ASX to open flat despite Wall Street optimism
Summary
- Wall Street posted gains overnight on fresh optimism for further stimulus
- At 7:00am SPI futures pointed to a gain of one point
- Adore Beauty joins ASX boards today, while Qantas and IAG hold AGMs
Latest updates
ASX set to edge higher as Wall Street rises on stimulus optimism
By Gertrude Chavez-Dreyfuss
Shares on Wall Street gained on Thursday (US time) in choppy trading, as investors cheered the prospect of more fiscal stimulus to support a pandemic-damaged US economy, with more data pointing to a slowing labour market recovery.
Trading on Wall Street this week has been dictated by a flurry of reports related to progress in the stimulus talks. The CBOE Market Volatility index rose for the eighth time in nine sessions, and was last up 2.8 per cent.
The progress of stimulus talks continues to shape the market.
In mid-afternoon trade, the Dow Jones Industrial Average is up 0.6 per cent, the S&P 500 has gained 0.5 per cent and the Nasdaq Composite has added 0.2 per cent. At 5.19am AEDT, futures are pointing to a gain of 7 points, or 0.1 per cent, at the open for the Australian sharemarket.
US House Speaker Nancy Pelosi reported progress in talks with the Trump administration for another round of financial aid and said legislation could be hammered out “pretty soon”.
“The market remains highly sensitive to a fiscal stimulus deal,” said Rob Haworth, senior investment strategist at US Bank Wealth Management.
“What we’re concerned about is the labour market as we move to the next couple of months. We get the roll-off of the stimulus and the labour market remains suspect. That’s why we’re looking for fiscal stimulus and the market is looking for fiscal stimulus,” he added.
Pelosi and Treasury Secretary Steven Mnuchin have been negotiating a relief bill near the $US2 trillion ($2.8 trillion) mark, a sum opposed by Senate Republicans who have expressed concern about the federal deficit.
Also on Thursday, data showed the number of Americans filing for state unemployment benefits last week dropped more than expected to 787,000, but remained stubbornly high as support from fiscal stimulus faded.
Reuters
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