Commodity prices fell again last night, but our market will ignore that today, judging by trading on the share futures contract which shows the ASX 200 starting flat this morning.
That followed a fall in the US market where the stockmarket halved its losses in the last hour to close around half a per cent lower.
Our investors yesterday and overnight shrugged off the weak news from China and another fall in the Shanghai market.
Our market was down a lot early on, but recovered after the weak manufacturing data from China was released.
The ASX 200 lost 0.3% 20 points, to 5679.3 while the All Ordinaries dropped 17 points to 5664.3.
The loss on the ASX futures market was flat at the end this morning, a bullish stance given the flow of negative news. Will locals carry on, or sell off?
But helping offset any negative feeling will be the 4% jump in sport iron ore prices overnight to $US55.63 a tonne, which was contrary to falls in the iron ore futures market during trading. That was one of the few positives for the commodities sector.
Wall Street responded negatively to the fall in energy prices, and the weak manufacturing data from China, parts of Europe and the US where activity fell in July. Consumer spending also slowed.
Commodity prices fell to their lowest level since 2009, according to the Thomson Reuters Core Commodity CRB index.
It is heavily skewed by oil which accounts for 23% of the index (it covers 19 commodities) and US and global oil prices fell overnight by 3%.
Traders in our share market futures ignored those negative leads. The Aussie dollar slid under 73 US cents and touched 72.67 in trading this morning, close to new six year lows.
The Canadian dollar though fell to 11 year lows overnight as the US currency strengthened.
Reuters said concerns about China’s economy hurt US industrial shares, led by Apple which delivers much of its new its iPhone sales.
Reuters said a report from a market research firm showed Apple lost smartphone market share in China in the second quarter. Its shares fell 2.4% percent, and helping to drag down the Nasdaq and the S&P 500.
The Financial Times said Apple shares closed at their lowest level since January this morning at $US118.19, 10% under the pre earnings high of $US133 two weeks tonight. Twitter shares meanwhile fell to their all time low of $US29.27.
The Dow fell 0.5% to end at 17,598.2. The S&P 500 dropped 0.3% to 2,098.04 and the Nasdaq Composite lost a quarter of a per cent to 5,115.38.
In New York, West Texas Intermediate crude for September delivery fell $US1.95, or 4.1%, to settle at $US45.17 a barrel, the lowest close since March. In London, Brent futures for September on Monday dropped below $US50 a barrel for the first time since January.
Brent dropped $US2.39, or 5%, to $US49.81 a barrel.
Crude was driven lower by continuing concerns over global and US supplies (which are still growing), as well as the weak economic data out of China.
Gold futures started August on a weak note. December metal on Comex in New York lost $US5.70, or 0.5%, to $US1,089.40 an ounce. In July, gold lost 6.5%, the biggest fall since 12% plus in June, 2013.
Meanwhile, Comex September copper lost nearly 1% to end at $US2.35 a pound, a six-year low for the metal, which has been driven lower by worries about global consumption, especially in China.
But watch Shanghai again – it is an important indicator for China at the moment – as a tracker of sentiment, not economic activity. The Shanghai index fell 1.11% yesterday after being down 4% at one stage, while the Hong Kong market fell 0.9%.
