Australian shares to open higher as tech giants lift Wall St
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The news: The Australian sharemarket is set to open higher after Wall Street closed higher overnight, as gains in megacap technology stocks offset weakness in chipmakers. Softer-than-anticipated inflation data also lifted equities, prompting investors to further scale back expectations of a Federal Reserve interest rate hike.
The numbers: Updated at 7:55am AEST:
- ASX futures: up 15 points to 8,821 points
- Wall Street: Dow Jones up 0.29%, S&P 500 up 0.38%, Nasdaq up 0.62%
- Europe: FTSE 100 down 0.13%, CAC 40 up 0.19%, DAX down 0.59%
- Spot gold: up 0.15% to USD4,060 per ounce
- Oil prices: Brent up 0.58% to USD85.22/barrel, US WTI up 0.99% to USD80.12/bbl
- AUD: up 0.41% at 70.00 US cents
- Bitcoin: down 0.28% to USD64,760.
The context: All three major US indices closed higher on Wednesday with gains in Apple, Alphabet and Amazon, each up more than 3%, offsetting weakness in chipmakers. The Philadelphia Semiconductor Index fell 2.1%, weighed down by declines in Micron, Marvell Technology, Intel and Advanced Micro Devices.
On the data front, the US producer price index fell 0.3% in June, marking its largest monthly decline in 14 months as energy costs eased, according to the US Bureau of Labor Statistics. Economists polled by Reuters had expected producer prices to be unchanged following a revised 0.6% increase in May. The data, alongside Tuesday’s softer consumer inflation report, suggested price pressures were easing before the recent escalation in the Middle East conflict.
The limited inflationary impact of the Iran conflict reinforced expectations the Federal Reserve has scope to delay further policy tightening. Money markets continue to fully price in one rate hike this year, although not before December, Bloomberg reported.
Elsewhere, the US launched another round of airstrikes on Iran overnight after President Donald Trump vowed to intensify military action until Tehran stops attacking ships in the Strait of Hormuz and agrees to reopen the waterway. The strikes marked the fifth consecutive day of US attacks.
Locally, the Melbourne Institute will release July consumer inflation expectations at 11:00am AEST.
