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Morning markets: Wave of optimism drives US stocks to record close

Tuesday, 12 Jul 2016 06:50:35 | Sue Lannin And Stephen Letts

The major US share index hit a record closing high overnight. (Chip East, file photo: Reuters)

Wall Street closed on a record high, with the market cheering on the seemingly contradictory forces of stronger economic news via jobs data and the view that interest rates would stay lower for longer.

Markets at 8:00am (AEST):

  • ASX SPI 200 futures +0.5pc at 5,327
  • AUD: 75.29 US cents, 68.2 euro cents, 58 British pence, $NZ1.043
  • US: Dow Jones +0.4pc at 18,277, S&P500 +0.3pc at 2,137, NASDAQ +0.4pc 4,989
  • Europe: FTSE +1.4pc at 6,683, DAX +2.1pc at 9,833 Eurostoxx50 +1.7pc at 2,885
  • Commodities: Brent oil -1.5pc at $US46.05/barrel, Gold -0.9pc at $US1,354/ounce, Iron ore +0.5pc at $US55.68/tonne

The S&P 500 rose about a third of a per cent, edging above its previous closing high of 2,130 with increases across most sectors, while European equity markets also enjoyed hefty rises.

However, IG chief market strategist Chris Weston said last night's US gains lacked conviction.

The S&P 500 has printed a new high, but the price action is hardly inspirational and there was seemingly a level of caution in the buying.

The prospect of a new prime minister in the UK saw the FTSE 100 rise strongly in London as worries about the Brexit vote diminished.

The pound also gained after prime ministerial candidate, Andrea Leadsom, withdrew from the race leaving UK Home Secretary, Teresa May, on the way to replace outgoing British prime minister, David Cameron.

Bond yields across Europe were up, while commodities were a mixed bag, with oil falling on increased Canadian production and US rig counts edging up.

Gold finally fell on the outbreak of good news, while iron ore steadied ahead of Friday's Chinese GDP data and base metals on the LME (London Metals Exchange) were higher.

Today's data centres on readings of post-election confidence, with ANZ publishing a consumer reading and the NAB trotting out its monthly take on business conditions and confidence.

Today's agenda:

  • NAB Business Conditions and Confidence (11:30am)
  • ANZ Roy Morgan Consumer Confidence (9:30am)
  • RBA Head of Financial Stability Luci Ellis speaks at Banking and Financial Stability Conference
  • US Federal Reserve member Loretta Mester speaks at Banking and Financial Stability Conference

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