The Australian share market looks set to fall this morning, with ASX futures down 0.3%.
US sharemarkets began July on a positive note, overcoming the challenge of a sharp rise in bond yields.
The Dow Jones increased by 50 points or 0.1%, the S&P 500 index was up 14 points or 0.3% and the Nasdaq gained 146 points or 0.8%. The latter rose above 17,000 points for the first time in its history, thanks to gains in AI stocks, including Nvidia.
Technology stocks were generally buoyant, with investors again throwing support behind the megacaps. Apple shares (NASDAQ:AAPL) rose by 2.9%, Amazon (NASDAQ:AMZN) firmed by 2% and Microsoft (NASDAQ:MSFT) gained 2.2%.
Tesla (NASDAQ:TSLA) shares surged by 6% during the session, marking the fifth consecutive day of gains ahead of an impending delivery report release.
Gains in Europe
European share markets also saw gains on Monday, halting the previous week’s declines.
Investors were relieved that the far right is less likely to gain a majority following the French Parliamentary elections over the weekend.
Germany's annual inflation rate fell to 2.2% in June from 2.4% in May, below the forecast of 2.3%.
The continent-wide FTSEurofirst 300 rose almost 6 points or 0.3%.
In London, the UK FTSE 100 index ended slightly higher, with a gain of 2 points.
In US economic data, construction spending fell by 0.1% in May, against expectations of a 0.1% increase.
The ISM manufacturing PMI declined from 48.7 in May to 48.5 in June, below the forecast of 49.1. Conversely, the S&P Global manufacturing PMI rose from 51.3 in May to 51.6 in June, slightly below the expected 51.7.
US Government bond yields rose to their highest levels since early June on Monday, as investors considered the Federal Government's budget position in light of a possible Trump presidency – of which there is increased risk following President Biden’s poor showing at the debate last Thursday.
The US 10-year Treasury yield rose by 14 points to 4.48%, and the US 2-year Treasury yield increased by 5 points to 4.77%.
Currencies and commodities
Currencies were mixed against the US dollar, which moderated in European trade before recovering in US trade due to rising bond yields.
The Euro moved from US$1.0777 to US$1.0720 and was near US$1.0740 at the US close. The Australian dollar traded as high as 66.80 US cents before retreating to 66.44 US cents, closing near 66.59 US cents.
The Japanese yen weakened from 161.05 yen per US dollar to 161.73 yen and was near 161.48 yen at the US close.
Global oil prices rose on Monday as traders considered increasing demand during the US summer driving season and potential disruptions from hurricane activity in the Caribbean.
Brent crude rose by US$1.60 or 1.9% to US$86.60 a barrel, while the US Nymex crude was up by US$1.84 or 2.3% to US$83.38 a barrel.
Base metal prices were mixed on Monday, as investors reflected on recent manufacturing surveys from China.
The latest survey indicated increased activity among smaller manufacturers, growing at the fastest pace since 2021 due to improved foreign demand.
Copper futures firmed by 0.8%, reflecting early moderation in the US dollar, while aluminium futures ended the session with a decline of 0.9%.
Gold futures were down just $0.70 ounce to US$2,338.90 on Monday as investors cast an eye on the week's economic events for interest rate clues.
Spot gold was trading near US$2,325 an ounce at the US close, while iron ore futures strengthened by $1.17 or 1.1% to US$106.83 a tonne.
Traders were encouraged by the latest private survey of Chinese manufacturing activity.
The Caixin China General Manufacturing PMI ticked up to 51.8 in June 2024 from 51.7 in May, beating market forecasts of 51.2.
Back home, the Reserve Bank (RBA) Board is set to issue its June meeting minutes while US Federal Reserve chair Jerome Powell is due to speak on a panel at the ECB Forum on Central Banking in Sintra, Portugal – a magical setting for a meeting of bankers.
What’s happening in small caps?
The Small Ordinaries was sitting at 2,954.98 overnight, having shed 0.60% on the previous close. Making news in small caps, which you can read about on Proactive throughout the day, are: