Monday 8th April 2019

OPENING CALL: The Australian market looks to open higher with SPI Futures up 32 points.

The S&P 500 climbed for the seventh trading session in a row after a positive but largely as-expected jobs report, capping a quiet week of trading in which stocks crept higher.

Overnight Summary


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Australian Market
US Markets

The S&P 500 climbed for the seventh trading session in a row after a positive but largely as-expected jobs report, capping a quiet week of trading in which stocks crept higher. The index’s winning streak, a cumulatively significant 3.1% rise through Friday, has been largely without a central catalyst. Many traders had said they were waiting to make substantial moves until Friday’s Labor Department report and the start of earnings season next week. Trading volumes in the past week have plumbed the lowest levels of the year, and the jobs report did little to embolden investors and traders to make big bets: Friday saw the second-fewest shares change hands of any trading day in 2019. Stocks moved slightly higher in Friday trading, with the Dow Jones Industrial Average adding 40.36 points, or 0.2%, to 26424.99 while the S&P 500 rose 13.35 points, or 0.5%, to 2892.74. The Nasdaq Composite performed the best, up 46.91 points, or 0.6%, to 7938.69, buoyed by rising biotechnology stocks. All three indexes posted weekly gains of at least 1.9%. Friday’s gains marked the longest winning streak for the S&P 500 since October 2017, according to Dow Jones Market Data. So far this year, the S&P 500 has jumped 15%, and the Nasdaq Composite has risen 20%. That big snap back has Mr. Amato a little wary, though, and he said he doesn’t anticipate the pace of gains to continue.

Matières premières

In other commodity markets, gold prices swung between small gains and losses before closing slightly higher, wobbling after a stronger-than-expected jobs report lifted confidence in the U.S. economy. Gold for June delivery, the most active futures contract, closed up 0.1% at $1,295.60 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices are up slightly for the year but down nearly 4% from their February 10-month highs, hurt by a stronger dollar and recovery in Treasury yields. Still, gold ended higher as the 10-year yield edged lower to 2.501%, according to Tradeweb, from 2.512% a day earlier. Bond yields fall as prices rise. Elsewhere in precious metals, most-active silver futures added less than 0.1% to $15.086 a troy ounce. Platinum inched up 0.1% to $905.40, while palladium rose 1% to $1,345.90. Among base metals, most active copper futures inched down 0.5% to $2.8945 a pound. On the London Metal Exchange, aluminum for delivery in three months dropped 0.3% to $1,890 a metric ton. Zinc climbed 0.9% to $2,922, tin declined 0.4% to $21,000, nickel shed 0.7% to $13,071 and lead declined 0.4% to $1,985.50.

Iron Ore: 91.50s + 0.05 (May Contract)

Oil Futures

Oil prices climbed to five-month highs, boosted by economic data that showed strong growth in U.S. jobs. Light, sweet crude for May delivery gained 1.6% to $63.08 a barrel on the New York Mercantile Exchange, closing at the highest level since Nov. 5. Brent, the global oil benchmark, rose 1.4% to $70.34. Oil prices rose after the Labor Department reported that the U.S. economy added 196,000 jobs in March, exceeding economists’ expectations for 175,000 new jobs. The jobs report also showed that the unemployment rate held steady at 3.8% last month, just above a 49-year low. Dwindling fears of a global slowdown have helped push oil prices higher this year, after concerns over demand growth hit the market in 2018. Optimism over a possible U.S.-China trade deal also lent some support to the market Friday. President Trump said the two countries are aiming to reach a deal in the next four weeks. According to S&P Global Platts, production by the Organization of the Petroleum Exporting Countries fell to the lowest in more than four years in March, in part because of the steep decline in Venezuelan output. In Venezuela, crude production declined to the lowest level in more than 16 years, at 740,000 barrels a day. The cartel’s production dropped 570,000 barrels a day from its February level to 30.23 million barrels a day last month. Saudi Arabia’s production fell to its lowest level since February 2017. Oil prices have gained this year on discipline by major oil exporting countries to curb crude production, in an effort to eliminate a global surplus. OPEC, along with other allies including Russia, agreed in December to cut production by 1.2 million barrels a day this year. The number of rigs drilling for oil in the U.S. rose for the first time in seven weeks, up 15 in the past week according to Baker Hughes . The weekly report is often seen as a proxy for activity in the sector, with a climbing rig count indicative of increasing U.S. production.

Forex

The U.S. dollar rose as the latest jobs report showed that hiring bounced back in March, spurring confidence in the health of the domestic economy. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, rose 0.1% to 90.33. Though the yield on 10-year Treasurys ticked down Friday as bond prices rose, some analysts said that the strong jobs report could temper expectations of a rate cut. Higher Treasury yields can boost appetite for the dollar, making it more attractive to income-seeking investors around the world. The WSJ Dollar Index advanced about 0.6% this year through Thursday, hovering near its highest levels this year. The British pound fell about 0.5% against the dollar in recent trading, according to FactSet, as Prime Minister Theresa May requested an additional delay for Brexit.

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