US stocks rally on better than expected economic data

Stock Markets

Australian shares are poised to edge higher today after a tech rally on Wall Street following better than expected economic data which calmed investor fears of the US economy slowing down. After the Fed’s more dovish than expected tilt triggered fears of the US economy slowing down, overnight economic data acted to bolster optimism about the economy. Initial claims for jobless benefits fell more than expected and mid-Atlantic factory activity rebounded sharply, which imply that the economy is healthy.

Wall Street’s major indexes ended the session well into positive territory on an overnight tech rally led by Apple. The Dow Jones, S&P 500, and NASDAQ 100 climbed 216.84 (+0.84%), 30.65 (+1.09%) and 109.99 (+1.42%) points respectively.

The benchmark S&P/ASX200 index closed marginally up 1.9 points on Thursday with a 30 point rally in the final trading hour barely managing to push the index into positive territory. The materials sector was the best performing sector, up 0.97%. Meanwhile, technology stocks led losses with the sector collectively down 0.6%.

On Thursday, the Australian Bureau of Statistics (ABS) reported that the unemployment rate edged down to 4.9% in February, from 5% in January. The national unemployment rate has fallen to its lowest level in almost eight years but there are signs the jobs market may be easing, with large increases in jobless rates in NSW and Victoria.

ASX 200 futures are currently up 42 points. 

Today’s data releases: Japan national CPI February, Nikkei PMI manufacturing March; Euro zone Markit manufacturing and services PMIs March; US Markit manufacturing and services PMIs March, Existing home sales February

Commodities and Currencies

Brent and WTI crude experienced a slight retrace overnight and are currently sitting at US$67.86 (-0.93%) and US$59.91 (-0.12%) respectively.

Iron ore prices are currently up 0.2% at US$84.49 per tonne.

The spot price of gold is currently up 0.26% at US$1309.09.

The AUD is currently marginally up 0.03% at US71.10¢. The AUD showed strength, shooting up 0.42% after the ABS reported a fall in the unemployment rate.

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