Local shares are poised to edge higher at the open as Wall Street advanced on positive economic data and some more solid corporate results.
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What you need2know:
• SPI futures up 16 pts at 5474
• AUD at 88.32 US cents, 96.52 Japanese yen, 70.01 Euro cents and 55.18 British pence
• In late trade, S&P 500 +0.4%, Dow +1.1%, Nasdaq +0.1%
• In Europe, Euro Stoxx 50 +0.5%, FTSE +0.2%, CAC +0.7%, DAX +0.4%
• Spot gold falls 1.1% to $US1199.34 an ounce
• Brent oil down 1.2% to $US85.91 per barrel
• Iron ore adds 0.9% to $US79.82 per metric tonne
What’s on today
ANZ will deliver its full-year results, Macquarie Group is due to report first-half results, Origin Energy to release its September quarter production results.
Ausdrill, Ebos and Echo Entertainment to hold their AGMs.
UBS has maintained its “buy” rating on BlueScope Steel but cuts its 12-month price target to $6.75 from $7.
Currencies
The US dollar surged to a three-week high and government bond yields rose, one day after the Federal Reserve took a more hawkish tone in its assessment of the economy as it announced the end of its six-year bond-buying program.
"The tone in the statement was relatively more hawkish than had been anticipated," said Mohannad Aama, managing director of Beam Capital Management LLC in New York. "The FX markets have concluded an interest rate hike is going to happen probably sooner rather than later."
The greenbackr rose 0.2 per cent against a basket of six major currencies and rose 0.2 per cent against the euro, to $US1.2618. The benchmark 10-year Treasury note yield rose 7/32 in price to yield 2.296 per cent.
Commodities
Falls recently in the crude oil price has seen it around a four-year low, which is not good news for Australia as it puts pressure on LNG prices. According to Wood Mackenzie, Asia Pacific LNG market will “likely to continue to loosen this winter, favouring buyers, however, this outlook would rapidly change in the event of a cold winter”.
Vale posted a surprise $US1.44 billion loss, and its shares tumbled to a 5-1/2-year low as investors worried about the cost of the Brazilian miner’s expansion plans and a possible cut to its dividend in a new era of lower iron ore prices.
US stocks rallied on Thursday, boosted by a strong reading on quarterly economic growth and on the back of upbeat earnings reports including Visa, which accounted for nearly 150 points in the Dow industrials.
Gains on the S&P 500 were led by the year's best performing sectors, healthcare and utilities. Analysts cited buying of winning stocks from mutual funds for the run in those sectors, as funds close their books for the year at the end of this month.
"End of year for mutual funds is most likely going to be selling losers and continue to buy winners," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
Gross domestic product grew at a 3.5 per cent annual rate in the third quarter, beating expectations. A separate report showed first-time applications for unemployment benefits rose marginally last week, but a measure of underlying trends hit its lowest level since May 2000 in a show of labour market strength.
Europe
European stocks ended higher on Thursday following a roller-coaster session, as positive corporate results and strong US growth figures helped offset the Federal Reserve's tougher tone on policy.
Earnings helped lift sentiment, with Renault gaining 2.9 per cent after the auto maker posted a rise in third-quarter revenue and upgraded its European auto market growth forecast for the full year.
So far in Europe's earnings season, 36 per cent of companies have reported results, of which 67 per cent managed to meet or beat profit forecasts, and 59 per cent met or beat revenue forecasts, according to Thomson Reuters StarMine data. In absolute terms, profits are up 7.1 per cent, while revenues are up 0.1 per cent, highlighting the fact that Europe's earnings rebound has mostly been coming from cost-cutting and lower financing costs.
What happened yesterday
The Australian sharemarket bounced on Thursday, defying a weak lead from Wall Street, as investors responded positively to a slew of corporate updates including from NAB, Wesfarmers and Coca-Cola Amatil. This more than offset a slump among miners.
The benchmark S&P/ASX 200 lifted 28.8 points, or 0.5 per cent, to 5476.2. The broader All Ordinaries gained 25.9 points, or 0.5 per cent, to 5457.1.