Opening Call: The Australian share market is to open higher.
U.S. stocks rose as weekly jobless claims fell slightly. Treasury yields rose, with the 10-year yield back to mid-July levels, at 1.37%. The WSJ Dollar Index rose to 87.61, helping push gold prices lower. Oil prices slipped as investors worried whether demand could stay relatively strong.
Australia’s S&P/ASX 200 edged less than 0.1% higher, notching a fresh record amid gains by commodity stocks and the positive outlook that accompanied Telstra’s results. The benchmark was 0.3% higher in early trade, in line with ASX futures, but it faded through the session and was in the red until a late surge. It was the ASX 200’s third consecutive record close.
U.S. stocks rose after fresh labour-market data provided insight on the pace of the recovery. The S&P 500 gained 0.3% and the Dow Jones Industrial Average rose less than 0.1% in 4 p.m. trading, with both indexes closing at new all-time highs. The Nasdaq Composite rose 0.4%.
Recently, a robust earnings season and signs of an improving economy have driven both the Dow Jones Industrial Average and the S&P 500 to record highs. Still, surging cases related to the Delta variant of the coronavirus have raised concerns about the recovery.
“Earnings have been nothing short of spectacular,” said Jeff Schulze, investment strategist at ClearBridge Investments. “It’s everything you want to see as an investor. In my opinion, it’s one of the reasons why you haven’t seen a larger selloff at this point in the cycle, which is normally what you see.”
Gold futures also settled lower, a day after the commodity marked the first back-to-back advance in about a month and the sharpest daily gains in two weeks. “There is no way to hide from inflation right now, especially given low rates and only discussion of Fed tapering,” said Jeff Wright, chief investment officer at Wolfpack Capital, adding that in reaction, the U.S. dollar and U.S. Treasury yields have risen a bit.
“All of these factors are leading gold to go lower,” Mr. Wright said. “Gold could be heading towards $1,700 given lack of interest and momentum. “December gold futures lost about 0.1% to settle at $1,751.80 an ounce.
Oil futures posted a modest decline after monthly reports from the International Energy Agency and the Organization of the Petroleum Exporting Countries raised concerns over prospects for demand growth.
In its monthly report, the Paris-based IEA said it “appreciably downgraded” its outlook for growth in demand this year by 100,000 barrels a day, while upgrading its outlook for 2022 by 200,000 barrels a day. Separately, OPEC left its forecasts for 2021 and 2022 growth unchanged, while lifting its projection of non-OPEC supply.
West Texas Intermediate crude for September delivery fell 0.2% to settle at $69.09 a barrel on the New York Mercantile Exchange. October Brent crude, the global benchmark, lost 0.2% to settle at $71.31 a barrel on ICE Futures Europe.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.1747 to lows near US$1.1723 and was near US$1.1735 at the US close. The Aussie dollar eased from highs near US73.69 cents to lows near US73.31 cents and was near US73.35 cents at the US close. The Japanese yen firmed from near 110.52 yen per US dollar to JPY110.32 and was near JPY110.45 at the US close.
European sharemarkets were mixed on Thursday. The pan-European STOXX 600 index rose by 0.1%, hitting record highs for a ninth consecutive session. The German Dax index also scaled new peaks, up by 0.7%, but the UK FTSE index slid 0.4%. The UK economy, as measured by GDP, grew by a faster-than-expected 1.0% in June (survey: +0.8%). UK-listed shares in Rio Tinto slid 5.5% after trading ex-dividend and BHP shares fell by 1.4%.
Earlier Thursday, Chinese stocks retreated, amid losses in consumer-related sectors including liquor and home-appliance makers, offsetting gains in auto shares. The Shanghai Composite Index slipped 0.2%, the Shenzhen Composite Index declined 0.3% and the ChiNext Price Index dropped 1.5%.
Hong Kong stocks fell, dragged lower by technology and insurance companies. The Hang Seng Index lost 0.5%, while the Hang Seng Tech Index shed 1.5%. Japan’s Nikkei Stock Average gave up early gains to close 0.2% lower, as losses in railway and electronics shares offset gains in financial stocks.