US$108.40 tonne, reflecting a slight correction as China’s crude steel output softens.
Mysteel Global said Chinese steelmakers preferred to keep their production at a relatively low level around this time, given the lacklustre demand during the traditional off-season.
On the currency front, the Aussie dollar dropped 0.66% overnight. It’s buying 67 US cents, 55 British pence and around NZ$1.05.
On the ASX
The Star Entertainment Group is in the news today after the national corporate regulator launched proceedings against 11 current and former directors.
The regulator’s case includes claims against members of the Star board between 2017 to 2019, including former chair John O Neill and former MD and CEO Matthias Bekier.
ASIC deputy chair Sarah Court said: “ASIC alleges that Star’s board and executives failed to give sufficient focus to the risk of money laundering and criminal associations, which are inherent in the operation of a large casino with an international customer base.”
Star shares are down 31% for the year as the gambling and entertainment group battles a public enquiry into its Sydney casino operation.
In other news among the C-suite, there are executive changes at biotech giant CSL this morning.
Current COO Dr Paul McKenzie will succeed Paul Perreault as CEO after more than a decade at the helm.
Dr McKenzie said he was “excited, honoured and humbled” for the opportunity to continue building CSL’s legacy as he follows in Perreault’s footsteps.
Finally, Chalice Mining is eyeing another resource update at its Julimar nickel-copper-platinum project.
It’s extending its scoping study to include new metallurgy results and a bulkier resource, expected sometime early next year.