Global investor confidence returns on the back of renewed US/China trade optimism

Stock Markets

Australian shares are set to open higher today as shares on Wall Street closed higher. The Dow Jones and S&P500 both closed well in the green, with the indices gaining 336.25 (+1.38%) and 42.13 (+1.60%) points respectively. All eleven major sectors comprising the S&P500 closed in positive territory on Friday. With the energy (+1.93%), industrials (+1.86%), and financials (+1.71%) sectors seeing the largest percentage gains. This staggering rise in US equities is attributed to renewed hopes that the US and China are progressing to resolve their trade dispute. Australia’s big miners, energy companies and technology stocks have greatly benefited from the easing US/China trade tensions and are expected to continue to perform well in the coming week. China will be the main focus of today as it releases its fourth quarter economic growth and activity data. ASX200 futures are currently up 45 points.  

Hard Currencies

The spot price of gold fell about $10 on Friday and is now hovering around US$1281.15. This was the first significant fall since 4 January 2019.  From a technical perspective, it still remains in its medium-term uptrend despite the recent pullback. A breakout above US$1300.40 would signal the continuation of the uptrend in the spot price of gold.

Commodities

Brent crude prices have benefited from hopes that OPEC will manage to achieve production cuts and easing trade tensions between the US and China. Its’ rally has continued with prices hitting a new recent high of US$63 per barrel before pulling back to US$62.62 per barrel (+2.25%).

Fiat Currencies

The AUD (against the USD) is currently flat at 71.67¢ (-0.01%). Any further news regarding the US lifting tariffs on Chinese imports will likely result in the AUD going up.

This article was written by Mithun Fernando – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via mithun.fernando@rivkin.com.au or by phoning +612 8302 3633.