New record highs in the US, gold touches US$2000 per ounce, ASX futures up 23 points

By Trevor Hoey. Published at Sep 2, 2020, in Market Wrap

The S&P/ASX 200 chalked up its third successive day of losses on Tuesday, closing down 108 points or 1.8% at 5953 points.

On August 19, the index made a five month high of 6168 points, but after yesterday’s fall it is trading 3.5% shy of that mark.

Given the XJO is trading well off its February high of about 7200 points, it is difficult to understand how the US equities indices such as the S&P 500 and the NASDAQ continue to make record highs.

On that note, there were once again positive leads out of the US, and this is expected to provide support for our market with the ASX SPI200 futures index up 23 points at 5950 points.

While negative GDP data is expected to be released today, one would expect that given this has been well flagged, it has essentially been factored into the XJO.

24 hours

There weren’t any significant movements in major Asian markets yesterday as the Nikkei stabilised at 23,138 points after its surge on Monday following the announcement of Warren Buffett’s investment in some of the country’s leading stocks.

The Hang Seng was relatively flat, closing at 25,184 points, while the Shanghai Composite gained 0.4% to close at 3410 points.

European markets were mixed, but the FTSE 100 appeared to take its lead from Australia as it slumped more than 100 points or 1.7% to close at 5862 points.

It was a different story across the channel as the DAX gained 29 points to close at 12,974 points and the CAC 40 came off 0.2%, closing at 4938 points.

In the US it was once again all about the NASDAQ as it surged 1.4% or 164 points to close at 11,939 points.

Only having pushed above 10,000 points in June, it is incredible that the NASDAQ now has the 12,000 point mark clearly in its sights.

The S&P 500 surged in the last half hour of trading to close at 3526 points, notching up another record.

The Dow also finished strongly to close at 28,645 points, a gain of 0.8%.

One of the big developments in the US was an announcement by Walmart that it was preparing to roll out Walmart Plus in a bid to compete with the Amazon Prime business.

Apple Inc continued its strong run, gaining 4%.

On the commodities front, gold continued its upward trend, briefly touching US$2000 per ounce before closing around the US$1980 per ounce mark.

The Brent Crude Oil Continuous Contract pushed up above US$46 per barrel before retracing to US$45.60 per barrel.

Iron ore was relatively flat, hovering just below US$125 per tonne.

Copper reaffirmed its position above US$3.00 per pound, gaining nearly 1% to US$3.06 per pound.

Nickel finally claimed US$7.00 per pound, closing at US$7.06 per pound, a level it hasn’t traded at since November 2019.

Looking at long-term prices, this is a significant milestone as there has only been one brief period of about three months in the last five years when nickel has consistently traded above US$7.00 per pound, and on that occasion it went on to hit US$8.00 per pound.

Lead rose slightly to close in on the US$0.90 per pound mark for the second time in the last month, while zinc was only up marginally.

The Australian dollar retraced from US$0.74 earlier in the session to close at US$0.737.

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