Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.
Outlook for the day: ASX futures point to a strong open following gains on Wall Street. However, the outlook will likely depend on the market reaction to Q3 earnings from index heavyweight Nvidia following the close of regular US trade this morning.
ASX futures: up 53 points or 0.63%
Overnight themes:
US stocks rose ahead of the release of earnings from Artificial Intelligence heavyweight Nvidia in the next hour. The report is seen by many investors as a litmus test for the AI trade that has fuelled this year's bull market.
The S&P 500 overcame a mid-session dip to gain 0.38% and break a four-session losing run. The Nasdaq Composite bounced 0.59% as Nvidia rallied 2.85% before this morning's after-hours trading update. The Dow Jones Industrial Average traded both sides of break-even before closing 47 points or 0.1% ahead.
The overnight action was likely to be quickly eclipsed by the reaction today to Q3 earnings from Nvidia - the world's largest company by market capitalisation and the poster child for demand for Artificial Intelligence hardware. The company's shares had fallen 4.6% in two sessions leading up to last night despite its reputation for consistently beating expectations. "With NVDA, it has usually been a case of not if they beat earnings, but by how much as the company has exceeded both top and bottom-line expectations for 11 straight quarters," Adam Turnquist, chief technical strategist for LPL Financial, told Reuters.
The odds on a December rate cut fell to 30% from around 46% following the release this morning of the minutes from the latest US central bank policy meeting. The minutes showed divisions among policy-makers about the danger that lower rates would undermined the battle to contain inflation. Several members of the Federal Open Market Committee opposed the decision to cut at the meeting, expressing "concern that progress toward the Committee's 2% inflation objective had stalled... while also noting that longer-term inflation expectations could rise should inflation not return to 2% in a timely manner." Furthermore, "most participants noted that... further policy rate reductions could add to the risk of higher inflation becoming entrenched or could be misinterpreted as implying a lack of policymaker commitment to the 2% inflation objective," the minutes said.
Bitcoin - seen by some market observers as a proxy for risk appetite - slumped almost 5% before paring its fall. The cryptocoin was lately down 3.48% at US$89,548.
Tech was the night's best-performing sector, rebounding 0.93%. Materials and financials also advanced, by 0.46% and 0.42%, respectively. Rising bond yields weighed on sectors that compete with bond markets for inflows, such as real estate, consumer staples and utilities.
Oil declined following reports Washington was pressuring Ukraine to accept a US framework to end the war with Russia hat includes surrendering territory and weapons. An end to the long-running war would lead to the lifting of sanctions on Russian crude, increasing supply at a time when traders were already worried about a potential glut next year as OPEC restores output. "With the amount of oil on the water, in floating storage and what has been sanctioned, prices will probably end up in the low 50s as all of that oil that is sanctioned from Russia will probably come to market," Scott Shelton, energy specialist at TP ICAP Group, told Reuters. Brent crude settled US$1.38 or 2.13% lower at US$63.51 a barrel.
A rebound in gold lost heat as the odds on a December US rate cut shrank to 30% following the release of the minutes from the last Federal Reserve policy-setting meeting. The US dollar added to gains following the release of the minutes, raising prices of dollar-denominated commodities for buyers using other currencies. Spot gold was lately up US$6.93 or 0.17% to US$4,074.15 an ounce after earlier rising more than 1%. US gold futures settled US$16.30 or 0.4% ahead at US$4,082.80.
Iron ore edged to a new two-week high in China as most steel benchmarks firmed on the Shanghai Futures Exchange. Benchmark ore futures on the Dalian Commodity Exchange firmed 0.76% to US$111.32 a metric ton.
Tentative signs that global stock markets were stabilising following recent weakness helped bring buyers back to the copper market. Benchmark copper on the London Metal Exchange bounced 0.77% to US$10,802.50 a metric ton. "We're seeing some recovery in the stock market ahead of Nvidia earnings tonight, so I think there's some positive sentiment flowing into the metals market as well," Ole Hansen, head of commodity strategy at Saxo Bank, told Reuters. "In copper, we're seeing higher lows on the corrections, indicating that there are buyers sitting there waiting to get involved and they are not prepared to wait for a bigger drop." Aluminium and tin also rose. Nickel, zinc and lead posted modest losses.
Key events today:
S&P 500: up 25 points or 0.38%
Dow: up 47 points or 0.1%
Nasdaq: up 131 points or 0.59%
VIX: down 4.74% to 23.52
US 10-year treasury yield: up 2.1 points to 4.134%
Dollar: down 0.69% to 64.6 US cents
Iron ore (Dalian): up 0.76% to US$111.32
Brent crude: down US$1.38 or 2.13% to US$63.51
Gold (futures): up US$16.30 or 0.4% to US$4,082.80
Gold (spot): up US$6.93 or 0.17% to US$4,074.15
NYSE Arca Gold Bugs: up 1.14%
Silver (spot): up 31 US cents or 0.61% to US$51.01
Palladium (spot): down US$7 or 0.5% to US$1,396.50
Antimony (China ore): up 1.47% to US$16,450
Bitcoin: down 3.48% to US$89,548
Copper (LME): up 0.77% to US$10,802.50
Nickel (LME): down 0.03% to US$14,640
Lithium carbonate (China spot battery grade): up 1.65% to US$11,037
Global X Lithium & Battery Tech ETF: up 1.07%
Uranium (spot): down 0.49% to US$76
Global X Uranium ETF (URA): up 3.2%
BHP: down 0.46% (US); down 0.63% (UK)
Rio Tinto: down 0.44% (US); up 0.36% (UK)
