The last two sessions have brought mixed results for international markets.
Two nights ago the Dow Jones and other US markets enjoyed solid gains. This carried over into last night’s European session in which the FTSE (+1.3%), CAC (+1.5%) and DAX (+1.8%) all enjoyed healthy moves higher.
The momentum didn’t carry over to last night’s US session however, with stocks reversing a rally that sent the Dow toward its highest level since 2008, as banks tumbled and a report showed that sales of new homes unexpectedly slumped.
The blue-chip Dow gave up 22 points (-0.2%) to settle at 12735, whilst the S&P 500 (-0.6%) and Nasdaq (-0.5%) lost even more ground.
US durables orders rose by a larger than expected 3% in December. Durables orders excluding defence and aircraft orders – a close proxy for business spending – rose by 2.9% so the economic data in the US continues to be quite good.
US initial jobless claims rose by 21k to 377k last week but the underlying trend remains lower with the four week average of claims falling by 2,500 to 377,500.
Our dollar is still strong, buying US$1.062, whilst another commodity currency, the Canadian dollar, strengthened to parity against the greenback for the first time in three months.
Oil gained 30c to US$99.70 a barrel whilst base metals rallied as investors cheered news that the US Fed was ready to offer additional stimulus. Copper rose 2.5% to a four-month high while tin surged by 7%.
Gold moved to a seven-week high, gaining 1.2% to US$1,724 an ounce.
There is no major local economic data due out for today’s session.