December 27, 2018 08:12:29
Wall Street has rebounded from its worst Christmas Eve sell-off ever — with the Dow Jones surging almost 1,100 points.
Markets at 8:05am (AEDT):
- ASX SPI futures +0.7pc at 5,413, ASX 200 (Monday’s close) +0.5pc at 5,494
- AUD: 70.7 US cents, 55.93 British pence, 62.27 Euro cents, 78.72 Japanese yen, $NZ1.05
- US: Dow Jones +5pc at 22,878, S&P 500 +5pc at 2,468, Nasdaq +5.8pc at 6,554
- Europe: (closed for public holiday)
- Commodities: Brent crude +8.8pc at $US54.92/barrel, spot gold -0.2pc at $US1,266.48/ounce
While no longer in bear market territory, it is still the worst December for US markets since the height of the Great Depression in 1931.
The local share market is expected to follow that strong lead, and start the day higher. ASX futures indicate a 0.7 per cent gain in early trade.
Meanwhile, the Australian dollar has lifted to 70.6 US cents, 55.8 British pence and 62.1 Euro cents.
Qualifying the President’s remarks
The Trump administration’s attempts to restore confidence in the market may have helped US markets somewhat.
White House economic adviser Kevin Hassett told reporters that US Federal Reserve chairman Jerome Powell’s job was “100 per cent” safe, and that President Donald Trump was happy with Treasury Secretary Steven Mnuchin.
His reassurance comes two days after Mr Trump tweeted that the Fed, by maintaining its interest-rate-hiking cycle, is the US economy’s “only problem”.
The Dow Jones index surged 1,086 points, or 5 per cent, to 22,878 at 4:00pm (New York time).
The benchmark S&P 500 had risen sharply, up 5 per cent to 2,468.
Meanwhile, the tech-heavy Nasdaq index jumped 5.8 per cent to 6,554.
“It seems like a bear-market rally,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
“Usually they don’t last very long, but this could continue till the month ends.
“We are in a bear market and when that happens the whole market gets cheap.
“Investors will likely go for low [valuation] names because they could get into the market that way without getting into trouble.”
Retail stocks, particularly Amazon, provided the biggest boost to the market.
Its share price soared 9.5 per cent after reporting that it achieved a “record-breaking” number of sales this holiday season.
Energy stocks also lifted the market, after the price of Brent crude oil bounced back 8.4 per cent $US54.69 per barrel.
More to come.
December 27, 2018 07:52:59