The ASX is piqued to build on a five-month high as the US midterm elections and October’s CPI data saw Wall Street rally at the weekend.
ASX futures are up 42 points or 0.59% to 7,204 before the bell.
What’s new on Wall Street?
Softer-than-expected inflation data — the first sign that the Federal Reserve could scale back hefty interest rate hikes — triggered Wall Street’s rally on Friday.
The Nasdaq led gains with a near-2% rally, while the S&P 500 inched closer to the 4,000-point mark with a 0.9% jump. The Dow closed up 0.1%.
More than half of stocks closed in the green but homegrown resources stocks like BHP (ASX:BHP) and Rio led the charge with share price rises above 6%.
On the tech side of town, Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) all posted wins — even Tesla (NASDAQ:TSLA) notched a reversal with a 2.8% gain.
Looking at the sectors, though, it seems energy stocks were the real winners with a more than 3% rally.
Communication services and discretionary stocks followed close behind while utilities and healthcare companies finished more than 1% into the red.
Looking ahead, as the votes roll in for the all-important midterms — and the Republican ‘red wave’ looks more like a ripple — Wall Street needs to realign its picture of Congress.
It seems investors were bracing for a split government but as the Dems keep their grip on the Senate and the race tightens in the House, a Republican-controlled chamber is less of a sure thing and the Dems have an outside chance of retaining their slim majority.
How this new Congress will impact monetary policy — split or no split — remains to be seen.
Commodities and currency
Commodities are on a roll thanks to better-than-expected GDP data out of the UK and China’s relaxed quarantine measures.
Oil snapped out of its brief losing streak, with WTI jumping 2.76%, while gold and copper also posted gains, up 1.17% and 4.74%, respectively.
Meanwhile, iron ore is set to hold onto last week’s momentum — futures are up 2.1%, bringing the commodity past the US$90/tonne barrier.
The Aussie dollar is also stronger this morning, buying 67 US cents and 57 British pence.
Things are less sanguine on the crypto front: FTX filed for Chapter 11 bankruptcy, prolonging the red spiral among nameplate digital currencies.
Bitcoin is down 3.36%, while Ethereum dropped 4.76%.
On the ASX
Embattled travel stock Flight Centre (ASX:FLT) says it’s too early to release its full-year guidance as volatility continues to plague the industry’s recovery.
The travel agent hopes to post between $70 million and $90 million in underlying earnings in this financial year’s first half but it does anticipate an accelerated recovery in 2023.
In other reporting news, agribusiness Elders has boosted its net profit 9% to $162.9 million following strong sales.
Investors can expect a 28-cent final dividend, taking their full-year disbursement to 56 cents per share.
Finally, on the cap raise front, Resolute Mining has upsized its $140 million institutional offer to $164 million thanks to strong investor demand.
The cash injection will support an expansion at the Syama North gold hub, reduce net debt and fund general working capital.