No wonder our market will start flat today – trading overnight was confusing to say the least and the enthusiasm from yesterday’s 2.1% surge here vanished by the time it got to Wall Street.
The S&P 500 closed down 2 points, or 0.1%, at 2,081; the Dow was down 4 points, or less than 0.1%, to 17,7333 and the Nasdaq ended the day down 2 points, or less than 0.1%, at 5,074.
After the previous day’s solid gains, it was a lacklustre session for the market. Investors in the US are impatient, they want to get the rate rise out of the way, judging by the way more and more analysts are focusing on the next rate rise and the one after that and the timing.
European shares continued the solid rebound that had started in Asia, but as a sell-off developed in the US dollar, up went gold, but not other commodity prices, and Wall Street opened flat and went sideways.
Compounding the loss of confidence were some mixed news on earnings and continuing adjustment to the almost certain rate rise from the Fed next month.
So as a result the overnight futures market for the ASX 200 was left without a gain or loss at the close, so our market will start fitfully until it can pick up trends from offshore, or from another weak night for most major commodities
The Aussie dollar jumped sharply as the greenback fell (which lost 0.7% against a basket of its six major peers). The Aussie peaked at 72.15 US cents and just after 8 am was trading at 71.93 US cents – up around a cent on the night.
Another slide in the value of iron ore won’t help local sentiment – it fell to $US45.10 a tonne last night, just $US1 a tonne off the seven year low hit in early July.
Gold futures rose as they usually do when the greenback slides – up to $US1,077 an ounce on Comex in New York at the settlement and up $US12 in after hours trading to around $US1,081 an ounce.
Comex December silver futures also rallied, adding 14.1 cents, or 1%, to finish at $US14.222 an ounce.
But Comex copper futures for December delivery finished less than a penny lower $US2.0765 a pound. And that is probably the real story from the night – the dollar’s weakness, normally a positive for most commodities like copper (it is priced in US$) failed to have an impact on this important indicator commodity for Chinese and global economic growth. That tells us the underlying support for most commodities remains weak and undermined by those continuing fears about the US rate rise, and the health of Chinese growth and demand.
