Flat trading likely in absence of offshore leads

By Glenn Dyer | More Articles by Glenn Dyer

The ASX looks like opening flat after a lacklustre day on global markets on Monday.

The overnight futures market has a small one point loss at the close, mirroring the flat lead from Wall Street. Gold and iron ore rose but oil and copper fell sharply.

Wall Street’s main indexes closed lower on Monday as investors on scattered profits after last week’s record levels as they watched the mounting COVID-19 toll and events in Washington with growing concern.

And with the normal twitches about the 4th quarter earnings season starting this week and really hitting its straps on Friday with four big banks due to report, investors weren’t as gungho about the outlook as they were last week.

The Dow fell 89.28 points, or 0.29%, to 31,008.69, the S&P 500 lost 25.07 points, or 0.66%, to 3,799.61 and the Nasdaq shed 165.54 points, or 1.25%, to 13,036.43.

The 0.8% slide in the ASX 200 on Monday was driven by weaker gold prices and a sense of unease about events in the US. And with more of that overnight (gold weakened in after hours trading), local investors are likely to be hesitant.

Gold steadied and then rose Monday offshore with Comex futures settling up 0.8% at $US1,850.80. By the start of Asian dealings that had easedback to around $US1,844 an ounce.

Comex silver added 1.7% to just over $US25 but Comex copper sold off, falling 2.7% to just over $US3.56 a pound, despite good inflation data from China for December.

Oil prices weakened a touch with Brent down 33 cents to settle at $US55.66 a barrel, after bouncing off a session low of $54.99. US benchmark, West Texas Intermediate (WTI) rose a cent to settle at $US52.25 a barrel.

Iron ore prices edged down – the price of 62% Fe fines delivered to northern China fell 93 cents to $US172.13 but the price of 65% Fe fines (from brazil) rose $US1.70 to $US193.70 as steel mills sought higher grade ore for its better yields (which are more desirable when prices are high) compared to the 62% and 58% grades.

Shares of Twitter fell 6.4% and weighed on the communications sector after the micro-blogging site permanently suspended President Trump’s account.

Reuters pointed out that this is a blip – Twitter shares are still more than 160% higher that where they traded before Trump won the Presidential election in November, 2016.

Tesla shares also dipped, down 7.8% in regular trading and off a further 0.27% in after hours trading to be around $809.50. At that level its market value is still high – more than $US830 billion.

 

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →