After a strong session yesterday in which the benchmark ASX200 gained 1.44% — its biggest one-day rally in three months — the market is set to continue its rise this morning with the ASX SPI 200 Futures trading up 14 points (0.18%) to 7,828.
Yesterday’s strength came as the RBA announced its decision to keep rates on hold again in May, providing certainty to the market after speculation that persistent inflation would push the central bank to lift rates.
US markets were mixed overnight but European markets closed at record highs.
Copper briefly traded through US$US10,000 per tonne overnight, joining a wider rally in risk assets after soft US jobs data renewed speculation that the Fed will lower rates this year. April jobs data came in below market expectations and marked the slowest rate of jobs gain in six months.
Copper is now up almost 17% in 2024 amid signs of recovery in global factory activity as well as some supply tightness although it has been primarily driven by speculation.
What happened overnight?
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US markets
US sharemarkets were mixed on Tuesday as the rally that has powered stocks in early May struggled to gain further traction, with investors split on whether the market can sustain the advance given all the economic crosscurrents.
The Dow Jones index rose by 32 points or 0.1%, up for a fifth straight session, marking its longest winning streak since December. The S&P 500 index also gained 0.1% but the Nasdaq index shed 17 points or 0.1%
- Walt Disney (NYSE:DIS) fell 9.5% as a surprise profit in its streaming entertainment division was eclipsed by a drop in its traditional TV business and a weaker box office.
- Tesla (NASDAQ:TSLA) slid 3.8% after data showed the US automaker sold 62,167 China-made electric vehicles in April, down 18% from a year earlier.
- Nvidia dipped 1.7% on media reports that Apple (NASDAQ:AAPL) was developing its own chip to run artificial intelligence software in data centres.
- Apple gained 0.4% as it introduced a new chip called the M4, but put the new chip in an iPad Pro model rather than a laptop.
- Megacap stocks Alphabet (NASDAQ:GOOGL) and Meta Platforms rose 1.9% and 0.6%, respectively.
- FMC Corp (NYSE:NYSE:FMC) gained 9.5% after the herbicide and insecticide maker forecast revenues for the year ahead of Wall Street expectations.
Longer-dated US government bond yields fell on Tuesday amid persistent hope that the US Federal Reserve would lower rates this year.
European markets
European sharemarkets closed at record high levels on Tuesday. The financials sector rose 2.5%, boosted by a 7.6% jump in UBS, after the lender's first quarterly profit since taking over Credit Suisse (SIX:CSGN), was three times analysts' expectations.
- The continent-wide FTSEurofirst 300 index rose 1.2%.
- In London, the UK FTSE 100 index also jumped 1.2%, boosted by a 1.3% gain in Shell (LON:RDSa) after Reuters reported its plans to sell the Malaysian gas station business
Currencies
Currencies were mixed against the US dollar in European and US trade.
- The Euro fell from US$1.0785 to US$1.0747 and was near US$1.0755 at the US close.
- The Aussie dollar rose from US65.85 cents to US66.23 cents and was near US66.00 cents at the US close.
- The Japanese yen eased from 153.99 yen per US dollar to JPY154.74 and was near JPY154.70 at the US close.
Commodities
Global oil prices fell on Tuesday on signs of easing supply concerns, while traders shifted their focus to US stockpiles data due on Wednesday. Oil prices found some support from a US government solicitation to buy more than 3 million barrels of oil for the Strategic Petroleum Reserve.
- The Brent crude price fell by US17 cents or 0.2% to US$83.16 a barrel.
- The US Nymex crude price dipped US10 cents or 0.1% to US$78.38 a barrel.
Base metal prices fell on Tuesday as the US dollar strengthened against most currencies.
- Copper futures slipped 0.2%.
- Aluminium futures shed 1.1%.
The gold futures price dipped US$7.00 or 0.3% to US$2,324.20 an ounce on Tuesday as traders remained focused on the prospects for interest rate cuts from the US Federal Reserve.
- Spot gold was trading near US$2,312 an ounce at the US close.
Iron ore futures slid US87 cents or 0.7% to US$118.69 a tonne on Tuesday. Investors continued to digest proposed property stimulus measures and post-holiday period restocking at furnaces in top consumer China.
What’s on?
In Australia, Arcadium Lithium, Goodman Group (ASX:GMG) and Virgin Money (LON:VM) UK all release earnings. GPT GROUP (ASX:GPT) and SmartGroup host AGMs. ResMed trades ex-dividend.
On the small cap front
The S&P ASX Small Ordinaries jumped 1.59% yesterday, while the ASX 200 gained 1.44%.
You can read more about the following throughout the day.