Wall Street erased yesterday’s gains to finish in the red. However, Australia’s futures are tracking higher and are indicating a positive start to the trading session today.
Concerns over the possible government shutdown in the US has given investors a lack of confidence in the markets. The greenback has also fallen on the back of this news. Congress is expected to pass a spending bill by the end of the week to avoid the shutdown.
Despite this short-term pullback from investors, the stock market is so far off to a strong start this year, with the the Dow, S&P 500 and Nasdaq composite all up at least 4.8 per cent for the year so far. Companies continue to report better-than-expected earnings.
On the commodities front, gold has dropped, while oil and iron ore are sitting flat.
Cryptocurrencies are back on the rise.
US economic news
The Federal Reserve reported that inflation is growing at a steady rate, with the target range increased be a quarter of a point by the end of 2017. The labour market continues to strengthen and wages continue to push higher.
The number of Americans filing for unemployment benefits decreased to the lowest number in 45 years, dropping by 41,000 to 220,000 in the second week of 2018, well below market expectations of 250,000.
Homebuilding in the US dropped more than expected, falling 0.1 per cent in December, the biggest drop in over a year, which could be due to colder than usual weather conditions experienced in the US.
Local economic news
The ABS will release tourist arrivals and departures for November. October saw a trend of 755,000 movements of short-term visitor arrivals, a 0.2 per cent increase compared to the previous month.
Lending finance figures for November will also be out. Housing finance dropped 0.1 per cent in October.
Wall Street closed lower yesterday: The Dow Jones Industrial Average lost 0.4 per cent to close at 26,018, the S&P 500 dropped 0.2 per cent to close at 2,798 and the NASDAQ finished 0.03 per cent lower to close at 7,296.
European markets closed mixed: London’s FTSE dropped 0.3 per cent, Paris gained 0.02 per cent and Frankfurt gained 0.7 per cent.
Asian markets closed mixed: Tokyo’s Nikkei dropped 0.4 per cent, Hong Kong’s Hang Seng gained 0.4 per cent, and China’s Shanghai Composite gained 0.9 per cent.
The Australian share market closed lower yesterday: The S&P/ASX 200 Index closed 1 point down to finish at 6,015.
On the futures market the SPI is 20 points higher.
Energy company Genesis (ASX:GNE) reports that customer sales decreased 1.2 per cent due to warmer weather reducing gas and electricity use. Gas sales declined 11.4 per cent overall, with C&I gas sales down 18 per cent. LPG customers growth continued, up 27 per cent for the quarter compared to the same time last year. Renewable generation declined 8 per cent and an extended unplanned outage occurred in the quarter. Shares in Genesis (ASX:GNE) closed 0.45 per cent higher at $2.23 yesterday.
One Australian Dollar at 8:30AM was buying 79.95 US cents, 57.56 Pence Sterling, 88.80 Yen and 65.36 Euro cents.
Gold is lower by $11.90 to $US1,327 an ounce.
Silver has dropped $0.21 to $US16.95 an ounce.
Oil is $0.17 lower to $US63.75 a barrel.
The three most traded cryptocurrencies are trading higher.
Bitcoin has gained 7.7 per cent to $11,943.
Ethereum gained 9 per cent to $1,083.
Ripple gained about 36.9 per cent to $1.67.