The ASX is heading for its second positive start in as many days after Wall Street rose strongly on the first day of December, with the S&P 500 and Nasdaq setting new highs.
The surge in Nasdaq of well over 1% continues to slow retracing of the rotation that happened in November on news of the trio of COVID-19 vaccine candidates.
More bad news on rising infection numbers in the US, more signs of a slowing pace of economic activity are returning to worry investors. But confidence in the new vaccines reigns supreme and helped the new records on Tuesday.
The Dow was up 0.63%, or 185.28 points at 29,823..92 points, the S&P 500 added 1.13% or 40.82 points to end at 3,662.45 and the Nasdaq added 1.28% or 156.37 points to finish at 12,355.11.
All three measures were higher in early afternoon trading but eased towards the close.
The trio were up more than 10% in November and the start to December saw that positive trend continue as investors overlooked the Thanksgiving slowdown last week.
News that a bi-partisan members of Congress have agreed on a $US900 billion new stimulus package helped to reassure investors a little, but the wait for approvals for the vaccines to be manufactured and distributed would be of greater importance as the US heads in what is looking like a miserable Christmas.
Later news that Republican Senate leader Mitch McConnell had rejected the package idea didn’t seem to cause much worry as the negotiations start.
The ASX 200 futures platform had the ASX 200 looking for a 31 point gain at the start at 10 am – that was down from the 42 plus gain a couple of hours earlier.
A sharp rise in gold prices, higher copper, iron ore and aluminium prices will also add to the positive message for local investors, but oil weakened when the market had been expecting an agreement to keep the current production cap in place for the first quarter of 2021.
Those talks failed to reach agreement and will now continue on Thursday. Russia is the major sticking point, it wants to be able to produce more oil to take advantage of rising prices to help its battered state finances.
A 30 point gain today would continue the more upbeat trend. Economic data is positive – the National Accounts for the September quarter are expected to show a bounce back into the black from the 7% contraction in the June quarter.
But the growing dispute with China is starting to eat away at confidence and the trade surplus (helped by the impact of COVID) and helped slash the current account surplus for the September quarter.
The ASX200 was up 1.4% at one stage on Tuesday but halved that gain with an afternoon sag. It still ended on a solid note up 70.7 points, or 1.1%, at 6,588.5.