Australian shares are set to open little changed. Shares closed modestly higher in New York. Oil gained after Israel launched an attack against Hamas political leaders in Doha, Qatar.
The Dow Jones index rose by 196 points or 0.4 per cent, the S&P 500 index gained 0.3 per cent and the Nasdaq index added 81 points or 0.4 per cent. All three major indexes closed at record highs. So far this year, the S&P 500 has risen near 11 per cent, while the Nasdaq is up 13 per cent.
Bets that the Federal Reserve will cut rates at a policy meeting next week were further bolstered by a report showing that the US economy added 911,000 fewer jobs in the 12 months through March than initially estimated. Investors now await late Wednesday’s monthly consumer price report.
“There are two variables that will determine how quickly the Fed cuts in the next six months,” said Bill Adams, chief economist at Comerica Bank. “The first is labour supply. More aggressive immigration enforcement is slowing growth of the workforce, meaning fewer new jobs are needed to hold the unemployment rate stable. If the unemployment rate holds steady despite weak payroll growth, the Fed will be more cautious toward rate cuts.
“The second variable is fiscal stimulus,” Adams said. “The July 4th fiscal bill includes a big wallop of front-loaded spending on border security and defence, and a variety of tax cuts that will start boosting after-tax incomes of consumers and businesses in the next 12 months. There are big cuts to the social safety net in the bill, too, but those are mostly delayed for a few years. With a fiscal boost just around the corner, the Fed will be less inclined to make big rate cuts than if fiscal policy were neutral or tightening.”
Apple was 1.5 per cent lower after the release of its latest iPhone, AirPods and Watches. Oracle surged more than 25 per cent in after-hours trading after it posted a huge jump in bookings in the latest quarter, following a massive deal with OpenAI.
With Reuters, Bloomberg
Market highlights
ASX 200 futures were down 4 points or 0.1% to 8803.
All US prices at 5pm New York time.
AUD -0.1% to US65.85¢Bitcoin -0.2% to $US111,720On Wall St: Dow +0.4% S&P +0.3% Nasdaq +0.4%VIX -0.07 to 15.04Gold -0.3% to $US3626.63 an ounceBrent oil +0.8% to $US66.53 a barrelIron ore +2% to $US107.50 a tonne10-year yield: US 4.09% Australia 4.26%Today’s agenda
The focus is on consumer prices with China releasing its latest data. NAB said China’s CPI is expected to slip back into deflation in August, from 0.0 per cent year-over-year in July, weighed by food prices.
August US CPI will be released late on Wednesday.
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