Opening Call: The Australian share market is to open higher.
U.S. stocks were mostly higher after the market digested an abundance of economic data and Fed minutes revealed officials think inflation pressures could linger longer than previously thought. The yield on the 10-year Treasury settled lower, then ticked higher to 1.64%. The WSJ Dollar Index strengthened to 90.5. U.S. oil prices edged lower after an unexpected increase in U.S. inventories. Gold prices edged higher. U.S. markets will be closed for the Thanksgiving holiday on Thursday.
Australia’s S&P/ASX 200 edged 0.15% lower, as strength in energy producers and providers was more than offset by weakness elsewhere. The benchmark followed a mixed lead from U.S. equities by spending the session bouncing on either side of the gain-line in a narrow 43-point range. The heavyweight financial and materials sectors, which comprise about 45% of the ASX 200 by market capitalization, slipped by 0.3% and 0.2%, respectively.
A rally in shares of technology companies pushed stocks higher, as investors shrugged off concerns about elevated inflation. The S&P 500 rose 0.2% in afternoon trading after wobbling throughout the day. The Dow Jones Industrial Average was about flat. The Nasdaq Composite advanced about 0.4%. U.S. stocks have swung between gains and losses this week as investors have digested a slew of data in a trading week shortened by the Thanksgiving holiday.
New figures showed that household spending rose 1.3% in October from a month earlier, while personal income increased 0.5%. Weekly jobless claims, meanwhile, fell sharply to the lowest level in 52 years.
Gold prices ended slightly higher, snapping a four-session decline, despite a rise in the U.S. dollar and a batch of mostly upbeat U.S. economic reports. December gold futures picked up less than 0.1% to settle at $1,784.30 an ounce, after slumping 1.2% on Tuesday. That bruising session marked the lowest finish for a most-active contract since Nov. 3., and followed a 2.4% drop the day before, FactSet data show.
Oil futures ticked lower after data showed a build in U.S. crude inventories and as traders await OPEC+’s response to a coordinated release of strategic reserves by several countries. West Texas Intermediate crude for January delivery settled 0.1% lower to $78.39 a barrel on the New York Mercantile Exchange. January Brent crude, the global benchmark, shed 0.1% to end at $82.25 a barrel on ICE Futures Europe.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from US$1.1255 to lows near US$1.1185 and was near US$1.1200 in afternoon US trade. The Aussie dollar fell from highs near US72.25 cents to lows near US71.85 cents and was near US71.95 cents in afternoon US trade. And the Japanese yen fell from 114.82 yen per US dollar to JPY115.47 and was at JPY115.38 in afternoon US trade.
European sharemarkets were mixed on Wednesday. Travel stocks fell 1% on rising Covid case numbers. But the telecoms sector rose 1.2% with KKR said to be boosting its offer for Telecom Italia. Olaf Scholz is set to become the new German Chancellor. The pan-European STOXX 600 index rose by 0.1%. The German Dax index lost 0.4%. But the UK FTSE index rose by 0.3%. In London trade, shares in Rio Tinto rose by 1.0% and BHP rose by 0.8%.
Earlier Wednesday, Chinese stocks ended mixed, with the benchmark Shanghai Composite Index edging 0.1% higher and the Shenzhen Composite Index flat. The ChiNext Price Index lost 0.4%. Consumer goods and services providers were among the top gainers amid hopes for rising demand as the year-end holiday season approaches. Shares of beverage makers and film-production companies tracked higher. The momentum was offset by weakness in agriculture stocks such as chicken and hog producers and crop-farming companies, which were weighed by recent weak pork prices.
Hong Kong shares edged higher, partly boosted by the financial sector, amid rising U.S. bond yields on market expectations for the Fed to tighten monetary policy, analysts said. The benchmark Hang Seng Index eked out a 0.1% gain, snapping a five-session losing streak. China’s vice-premier Liu He, writing in the People’s Daily, signalled property sector curbs will be maintained to stabilize housing prices. The Hang Seng Mainland Properties Index fell 1.5%. Japan’s Nikkei Stock Average slipped 1.6% amid concerns over U.S. rate increases after Fed Chair Powell’s renomination. With the overnight weakness of tech-heavy Nasdaq, losses on Japan’s benchmark index were led by technology firms.