A brief sugar rush for markets with the ASX looking for a 12 to 14 point gain later this morning, less than half what was on the board earlier in the overnight session.
The surge in oil and most stockmarket will cap a remarkable November up around 3.8% to 4% for both US crude and Brent futures (and a bad one for bond investors and emerging markets). But gold was on the receiving end with a fall of around 8%.
The 9% surge in world oil prices stalled at that level and started easing to be around 8% higher in early Asian dealings.
That will still see local oil and gas shares boosted (watch the likes of Woodside, Oil Search and Beach), but the slide in gold prices will knock the likes of Newcrest, Northern Star, St Barbara lower.
Copper prices edged higher which might soften the blow for the likes of OZ Minerals.
The Dow and the S&P 500 hit new highs early in the session, but Nasdaq was weak because of a string of negatives about some key stocks.
In fact all three key indexes peaked in the first half hour or so as investors reacted to the OPEC news, then slid as investors realised the news from OPEC was not shocking (either a bigger cut, or no cut at all) and about what was expected in the end.
The S&P 500 dipped into the red in the last half hour of the US session as the bloom went right off oil and other energy stocks.
Earlier European markets finished on the up with the Stoxx 600 index up 0.3% for a reasonable session. But that optimism couldn’t be extended through the full Wall Street session.
The Fed’s Beige Book of reports from the US economy ahead of the meeting in two weeks told of election worries, weaker demand in some areas, mixed activity in others, but no real concerns.
And all that saw traders conclude that a rate rise will emerge from the last fed meeting for 2016, just as a cut came out of the last meeting for 2015.
But investors are jumpy about the gathering slide in iron ore and coal prices in China and global markets so all eyes will be on Chinese futures markets wen trading starts around midday to 1pm Sydney time. It could be another rough afternoon session on the ASX
Chinese iron ore futures are down 14% or more (depending on the month being traded) since their peak in Monday when the spot price touched $US82 a tonne. That price was under $US70 a tonne overnight on some markets to just over$US69 a tonne.
Coking coal prices have fallen from $US300 a tonne to around $US285, thermal coal prices are now under $US80 a tonne – down 20% and more.
Gold, also considered a haven asset, fell 1.5% to $US1,170 an ounce, its lowest since early February and was trading around $US1,074 an ounce in Asia this morning.
Comex copper futures in New York rose 0.8% to just over $US2.63 a pound, going against the trend.
The US dollar rose, (which hit gold, but not copper and oil) and the Aussie dollar fell under 74 US cents for a loss of around a cent in the day.
The increasing risk appetite put more pressure on bonds. The yield on the 10-year US Treasury, rose 10 basis points to 2.39% before settling at 2.37%.
Remember the same bonds hit an all time low of 1.4% in July. Australian 10 year bonds hit a low of 1.83% – this morning they were around 2.72%.
