Local shares are poised to open higher as Wall Street found its footing, paced by a rebound in big tech stocks including Apple and Microsoft.
What you need2know
SPI futures up 35pts to 5085
AUD at 70.30 US cents, 84.70 Japanese yen, 62.74 Euro cents and 46.02 British pence
On Wall St, S&P 500 +1.8%, Dow +1.8%, Nasdaq +2.5%
In Europe, Stoxx 50 +0.3%, FTSE +0.4%, CAC +0.3%, DAX +0.3%
China's markets will be closed Thursday and Friday
Spot gold slid $US6.21 or 0.5% to $US1134.06 an ounce
Iron ore adds 0.2% to $US56.70 per tonne
Brent crude rose $US1.14 or 2.3% to $US50.70 a barrel
What's on today
Australia international trade, retail trade; China military parade to mark 70th anniversary of victory over Japan in WWII; ECB interest-rate decision in Frankfurt, president Mario Draghi holds a press conference; Sweden rates decision; US ISM services, jobs data.
Stocks in focus
Citi has made no change to its major banks stocks order of preference "given that we expect continued retail revenue headwinds from moderating investor lending volumes, whilst competition is redirected towards the owner occupied segment". Meanwhile organic capital generation continues to remain weak amidst an environment of higher capital requirements across the major banks, says Citi. "We maintain our major bank order of preference – ANZ (Buy), NAB (Neutral), CBA (Neutral), WBC (Neutral)."
UBS is "neutral" on Myer Holdings and has a price target of $1.20 on the retailer, compared with $1.30 previously. "MYR has a strong brand, but continues to lose share and will now look to realign the business to a different customer base. We think this is high risk, but the strategy by management and level of CAPEX allocated does seem sensible."
Trading ex dividend today: Adelaide Brighton, Austock, Evolution Mining, Fortescue Metals Group, Integrated Research, Medibank Private, Prime Media Group, Regis Healthcare, IPH, Silver Chef, Tox Free Solutions.
Currencies
Bill Gross said the Federal Reserve has waited so long to raise interest rates that any move now may be labelled "too little too late" as market turmoil restricts the room for policy makers to act.
"The 'too late' refers to the fact that they may have missed their window of opportunity in early 2015, and the 'too little' speaks to my concept of a new neutral policy rate which should be closer to 2 per cent nominal, but now cannot be approached without spooking markets," Gross wrote in an investment outlook Wednesday for Denver-based Janus Capital Group.
Commodities
Ore with 62 per cent content traded at $US56.59 a dry ton on Tuesday, according to data compiled by Metal Bulletin Ltd.
Metallurgical coal prices edged lower for the fourth straight week, with premium low-vol, mid-vol, PCI, and semi-soft prices down 1.2 per cent, 1.7 per cent, 0.4 per cent, and 0.8 per cent, respectively, reports RBC Capital Markets. Most end-users were reluctant to purchase seaborne material due to concerns about the Chinese economy and a decline in Chinese domestic met coal prices.
China is driving commodity prices as never before, and it is driving them lower, says Citi. "Commodity prices have been buffeted by volatile swings in Chinese equity and FX markets, and by concerns regarding underlying growth and policy response. From June 12 to August 26, the Bloomberg Commodity Index fell 15 per cent, which included a 17 per cent decline in copper and 36 per cent in Brent. We expect China to continue to exert downward pressure on commodity prices in the coming months, representing one of the three key drivers for commodity prices, along with US rate hike timing and the degree of supply-side response to low prices."
United States
US stocks rallied, after the Standard & Poor's 500 Index posted one of its steepest drops this year, amid a respite from a global equities selloff. A surge in the final minutes pushed the S&P 500 to its session high after the gauge fell 3.8 per cent over the previous two sessions.
A report from the Fed Wednesday said the economy expanded across most regions and industries in July and August as tighter labour markets boosted wages for some workers. Six of 12 Fed districts reported "moderate" growth, and five others said expansion was "modest," according to the Beige Book.
Data today on private payrolls showed companies added 190,000 workers in August, below the 200,000 forecast by economists surveyed by Bloomberg. Attention will focus on the government's monthly jobs report, due Friday, as a major data point before the Fed's meeting. A separate gauge Wednesday showed July factory orders rose less than forecast by economists.
Europe
European traders got some respite from the rout that has erased most of this year's equity gains. The Stoxx Europe 600 Index added 0.3 per cent to 353.86 at the close of trading. While the equity gauge fluctuated between gains of 1.2 per cent and losses of 0.6 per cent, a measure tracking expectations for future swings dropped after a three- day increase.
The Stoxx 600 extended its plunge from August on Tuesday amid growing concern that China's economy is faltering, just as the Federal Reserve gets ready to increase interest rates. The equity measure is now 15 per cent below the record it reached in April, sending its valuation to 15.2 times estimated profit, lower than US shares. It's pared its gains for the year to 3.3 per cent from as much as 21 per cent.
Getinge AB led health-care stocks higher after saying it plans a program to improve cost efficiency. GlaxoSmithKline Plc rose 1.9 per cent, contributing the most to the Stoxx 600's gain. UniCredit SpA and Intesa Sanpaolo SpA led banks ahead. Unibail-Rodamco SE pushed a measure of real estate companies to the best performance of the 19 industry groups on the equity benchmark.
What happened yesterday
Australian shares recovered from sharp falls to finish in positive territory on the back of a dramatic improvement in China's sharemarket and a strong lead from US futures. The benchmark S&P/ASX200 finished 0.1 per cent higher at 5105.5 while the broader All Ordinaries index was 0.05 per cent higher at 5119.4.
