The three key Wall Street indices went their separate ways on Friday.
The tech-centric Nasdaq (+0.4%) hit a new record, the blue-chip Dow went backwards (-0.6%) and the S&P 500 went nowhere, ahead of this week’s rates decision from the Fed.
The Nasdaq was lifted by Microsoft’s 1.8% gain on news it had dodged a massive EU antitrust fine by offering to cut prices on Office products in Europe.
ASX futures trading closed on Friday night pointing to 0.7% decline on opening, which if it eventuates would wipe out Friday’s 0.7% gain.
Over the week the S&P gained 1.6%, as did the broader European market.
Closer to home, China picked 1.4% while Japan was the standout in the region, up more than 4% over the five sessions.
The ASX was marginally lower (-0.1%), its second straight losing week.
Wednesday’s announcement (Thursday 4am AEST) from the US Federal Reserve’s Open Market Committee is dominating market sentiment at the moment.
A softening jobs market seems to have sealed the deal on a cut — the question is, by how much?
Reuters reported the Fed fund futures is indicating the markets are expecting a 90% chance that the Fed lowers rates by 25 basis points.
The balance of expectations left about a 10% chance for a larger-than-standard 50 bp cut.
The prospects of a cut, and two more this year, saw the US dollar rise against most major trading partners.
The Australian dollar slipped slightly but is still trading around 66.50 US cents.
The oil price surged after a Ukrainian drone attack hit Russia’s largest oil terminal, with the global benchmark Brent Crude ending the session 0.9% higher at $US66.99/barrel.
However, the gains eased mid-session when traders remembered that cracks are appearing in the US economy and that demand may weaken.
Again Capital partner John Kilduff says US economic data is currently not supportive of an oil rally.
“The overall weight is down and the trend is bearish,” Mr Kilduff said.
On other commodity markets, Friday capped a strong week for most metals, although copper slipped a tad but gained more than 2% over the week.
Iron ore gained 0.5% on Friday to be 1% over the week, while the gold’s rush continued (+0.2%) above $US3,600/ounce.
Thermal coal was out of favour again, dropping 0.2% on Friday to be down more than 6% over the week.