The ASX Today
The ASX is indicating it will open weaker, potentially weighing up a mixed performance between equities and economics in the US on Friday.
The ASX is indicating it will open weaker after a mixed performance between equities and economics in the US on Friday.
ASX SPI 200 Futures were trading down six points at 7.30am AEST.
US non-farm payrolls fell for the first time in seven years last month, by 33,000, from forecasted growth in the vicinity of 90,000. Unemployment figures weighed in more positively though, as well as wages growth. In the end on Friday though, geopolitics appeared to dominate equity markets. There was talk North Korea leader Kim Jong-un was preparing his next missile test which could hit the west coast of the US.
There's no major economic data coming out locally today so little direction in that respect for the ASX. Oil lost steam overseas at the end of last week, as did base metals, but falls in the latter were more marginal so may not weigh on the resource sector as heavily today.
- ASX indicating it will open slightly lower with no real direction
- Australian dollar buying US77.69c – mid-point of its Friday session
- Oil prices fall steeply – Brent crude at $US55.62 a barrel this morning
- China Caixin manufacturing PMI published – traders may watch to gauge economic health, direction in commodities
- No major economic data released locally today – big week of data points, central bank commentary begins tomorrow
The S&P 500 finished Friday 0.1 per cent lower at 2549 points, the Dow ended flat at 22,773 points, and the Nasdaq gained 0.12 per cent. Unemployment figures were a silver lining, the headline figure falling to a 16-year low, meanwhile wages growth picked up to a 2.9 per cent pace year-on-year.
There's early signs the local energy sector will feel pressure today on the back of global oil prices slumping on Friday, as investors feared that over-supply conditions could re-emerge.
Russia and Saudi Arabia discussed extending the oil supply agreement. Reuters noted, "Saudi Arabia's energy minister said on Thursday he was 'flexible' about prolonging the production-curbing pact until the end of 2018."
Base metal prices fell for the most part on Friday, with the exception of nickel. However, base metals delivered in the week leading up to Friday, so strategists believe Australia's big resource companies could find some degree of support today. BHP's ADR in the US also closed marginally higher on Fridat. Gold ($US1275 an ounce) and iron ore ($US61.7 a tonne) had a less impressive week than other commodities but finished Friday relatively flat.
If the direction and momentum in the S&P 500 were to be any indication, like it historically has been, the ASX could back up its strong performance on Friday with a solid week. But this, of course, hasn't been a given in recent times.
“The S&P was higher for the fourth week in a row,” explained AxiTrader chief market strategist, Greg McKenna.
“It has broken back up and above a trend line that stretches back to 2011 and which acted as support for this rally between 2011 and 2015. So maybe the buyers of this laggard Australian stock market might finally come for it.”
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