Australian shares set to rise after Wall Street rallies
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The news: The Australian sharemarket is set to start higher after Wall Street’s major indices rallied, with the latest US data allaying fears of an imminent recession in the world's largest economy.
The numbers: The Dow Jones index ended 1.39% higher, while the broader S&P 500 rose 1.61% and the tech-heavy Nasdaq advanced 2.34%. In the local market, ASX 200 futures were up 77 points or 0.99% to 7,888 points at 7am AEST on Friday.
The context: US stocks rose, with nine of the 11 major S&P 500 sectors advancing, after July US retail sales data signalled resilient consumer spending. Retail sales increased 1% after a downwardly revised 0.2% drop in June, easing fears of a sharp economic slowdown fanned by a jump in the unemployment rate last week. Retail bellwether Walmart also jumped 6.5% after raising its annual profit forecast for the second time this year.
A separate reading showed the number of Americans filing new applications for unemployment benefits fell unexpectedly last week.
The yield on two-year and 10-year US Treasury notes rose after the data, with traders increasing bets for a 25-basis-point rate cut by the Federal Reserve to 76.5%. Investors have cautiously eyed this week's economic data releases, the last set before Fed Chair Jerome Powell delivers a much-awaited speech at Jackson Hole next week.
In the local market, traders will be focused on RBA governor Michele Bullock’s testimony in parliament as well as earnings reports from National Australia Bank, Amcor, ASX and Domain.
The source: Reuters
