Whoppee, the boom is back – oil up, copper up, shares up, iron ore up, interest rates down – and the Aussie dollar is up (oh, no) – it’s boomsville according to any number of market analysts. Oh, and gold’s down.
Our market will start with a gain of 100 points on the share price index futures contract. Oil rose by 5% to 6% for both Brent and US West Texas crude – that’s a 19% gain in the past four trading days and approaching a bull run.
Copper jumped by 3.5%, iron ore rose for a 4th day and is now around $US63.18 a tonne (up 1.2% overnight).
US markets soared, with the Dow up triple digits (300 points this time) for a 6th straight day. The S&P 500, the key indicator, was up 1.4%.
Gold fell $US16 to $US1,262 an ounce.
But it’s only a week ago that traders were moaning and groaning and gloomy as oil fell and other commodities sagged as well – especially iron ore.
What a difference a day or two makes and in Australia our market is heading for the strongest opening for yonks after reaching their highest level for seven years on Tuesday.
That seven year high will be extended today, judging by the futures market’s enthusiasm overnight.
Driving our market higher yesterday was the rise in oil and iron ore prices (along with gold, which partially reversed that gain overnight) and the surprise rate cut from the Reserve Bank.
Data for US car sales in January showed the likes of Ford, GM, Nissan and Chrysler reporting double digit gains, especially in sales of petrol guzzling SUVs, which are now back in fashion.
West Texas Intermediate crude soared 6.6% to $US52.86 a barrel, while Brent, rose 5.4% to $US57.71.
US small cap stocks also rallied, with the Russell 2000 index up 1.2%, thanks to solid rises for the flock of small and mid cap oil and gas explorers and producers which had been flattened by the price plunge for oil (and gas).
But will it all end tonight? Watch out for the weekly report on oil production and stocks from the US Energy Information Agency tonight our time.
If the EIA report shows, as many expect, a rise in production, stocks and low storage levels, US analysts expect the oil prices to sell off sharply.
And the Aussie dollar climbed back over 78 US cents )up around 1.3 cents in less than 12 hours), but fell back to around 79.95 at 8.30 am in Asian trading.
