Oil and iron ore rebounded overnight. Photo: Jessica HromasLocal shares are poised to open little changed. The $A got a boost from a rebound in both oil and iron ore.
What you need2know
SPI futures up 8 pts at 5079
AUD at US72.24¢
On Wall St, late, S&P +0.8%, Dow +0.9%, Nasdaq +0.5%
In Europe, Stoxx 50 flat, FTSE +0.8%, CAC flat, DAX flat
Spot gold down $US5.25 or 0.5% to $US1073.15/oz at 2.31pm New York
Brent crude down 25 US cents or 0.7% at $US36.10/bbl at 2.26pm New York
US oil up US34¢ or 1% to $US36.15
Iron ore up 0.8% to $US40.80 a dry ton
What’s on today
NAB December-quarter Consumer Behaviour Survey; NZ merchandise exports/imports; NZ housing credit; France revised Q3 GDP; UK Q3 GDP; US November personal income, new home sales, durable goods, household spending, consumer confidence.
Stocks in focus
BHP Billiton and Vale are increasingly likely to have to inject capital in their iron joint venture as Brazil steps up efforts to guarantee payment of $US5 billion in damages for a dam collapse, according to BTG Pactual.
Deutsche Bank has a ‘sell’ rating on DuluxGroup (DLX) and a $4.20 target price.
RBC Capital Markets has a ‘perform’ rating on Western Areas (WSA) and a $2.20 target price.
“The Australian dollar is rising as a follow-through from rising prospects of Chinese policy easing,” said Elias Haddad, a currency strategist at Commonwealth Bank of Australia in Sydney.
A gauge of the dollar is set to drop in December by the most in eight months as investors bet the Federal Reserve will wait until at least April to raise interest rates again after last week’s first increase in almost a decade.
Turkey’s lira dropped 1 per cent after the central bank held rates steady. Policy makers were predicted to raise the one-week repurchase rate and and the overnight borrowing rate.
Oil prices edged up off 11-year lows on Tuesday, though a bearish outlook for 2016 and weaker profits for refining oil products kept a lid on gains.
Traders squared positions ahead of a traditional period of low liquidity between Christmas and New Year’s Day as they covered short positions, bolstering US crude. “It’s somewhat of a defensive posture and a reasonable posture before the beginning of the year,” said John Saucer, vice president at Mobius Risk Group in Houston.
In a new report, Goldman Sachs said it expects “the oversupply as continuing well into next year before rebalancing in the fourth quarter 2016. Our base case remains that the global oil stock build will on aggregate remain shy of storage capacity, although the storage buffer has once again narrowed.”
US stocks advanced as data showed consumer spending buoyed the American economy in the third quarter amid signs of slowing growth overseas.
The Standard & Poor’s 500 Index rose for a second day after gross domestic product climbed at a revised 2 per cent annualised rate last quarter. Trading in S&P 500 shares was 19 per cent below the 30-day average at this time of day.
“We’ve got some good numbers in front of us, but we need to see if money comes back into the market,” said Larry Rosenthal, who oversees $600 million as president of Rosenthal Wealth Management Group. “We’re in a rate rising cycle and all eyes are going to be on earnings and on true economic data.”
European stocks ended little changed on Tuesday after a volatile day but energy plays rose as oil prices recovered, while Spanish equities rebounded following a sell-off in the previous session prompted by concerns over a political stalemate.
“There are no easy gains to make,” said Marco Vailati, head of research and investment at Italy’s Cassa Lombarda.
“Companies must deliver on the earnings front, the Greek crisis is still unresolved and there is political instability in Spain. Against this uncertain backdrop, investors should be opportunistic and seek to buy on the dips and sell during the moments of euphoria,” he said.
What happened yesterday
Australian shares lost strong early gains recorded in morning trade on Tuesday, but just managed to finish in the black amid thin trading volumes and another strong performance from energy stocks. The ASX200 closed 0.1 per cent higher for the day at 5116.7 while the All Ordinaries was up 0.1 per cent to 5167.7.
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