Wall St hits fresh records as as oil hits one-month high

The ASX is set for a positive start after oil prices rose and US stocks managed another triple-record day.

Rising oil prices boosted energy and mining stocks on Wall St. Picture: Drew Angerer/Getty Images/AFP.

US stocks rose to fresh records overnight, led by gains in commodity-linked shares as crude oil prices reached a one-month high.

European shares were modestly higher as several traders took public holidays. European markets are also waiting for the first official data from Britain since the Brexit vote.

The positive global leads are set to boost the Australian market this morning, with ASX futures seven points higher at 6.35am (AEST).

Shares of US mining and chemical companies climbed, while energy shares gained 0.6 per cent as oil climbed again after posting its best week since April. US crude futures rose 2.8 per cent to settle at $US45.74 a barrel, extending gains in the wake of last week’s signals that major producers may consider working to cap production.

Those gains have helped boost stocks in recent sessions. The S&P 500 has risen for six of the past seven weeks.

Overnight (AEST), the Dow Jones Industrial Average rose 60 points, or 0.3 per cent, to 18636. The S&P 500 added 0.3 per cent, while the Nasdaq Composite climbed 0.6 per cent.

Retail companies are providing the bulk of earnings reports in the S&P 500 over the next two weeks, according to FactSet, after better-than-expected results from J.C. Penny and Nordstrom helped lift consumer shares last week. Nordstrom and Kohl’s were among the biggest gainers in the index, though disappointing retail sales data released Friday helped bolster investors’ expectations that the Federal Reserve isn’t likely to raise interest rates soon.

Fed-funds futures, used by investors to place bets on central bank policy, show a less-than-50 per cent probability of a rate rise by December, according to CME Group.

Expectations for more central bank accommodation should continue to support equities, analysts said, even amid mixed economic data and relatively high valuations on US stocks.

While dependence on central bank stimulus is “not healthy or good,” it should “keep the show going,” said Alastair Winter, chief economist at Daniel Stewart & Company.

“I think the US equity market is going to be up and down in a range,” he said, noting earnings have likely been through the worst, but economic growth is unlikely to support much more of a rally.

The WSJ Dollar Index inched lower, with the dollar recently down less than 0.1 per cent against the yen.

The yield on the 10-year Treasury note was at 1.554 per cent, compared with 1.515 per cent Friday. Yields move inversely to prices.

When long-term bond yields are as low as they are, equities become much more attractive, even if corporate profits disappoint, said Ian Williams, strategist at brokerage Peel Hunt.

The trend for lower yields in government bonds is unlikely to reverse in the near future unless central banks change course or inflation picks up markedly, he said, noting that both events are unlikely in the short term. US core inflation data is due to be released on Tuesday.

Asian shares mostly advanced Monday, with the while the Stoxx Europe 600 finished flat.

Earlier, the Shanghai Composite Index rose 2.4 per cent, led by shares of brokerages, after Hong Kong Economic Journal reported that a start date for the Shenzhen-Hong Kong trading link could be announced as soon as this week. The link would let Hong Kong investors buy Shenzhen stocks and Shenzhen investors buy Hong Kongstocks.

Chinese blue-chip stocks also rose after data showed mortgage lending drove China’s new-loan growth last month.

Markets elsewhere in Asia rose, although Japan’s Nikkei Stock Average closed with a loss of 0.3 per cent after Japanese growth figures missed expectations.

Japan’s economy nearly stalled in the second quarter amid falling exports and weak corporate investment, figures showed, while revised data from the Bank of Japan also pointed to weaker underlying inflation.

Analysts said the Assumption Day holiday in Europe and August summer holidays globally are keeping trading volumes thin.

Dow Jones