‘Ullo, ‘ullo, ‘ullo, what’s going on here on Wall Street? Amid all the recent turmoil, the big board has equalled its longest winning streak of the year – four days in a row for the S&P 500 and for 2022’s laggard, the Nasdaq.
Something not quite right here – and commodity prices right-sized themselves as well?
And all this bullishness before the monthly US jobs report tonight?
Ahhh, a little investigation finds the answer – a slightly larger than forecast (235,000) rise in US initial unemployment benefit numbers.
So the positive for today was a small negative – in fact one or two small positives as well.
And for the ASX? A 49-point jump for the opening, according to the futures market? How bullish.
The Dow gained 346.87 points, or about 1.12%, to close at 31,384.55. The S&P 500 added 1.50% to 3,902.62, while Nasdaq jumped a solid 2.28% to 11,621.35.
The S&P 500 notched a four-day winning streak, matching its best stretch of the year.
Oil prices rebounded from Wednesday’s sell-off and that added to the strength on Wall Street with shares in Exxon up 3.2%.
Shares Occidental Petroleum also rose -up nearly 4% in regular trading before it was revealed that Warren Buffett’s Berkshire Hathaway company had snapped up another 12 million Occidental shares, on top of the 9 million revealed last week.
So why the gains? Well, initial jobless claims for the week ticked up slightly last week while the US trade deficit for May came in slightly higher than expected at $US85.5 billion but was still down month over month.
Economists expect a gain of 250,000 jobs for the US last month in Friday night’s report which would be a slowdown from the 390,000 added in May.
Helping the bullish tone was a change of heart from economists at Goldman Sachs which sliced its second-quarter outlook for GDP to just 0.7%, down from the previous expectation of a 1.9% increase.
Analysts reckon that if the US economy is slowing, the Fed will wind back on its aggressive rate rise campaign.
Combined with the March quarter contraction of 1.5%, that would bring the first half to within a whisker of a recession.
Commodities rose led by US wheat futures which jumped 4% on Thursday.
A rise in US bond yields with the 10-year yield back at the 3% mark meant Comex gold hardly moved, settling at $US1,739.70 and still around 9 month lows.
The US dollar though eased with the ICE index down to 107.04.
The Aussie dollar bounced back past 68 US cents late Thursday and ended close to 68.45 in early Asian trade Friday.
Comex copper jumped 4.8% to settle at $US3.58 a pound.
Oil rose – US crude rose more than 4% to settle at $US102.73 while Brent jumped nearly 4% to settle at $US104.65 a barrel.
Iron ore futures rose by around $US3 a tonne on the Singapore market Thursday to end at $US114.45 a tonne for 62% Fe fines delivered to northern China. Australian hard coking coal futures though drifted lower to around $US245 a tonne.
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Twitter shares fell around 4% in afterhours dealing early Friday, Sydney time, after the Washington Post reported that Elon Musk was moving away from his $US44 billion offer.
Twitter shares had been up more than 1.5% in regular trading but sold off in afterhours dealings after the Post story appeared.
The deal was already in uncertain territory since Musk had demanded more information on the percentage of spam accounts on the platform
Twitter held a virtual briefing with reporters earlier on Thursday to explain how it determines which of the accounts on its platform are bots or spam accounts.
The Post, citing one unnamed source, claimed Musk’s team has stopped engaging in some funding discussions for the $4US4 billion deal.
Musk’s team has determined it can’t verify Twitter’s spam account figures and they are now prepared to soon make “a change in direction,” the Post reported, citing a source.
Later media stories claimed Twitter also laid off staff this week. Twitter confirmed that 30% of its ’talent acquisition team’ had been cut but wouldn’t give a number.
Analysts wonder if Musk will step up the pressure by trying to walk in the next day or so with the Washington Post story a ‘leak’ to soften up investors.
If he does try, Twitter will claim the $US1 billion break fee and Musk will claim that Twitter wasn’t transparent about the number of accounts, especially so-called spam and bot accounts.
At Thursday’s close, Twitter was valued at more than $US29 billion, way short of the $US44 billion bid from Musk.
