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Morning Market Update: Positive Start

It was another night of milestones for US markets on Friday night, with the S&P500 and Dow each claiming new record highs on hopes for a continuation of Fed stimulus.

Benchmark US indices logged their sixth consecutive weekly gain, the longest such winning streak since February. The advance came despite a raft of economic data that underwhelmed expectations.

A measure of New York area manufacturing activity surprisingly contracted this month, coinciding with data showing a contraction in American industrial production during October.

Investors looked past the weak data, which has only boosted speculation the Fed will delay when it begins reducing stimulus, perhaps not until after policy dove Janet Yellen, is sworn in as the next head of the Federal Reserve.

The Dow rose 86 points (+0.5%) to 15962, the S&P500 added seven points (+0.4%) to 1798 and the Nasdaq put on 13 points (+0.3%) to 3986.

The prospects of Janet Yellen extending the Fed’s monthly bond buying program saw gold edge higher, and notch its first weekly gain in two. Bullion added 0.1% to US$1287 an ounce.

The move in gold prices coincided with a drop in the US dollar against other currencies. Sentiment towards the greenback has taken a negative turn following Yellen’s testimony in which she argued in favour of stimulus.

Gold’s strength stood in contrast to oil, which suffered its six consecutive weekly loss – the longest stretch of declines in about 15 years. Crude futures climbed a modest 0.5% on Friday night, to US$94.19 a barrel.

Crude has been battered by data showing ongoing increases in US oil inventories, without a corresponding increase in demand.

There is no major economic data due for release today.

 

Morning Market Update: Positive Start is a post from: Australian Stock Report Market Pulse Blog