8@eight: ASX set to tread water ahead of Christmas break

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The Australian share market is expected to open flat on the back of a soft lead from Wall Street.

The SPI200 futures contract was up 1 point, at 6,716.0 at 7.40am AEDT. The ASX will finish at 2.10pm AEDT on Tuesday, being closed on Christmas Day and Boxing Day, and reopen on Friday.

Wall Street inched higher on a muted day of trading.
Wall Street inched higher on a muted day of trading.Credit:AP

The Aussie dollar is buying 69.24 US cents, rising from 69.07 US cents on Monday.

1. Smiles on faces as end of year approaches: Rising optimism around a “Phase 1” trade deal announced earlier this month between the United States and China has helped put investors in a buying mood. Fears about a possible recession have also faded since the summer after the Federal Reserve cut interest rates three times, and the central bank appears set to keep them low for a long time.


2. A year to remember: For all the angst about trade wars, geopolitics and a sputtering and overly indebted global economy, 2019 might just be the best year investors have ever had.

The numbers are staggering. Global stocks have piled on more than $10 trillion, bonds have been on fire, oil has surged almost 25 per cent, former crisis spots Greece and Ukraine have top-performed, and even gold has sparkled.

Wall Street and MSCI’s near 50-country world index have both stormed to record highs after 30 per cent and 24 per cent leaps. Europe, Japan, China and Brazil are all up at least 20 per cent in dollar terms too. Not exactly shoddy.

3. Wall Street: Stocks notched modest gains in afternoon trading on Wall Street Monday, placing the market on track to extend the major indexes’ record-setting run. Trading was mostly muted as investors looked ahead to a shortened holiday week.

4. ASX sputtering: A flat start looks in store for the Australian sharemarket as it tries to end a losing run. On Monday, the ASX made it three straight days of finishing in the red, closing 31 points, or 0.5 per cent lower.

It was a muted day in trading, with the big miners leading the way on losses as the price of iron ore slid lower.

5. Boeing wields the axe: Embattled CEO Dennis Muilenburg stood down from the planemaker, following year if scrutiny and intense pressure in the wake of the twin plane tragedies. United States

Shares in Boeing  jumped around 3.2 per cent on the news before easing.

6. Gold glitters: Gold prices gained on sparse trade ahead of the holiday season, with lingering concerns about the health of major global economies supporting demand for safe-haven bullion.

“There are potential economic risks still in the majority of economies. That’s not going to go away in a hurry,” said INTL FCStone analyst Rhona O’Connell.

7. Europe: European shares dipped slightly on Monday after nearing a record high in the previous session, as investors locked in some of the recent gains in thin trading ahead of the Christmas and Boxing Day holidays later in the week.

The pan-European STOXX 600 index shed 0.1 per cent, with the banking sector among the biggest decliners. The FTSE finished in the black, closing 0.54 per cent higher.

8. Market watch: 

ASX futures were up 1 point to 6716 at 7.30 am AEDT.

  • AUD +0.3 per cent to 69.19 US cents
  • At 2:30pm on Wall St: Dow +0.4 per cent S&P 500 +0.2 per cent Nasdaq +0.3 per cent
  • In New York: BHP flat Rio +0.5 per cent Atlassian +0.8 per cent
  • In Europe: Stoxx 50 flat FTSE +0.5 per cent CAC +0.1 per cent DAX -0.1 per cent
  • Spot gold +0.4 per cent to $US1,484/oz at 12:50pm New York
  • Brent crude +0.4 per cent to $US66.37 a barrel
  • US oil +0.2 per cent to $US60.56 a barrel
  • Iron ore -2.2 per cent to $US90.50 a tonne
  • Dalian iron ore -0.3 per cent to 639 yuan
  • LME aluminium -0.03 per cent to $US1,774 a tonne
  • LME copper -0.7 per cent to $US6,147 a tonne
  • 2-year yield: US 1.65 per cent Australia 0.88 per cent
  • 5-year yield: US 1.75 per cent Australia 0.93 per cent
  • 10-year yield: US 1.92 per cent Australia 1.29 per cent Germany -0.25 per cent
  • 10-year US/Australia yield gap: 63 basis points

Bloomberg, Reuters

This column was produced in commercial partnership between The Sydney Morning Herald, The Age and IG

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Information is of a general nature only.

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