The ASX is looking at a modest rise of around 12 points this morning after overnight trading on the ASX 24 futures platform closed with a modest gain.
That was after a small rise on Wall Street – a move that persisted despite the Democrats ruling out any selective stimulus spending (as Donald Trump claims he wants) and further signs the US labour market is struggling to maintain momentum.
Wall Street rose to a month high on Thursday. The Dow rose 122.05 points, or 0.43%, to end at 28,425.51, the S&P 500 gained 27.38 points, or 0.80%, to close at 3,446.83 and the Nasdaq added 56.38 points, or 0.5%, to finish at 11,420.98.
Despite Donald Trump claiming in an interview with friendly Fox News that talks with Congress have restarted over further COVID-19 relief with what he claimed was a good chance, a deal could be reached, House of Representatives Speaker Nancy Pelosi said legislation to help airlines was a matter of national security and would only move through Congress with guarantees of work continuing on the comprehensive stimulus spending deal.
On top of this, investors are now starting to factor in the rising chances of a big win in the November 3 polls by the Democrats.
“What the market is actually starting to warm up to a Democratic sweep in the election cycle. If it’s a decisive win, you take away the drama of a contested election,” Art Hogan, chief market strategist at National Securities in New York told Reuters.
Initial claims for state unemployment benefits totaled a seasonally adjusted 840,000 for the week ended October 3, compared with an upwardly revised 849,000 in the week before, according to the US Labor Department.
Reuters pointed out that while last week’s level of new claims was the lowest since March, they have stalled at historically high levels after dropping below 1 million in August as the government changed the way it strips seasonal fluctuations from the data.
They are still above their 665,000 peak during the 2007-09 Great Recession, though filings have dropped from a record 6.867 million at the end of March.
Oil prices rose again as Hurricane Delta moved closer to the US Gulf Coast.That saw West Texas Intermediate crude for November delivery rise $US1.24, or 3.1%, to settle at $US41.19 a barrel in New York.
In Europe, December Brent crude rose $US1.35, or 3.2%, at $US43.34 a barrel.
Gold also rose – Comex December metal edged up $US4.30, or 0.2%, to settle at $US1,895.10 an ounce, while December silver gave up earlier gains to finish with a loss of 2 cents, or 0.08%, at $US23.876 an ounce. Comex December copper was up 0.3% to settle at $US3.042 a pound.
A notable bit of news on Thursday was historic – IBM says it is splitting itself into two companies – a move that saw the shares rise 6%.
IBM is the company that brought the computer revolution to Wall Street and for years was an earnings and revenue powerhouse with its mainframes and other machines. But it failed to master the internet.
Now its splitting, ending the decades-long effort to diversify away from its legacy businesses to focus on high-margin cloud computing.
It a decision that ends an era in US stockmarket investing.
Meanwhile, the small rise in the ASX today, if sustained, could see the market end with a rare five up sessions in a row.
The ASX 200 on Thursday recorded four straight days of gains for the first time since early July, when the market was rebounding from its March lows.
The index ended up 66 points or nearly 1.10% at 6,102 – meaning a gain for the week so far of close to 6% and around $100 billion in added value.
