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Wall Street rally augurs well for local stocks

Wall Street’s record run should help push the local stocks higher this morning.

Wall Street’s record-breaking run should help push the local market higher this morning, but a lower iron ore price could keep gains in check.

The futures market is pointing to a lift of 31 points, or half a per cent, when trading opens.

CommSec chief economist Craig James said the positive overseas leads were a good sign for the local market.

“We have got a tremendous lead-in from overseas with record-breaking efforts from the US, with the Dow Jones up over 228 points,” he said. “That does augur well for our market.”

Wall Street finished the week on a high on Friday, with the three main US indices all hitting records as the earnings season kicked off. A government report confirming US retailers enjoyed a bumper Christmas season boosted stocks.

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“What might hold our market back is the iron ore price was down by 1.3 per cent to $US78.30 and some of the base metals, including copper, were a little bit softer,” Mr James said. “The Aussie dollar’s also popped its head above US79c, so that will also hurt exporters.”

The energy sector and gold stocks should get a boost from higher oil and gold prices.

While the local market is set to start the week in positive territory, a lack of guidance ahead of today’s session, due to the US public holiday for Martin Luther King Jr Day, could see a little bit of hesitancy from investors.

Financial indicators released in the coming week include December jobs data, ANZ-Roy Morgan consumer confidence figures, and November’s housing and lending finance numbers, all of which could affect the Australian dollar and sharemarkets.

They’ll also factor into interest rate expectations for the Reserve Bank’s first meeting of 2018 in February. Chinese economic data to watch include economic growth figures and retail sales.

Meanwhile, US earnings season continues, with results expected from Citigroup, Goldman Sachs, Bank of America, American Express and Morgan Stanley.

Additional reporting: AAP

Original URL: https://www.theaustralian.com.au/business/markets/wall-street-rally-augurs-well-for-local-stocks/news-story/0c9973fa4fa9b54b38e3039ab607b860