The local stockmarket should start with a small gain this morning after the share price futures contract resisted a late slide on Wall Street to close up 17 points.
The gains overnight on the share price index belied a slide in the US dollar as well, which in turn saw solid rises by a host of other currencies and commodities.
Oil and gold edged higher and the Aussie dollar jumped by more than 1.5 cents to trade around 77.75 US cents in early Asian trading this morning.
Iron ore spot prices in China added 1.9% to $US63.02 a tonne, which should also be positive.
But you never know – yesterday the market was down to open flattish, but it started falling from the get go and the slide continued throughout the day, added to by the RBA decision on interest rates.
The small rise in the local futures market should help settle investor nerves after the sharp slide in the wake of the Reserve Bank’s decision not to cut rates and restrained future guidance on rates.
The near 100 point fall in the ASX 200 was a shock to many investors as the market fell throughout the day, led down by banks which continue to lose favour among investors of all sizes.
Wall Street ended slightly lower, as earlier gains disappeared by the close. Analysts say US investors are starting to get cautious ahead of Friday night’s release of the May jobs data which will be a major influence on sentiment and thinking about the Fed;’s next move on interest rates.
More weak data during the day – but not near record car sales – helped push the US dollar lower in a fall that caught some traders by surprise.
The S&P 500 lost just 2.13 points, or 0.1%, at 2,109.60. The Dow lost 28.43 points, or 0.2%, to 18,011.94 and the Nasdaq finished the day down 6.40 points, or 0.1%, at 5,076.52.
European shares were also mixed, with falls in London, Paris and Germany. Italian and Spanish markets edged higher.
US and European bond yields sold off, with US yields suffering the largest two day rise in a year.
Chinese shares closed higher, with the Shanghai Composite Index up 1.7% at 4,910.53 points.
Japan’s Nikkei Stock Average rose for most of Tuesday and appeared to be on track for a 13th day of gains, but faded at the end to close down 0.1%, as the yen fell to levels not seen in more than a decade.
The Nikkei is up 5% over the past 12 trading days.
US car sales hit their highest level for just on a decade.
US car and light truck sales reached a seasonally adjusted annual rate of 17.79 million in May, up from 16.5 million in April, the highest rate since July 2005.
US retail sales are weak, but car sales are very strong – and you know what? That’s just what is happening in Australia and much of Europe and the UK.
