Our market is heading for another strong opening this morning after a wild, volatile day on Wall Street that was only saved from being a near wipeout by a surge in the last 10 to 15 minutes of trading.
With an hour to go, Wall Street was slowing as the solid gains earlier in the day (off the back of a surge in European markets of 3% and, a 10% jump in oil futures prices, higher base metal prices, and news that US economic growth jumped to an annual rate of 3.7% annual in the June quarter (or 0.9%).
The S&P 500 cut a 2.5% early advance to one of just over 0.4%, while the Dow slowed from a rise of 2.4% early on to be up just 0.3% as momentum seemingly exhausted itself and the impact of those positives faded.
Analysts said Wall Street was setting itself up for a repeat of a couple of days ago when an early surge turned into a late bust.
But then in the last 30 minutes the market started rising strongly, and surged in the closing 10 minutes to end with very solid gains.
So it’s no wonder our futures market followed Wall Street, and closed showing a 90 point gain for the ASX 200, on top of yesterday’s 61% or 1.2% jump.
The Dow rose 369.26 points, or 2.3%, to end at 16,654.77. (Earlier, the Dow was up by as many as 381 points).
The S&P 500 added 47.15 points, or 2.4% to 1,987.66, after posting a 49-point gain earlier. And the Nasdaq Composite climbed 115.17 points, or 2.5% to end at 4,812.71, after being up by as many as 121 points.
As a result, for the week, the Dow is up 1.2%, the S&P is 0.9% higher, and the Nasdaq is up 2.3%.
And reflecting the intense volatility of the past week or so, by the close this morning the Dow has ended with a gain or loss of at least 200 points for a sixth consecutive session – something the Dow has never done, according to Dow Jones data.
Desperate oil industry traders pushed oil futures in the US and Europe up sharply after almost broke Venezuela reportedly asked the OPEC to hold an emergency meeting. Those gains won’t last because Saudi Arabia has shown no sign of relaxing its production surge. Venezuela is broke after years of mismanagement by the government.
In New York, West Texas Intermediate crude for delivery in October jumped $US3.96, or 10.3%, to settle at $US42.56 a barrel (it is now starting to ease in early Asian trading). It was the largest single-session percentage gain for a most-active contract since March 2009.
In London, October Brent crude on London’s ICE Futures exchange climbed $US4.42, or 10.3%, to $US47.56 a barrel for the biggest percentage gain since December 2008, according to Marketwatch.com. data. That saw US copper futures on Comex rise 4.2%. In London zinc surged the most since June 2012, copper was up more than 4 per cent and aluminium and nickel also rose. For how long these gains will remain in the market is the big question – not long seems to be the most obvious answer.
