It looks like being a solid day for the ASX after Wall Street’s bounce continued with the S&P 500 closing above 3,000 for the first time since March 5, as the further easing of lockdowns lifted optimism for an economic recovery.
Investors once again ignored more tension between the US and China – this time over the future of Hong Kong with the Trump administration preparing the way for an end to the region’s exempt status from American tariffs on imports from the mainland.
US bank stocks led the way with another strong gain – the S&P 500 financial index is up rose nearly 10% over the past two sessions for its biggest two-day increase since April 8-9.
Megabank, JPMorgan led the charge higher with a 5.8% gain, its second big rise in as many days.
That mirrors the experience in Australia where a similar huge three-day rally has dragged the wider market higher.
US investors also ignored the Fed’s so-called Beige book which is a summary of business anecdotes from the central bank’s 12 regions – the overwhelming tone of the report was gloomy with businesses not confident at all about current and future economic conditions.
Local trading in Australia will start with a solid gain of around 50 points for the ASX 200 this morning after the overnight future session.
That will be in contrast to the negative start yesterday after a weak night for futures. The ASX 200 ended down 5 points despite the big bank rally which at one stage had dragged the wider market into the green.
This all saw the Dow end up 553.16 points, or 2.21%, at 25,548.27, the S&P 500 add 44.36 points, or 1.48%, to close at 3,036.13, and the Nasdaq add 72.14 points, or 0.77%, to finish at 9,412.36.
Elsewhere oil futures retreated on the rising US-China tensions, talk Russia wasn’t interested in continuing deep production cuts past the end of June and the Beige Book comments.
Brent crude futures fell 4.6% or $US1.65 to $US34.52 a barrel in Europe, while the US marker, West Texas Intermediate (WTI) crude lost 4.5% or $US1.54, to settle at $US32.81.
Comex August gold, which is now the most-active contract also fell – losing $US1.40, or 0.08%, to settle at $US1,726.80 an ounce, off the day’s low of $US1,701.60.
Comex July silver futures ended the near session high, up 16.2 cents, or 0.9%, at $US17.757 an ounce and Comex July copper settled 1.7% lower at $US2.38 a pound.
Seaborne iron ore prices regained some stability on Wednesday May 27, after Tuesday’s fall. The price of 62% Fe fines delivered to northern China was up 9 cents to $US95.37 a tonne.