The ASX is headed for a strong start later today after a 64 point jump in overnight futures market on Friday, despite a weak end to the week for Wall Street amid more unease about China.
But with Wall Street closed tonight for the Memorial Day holiday, local traders could be loath to go out on a limb and take the market sharply higher today in the absence of a lead coming tonight from the US.
Friday’s large 5.6% slump in Hong Kong’s Hang Seng index was ignored by ASX futures traders, as was news that China had dropped its GDP growth target for 2020.
The mixed news from China was also ignored in Europe where the STOXX 600 index rose 0.2% and in the US where Wall Street’s S&P 500 index edged higher.
So our market is looking at a 1.2% gain in the ASX 200 at the open at 10 am. That was despite Friday’s 53.4 points, or 1% slide in the ASX 200 to end at 5,497.0.
That left the ASX up 1.7% for the week.
Other global markets also had a strong week with the exception of China.
For the week US shares rose 3.2% reaching a new recovery high, Eurozone shares rose 4.4% and Japanese shares rose 1.8% but Chinese shares fell 2.3%.
Bond yields rose in the US and Germany but fell in Australia and the UK with sharp falls in Italy and Spain.
Oil, metal and iron ore prices rose as did the Australian dollar with the US dollar pulling back a bit.
On Friday the Dow fell 8.96 points, or less than 0.1%, to end at 24,465.16, weighed by shares of Caterpillar and Chevron which weakened.
The S&P 500 index closed a tiny 6.94 points higher, or 0.2%, at 2,955.45. The Nasdaq was up 0.4% higher to finish the week at 9,324.59, a gain of 39.71 points.
For the week, the Dow climbed 3.3%, the S&P 500 added 3.2% and the Nasdaq Composite rose 3.4%.
Rental car giant, Hertz, the second-largest, collapsed on Friday night with debts of at least $US18.7 billion. It is the largest corporate collapse so far in the US in the era of COVID-19. The question now for investors is where the debt losses will appear.
