Friday: 16th February 2018 - US Markets Rally

OPENING CALL:  The Australian share market looks set to open firmly in positive territory, as US equities gain for their fifth straight session with investors seemingly forgetting their fears over inflation.

US stocks were led higher by tech stocks, in particular Apple which lifted 3.2 per cent after Warren Buffett’s Berkshire Hathaway made the iPhone maker its top investment.
Locally, in economic news on Friday, Reserve Bank of Australia governor Philip Lowe is due to give his half-yearly testimony before the federal parliament’s Economics Committee.
The U.S. dollar fell to its lowest level in more than three years intraday as renewed confidence among investors drew money away from the U.S. currency.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market
The Australian share market looks set to open firmly in positive
territory, as US equities gain for their fifth straight session with investors seemingly forgetting their fears over inflation.
Friday, the share price futures index was up 21 points, or 0.31 per Cent, at 5,883.
Locally, in economic news on Friday, Reserve Bank of Australia governor Philip Lowe is due to give his half-yearly testimony before the federal parliament’s Economics Committee.
In equities news, Medibank Private, The Star Entertainment Group, Primary Health Care, Village Roadshow, IOOF Holdings, iSelect, and Whitehaven Coal are expected to release earnings reports.
The Australian market on Thursday posted its best session in seven months due to positive half-year earnings results and strong gains for the miners and the energy producers.
The benchmark S&P/ASX200 index rose 67.8 points, or 1.16 per cent, to 5,909.0 points while the broader All Ordinaries index gained 68.7 points, or 1.16 per cent, to 6,008.7 points.
Meanwhile, the Australian dollar is hardly changed against its US counterpart which has continued to weaken in the offshore session.
The local currency was trading at 79.35 US cents at 0700 AEDT on Friday, from 79.37 on Thursday.
US Markets
Wall Street has climbed for a fifth straight session, led by Apple and other technology stocks as investors shrug off recent inflation worries that threw the market into a selloff at the start of February.
Apple Inc jumped 3.2 per cent and contributed more than any other stock to gains on the S&P 500 after Warren Buffett’s Berkshire Hathaway made the iPhone maker its top
investment.
A Labor Department report showed US producer prices rose in line with expectations in January, likely calming fears that inflation was picking up faster than expected.
Investors instead focused on recent strong quarterly earnings, and expectations that more earnings growth is still to come thanks to newly implemented corporate and personal
tax cuts.
At 3.04 pm ET, the Dow Jones Industrial Average was up 1.06 per cent at 25,157.68 points, while the S&P 500 had gained 0.97 per cent to 2,724.73 and the Nasdaq Composite had added 1.46 per cent to 7,247.64.
Commodities
Gold futures ended slightly lower, retreating from the highest finish in nearly three weeks, taking cues from a rally in stocks that hinted that investors were wading deeper into assets perceived as risky after a period of turbulence in equities.
April gold fell $2.70, or 0.2%, to $1,355.30 an ounce after a settlement at $1,358 Wednesday. The gold-backed exchange-traded fund SPDR Gold Shares was little changed while the VanEck Vectors Gold Miners ETF slipped 0.4%.
The slippage for gold came as a parade of data was released, with a focus on signs of rising inflation.
Oil Futures
U.S. oil prices reversed losses in early trading to settle at a one week high, boosted by a softer dollar and signals that OPEC is committed to cutting supplies even as U.S. production surges.
U.S. crude futures gained 74 cents, or 1.22%, to settle at $61.34 a barrel on the New York Mercantile Exchange.
Brent, the global benchmark, ticked down 3 cents, or 0.05%, to $64.33 a barrel on ICE Futures Europe, but pared sharply losses from earlier trading.
Both benchmarks are still below the three-year highs they hit in January amid ongoing market jitters over rising U.S. inventories and production.
Forex
The U.S. dollar fell to its lowest level in more than three years intraday as renewed confidence among investors drew money away from the U.S. currency.
The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.4% at 82.81, its lowest level since December 2014.
Major stock indexes are on track for their best weekly performance since the 2016 presidential election, a sharp reversal following two of the worst weeks since early
2016.
The rebound has weighed on the dollar, which served as a haven for nervous investors when stocks were falling.
European Markets
European shares closed higher, with the Stoxx Europe 600 up 0.5% at 376.51.
French stocks outperformed, with the CAC 40 ending up 1.1% after data earlier showed France’s unemployment rate fell to its lowest level since 2009 at the end of last year.
A 10.3% surge in shares of Airbus also help lift French stocks after the company delivered a record 718 commercial planes in 2017, helping it generate a better-than-expected EUR2.95 billion in underlying free cash flow.
For German and U.K. stocks, gains were more limited, however, as the euro and the pound gained ground against a weak dollar. The DAX closed up 0.1% and the FTSE 100 up 0.3%. Spain’s IBEX 35 and Italy’s FTSE MIB also both closed up 0.3%.
Asian Markets
Strong overnight stock gains in the U.S. and Europe continued in Asia, though volumes in much of the region were capped by the coming Lunar New Year holiday.
Chinese and South Korean markets are closed starting Thursday, joining Taiwan.
Hong Kong, Singapore and Malaysia had only a half-day of trading.  Singapore’s benchmark rebounded 1.2% in the shortened session and Hong Kong stocks jumped 2%, with the Hang Seng Index’s 5.4% rebound this week erasing half of last week’s decline, its biggest fall in a decade.
It was the Hang Seng’s best week since April 2015, and traders said volume remained high even without mainland Chinese flows through the Stock Connect system that ties markets there with Hong Kong’s. Some investors are likely closing short positions in the city’s equities ahead of the holiday.
Meanwhile, stocks in Japan rebounded despite fresh gains for the yen, which had sent the Nikkei Stock Average to four-month lows on Tuesday and Wednesday.
The index, after falling a combined 3.4% the prior three days, closed up 1.5%.
Financials were among the big gainers as U.S. Treasury yields hit fresh multiyear highs Wednesday. That included Dai-ichi Life, which jumped 5% to erase the week’s decline.

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