Local stocks are poised to open little changed after Wall Street traded sideways with no fresh reason from the Fed to push shares higher.
What you need2know:
- SPI futures up 1 point to 5579
- AUD at 93.27 US cents, 95.96 Japanese yen, 69.66 Euro cents and 55.17 British pence
- On Wall St, S&P 500 flat, Dow -0.2%, Nasdaq +0.5%
- In Europe, Euro Stoxx 50 -0.7%, FTSE -0.5%, CAC -1.2%, DAX -0.6%
- Spot gold fell 0.1% to $US1296.10 an ounce
- Brent oil down 1.6% to $US106.06 per barrel
- Iron ore rose 0.6% to $US95.90 per metric tonne
What’s on today
Australia: June private sector credit, quarterly import price index, June building approvals.
Europe: German and EU employment data, Euro zone consumer price data.
US: Initial jobless claims, Chicago PMI for July.
Stocks to watch
Rio Tinto has washed its hands of the disastrous $3.9 billion Riversdale Mining acquisition, by announcing a sale of its Mozambique coal assets for just $US50 million.
Woodside Petroleum’s proposed $US2.68 billion buyback of shares from Royal Dutch Shell is hanging by a knife edge as evidence grows that some large super funds are prepared to vote against the proposal.
JPMorgan is ‘underweight’ on National Australia Bank with a $35.51 price target.
Currencies
The greenback held gains against a basket of major currencies while US Treasuries yields surged after the latest Federal Reserve policy tweaks and data showing the US economy expanded at a faster-than-expected 4 per cent pace in the second quarter.
"We will be expecting more of a hawkish stance in September," said Aaron Kohli, an interest rate strategist at BNP Paribas in New York. "These kinds of (economic) numbers should encourage the Fed to be much more assertive."
Commodities
Oil prices tumbled on Wednesday, with Brent leading the decline weakened by excess supplies in Europe and Asia while US crude followed suit despite a larger-than-expected drop in nationwide stockpiles.
Gold futures ended lower on Wednesday, but traders largely shrugged off a statement from the Federal Reserve hinting the US central bank was in no rush to hike interest rates, which would reduce appetite for the precious metal.
Chilean miner Antofagasta posted a 5 per cent quarter-on-quarter increase in its second-quarter copper output, slightly ahead of forecast, as it ramped up production after maintenance dented its first-quarter output.
United States
The S&P 500 ended nearly flat on Wednesday after the Federal Reserve gave a rosier assessment of the US economy while reaffirming that it is in no hurry to raise interest rates.
Equities will see a decline at some point after rising for the past several years, former Federal Reserve chairman Alan Greenspan said in an interview on Bloomberg TV. "The stock market has recovered so sharply for so long, you have to assume somewhere along the line we will get a significant correction," Greenspan said
Gross domestic product expanded at a 4.0 per cent annual rate after shrinking at a revised 2.1 per cent pace in the first quarter, the Commerce Department said. The government previously had said the economy contracted at a 2.9 per cent rate at the start of the year.
Europe
European shares closed lower on Wednesday, as strong US growth failed to offset some weak earnings reports and concern the conflict between Russia and Ukraine will escalate.
Holcim's and HeidelbergCement's shares fell 4.8 per cent and 2.8 per cent respectively, leaving the STOXX Europe 600 constructions and materials index down 1.5 per cent.
Portugal's PSI 20 fell 3.3 per cent, underperforming all major European indexes, as retailer Jeronimo Martins and Banco Espirito Santo each fell more than 10 per cent.
What happened on Friday
The Australian sharemarket pushed to a new post-GFC high on Wednesday, with expectations for August company reporting season solid despite some shock writedowns over the past week.
The S&P/ASX 200 gained 34.5 points, or 0.62 per cent, to 5622.9.
