ASX set to jump as Wall Street rally gains steam
Wall Street's main indexes rose for a fourth straight session on Monday (US time) on optimism that a coronavirus relief package would eventually come around, while investors geared up for the third-quarter corporate earnings season.
Technology stocks provided the biggest boost to all three main indexes as Apple jumped 5.3 per cent ahead of a special event on Tuesday, which most analysts believe will be used to unveil the new iPhone with 5G capabilities.
Wall Street jumped higher to start the week. Credit:AP
Amazon.com climbed 5.1 per cent ahead of its annual Prime Day shopping event on October 13 and 14.
In mid-afternoon trade, the Dow has added 1.1 per cent, the S&P 500 is up 2 per cent and the Nasdaq has surged by 3.3 per cent. It sets up the ASX for gains, with futures at 5.15am AEDT pointing to a jump of 46 points, or 0.8 per cent, at the open.
The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill as negotiations on a broader package ran into resistance.
"The market has come to a realisation that stimulus is going to be coming ... no matter who is the president. It's probably going to be coming about a month out from now," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth.
A recent Reuters/Ipsos poll showed Americans were steadily losing confidence in President Donald Trump's handling of the COVID-19 pandemic, with his net approval on the issue hitting a record low.
Growing expectations of a Democratic win in next month's presidential election have also helped Wall Street's main indexes climb to one-month highs as a victory for Democratic nominee Joe Biden could ease the trade war with China and resulting tariff pressures on the US economy.
The S&P 500 was less than 2 per cent away from surpassing its record closing high from September 2 that would mark a complete recovery from a 9 per cent pullback.
With the October 15 presidential debate officially cancelled, Trump plans to travel to key battleground states this week as his doctor declared he was no longer a transmission risk for the novel coronavirus.
Results from big US banks will be in focus this week, with JPMorgan & Co and Citigroup set to report on Tuesday. Bank shares gained 0.6 per cent.
Overall, analysts expect third-quarter earnings for S&P 500 companies to fall 20.7 per cent from a year earlier, smaller than a 30.6 per cent slump in the second quarter.
The consumer discretionary index hit an all-time high and, along with tech and communication services , rose the most among major S&P sectors.
The energy index was the weak spot, as oil prices dropped on easing supply worries.
Twitter gained 5 per cent after Deutsche Bank upgraded the social media company's shares to "buy" on expectations of continued growth in 2021.
Advancing issues outnumbered decliners by a 1.68-to-1 ratio on the NYSE and by a 1.49-to-1 ratio on the Nasdaq.
The S&P index recorded 65 new 52-week highs and no new low, while the Nasdaq recorded 149 new highs and 10 new lows.
Reuters
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