Monday Market Minutes: Strong US Session Sets the Tone

By Glenn Dyer | More Articles by Glenn Dyer

The ASX is heading for one of its strongest starts this year after the overnight futures surged more than 100 points on Friday off the back of a solid session on Wall Street and better than expected US jobs data for February.

ASX 200 futures trading closed early Saturday with a gain of 107 points.

The expected rise today will more than offset the 50 point or 0.7% slide on Friday which still left the ASX with a gain of 0.55% for the week.

The futures gain was boosted by the strong close to the week on Wall Street.

The Dow rose 572.16 points, or 1.85%, to 31,496.3, the S&P 500 added 73.47 points, or 1.95%, to 3,841.94 and the Nasdaq Composite jumped 196.68 points, or 1.55%, to 12,920.15 (after being down 2.6% at one stage in the session).

For the week the Dow rose 1.8%, the S&P 500 was up 0.8% but the Nasdaq lost 2%, but Friday’s gain dragged it back from the edge of a correction.

The Nasdaq has slumped 8.3% since its February 12 closing record, over three times the decline for the S&P 500. Drops in popular growth stocks have been even steeper, with Tesla shares off 27% and Peloton down 32%.

In Europe, the STOXX 600 index lost 0.78% on Friday but still rose 0.5% over the week. Asian markets were down (with the ASX). Japanese shares fell 0.4% and Chinese shares lost 1.4% as the country’s rubberstamp National People’s Congress started its annual meeting.

MSCI’s global index added 0.63%. Emerging market stocks lost 0.52%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.8% lower, while Japan’s Nikkei lost 0.23%.

The yield on 10-year US Treasury notes was up 2 basis points to 1.570%. The yield climbed as high as 1.625%, its highest since February 13 last year.

Demand for the dollar rose off the back of the news that 379,000 jobs were created in the US in February, more than double the 182,000 forecast from some economists. The jobless rate dipped to 6.2% from 6.3%.

The US dollar index jumped as high as 92.201, the highest since late before retracing back to 91.965.

The Aussie dollar weakened for the second Friday in a row, ending the week at 76.84, lower than the previous Friday’s close of 77.07 US cents.

The euro was down 0.43% to $1.1915. The Japanese yen weakened 0.39% versus the greenback, last at 108.37 per dollar, its lowest since June.

The strong dollar sank gold prices to a nine-month low as investors sold the precious metal to reduce the opportunity cost of holding the non-yielding asset.

Comex gold futures fell 0.22% to $US1,698.50 an ounce, oil rose, and iron ore also dipped.

 

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.

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