US Equities Gain As Oil Rallies, Apple Inc. Jumps As Warren Buffet Buys, ETF's Added Most Physical Gold Since Q1 2009, ASX SPI200 Futures Up 47 Points

US equity markets gained on Monday following a rally in oil prices that boosted broader commodities. The S&P500 finished 0.98% higher as energy shares led gains while the Nasdaq100 was also higher, up 1.25% as Apple Inc. gained 3.71% on disclosure that Warren Buffets Berkshire Hathaway Inc. had purchased up to $1.07 billion of the shares. All ten of the S&P500’s main industries were bid, with the largest gains coming from Basic Materials and Oil & Gas up 2.02% & 1.58% respectively while Telecommunications & Utilities lagged with modest gains of 0.44% & 0.14%.

Brent & WTI crude oil gained 2.59% & 3.27% respectively on continued disruptions including rebel attacks on oil fields in Nigeria & Libya, lost output as a result of a wildfires in Canada and data that showed Chinese plants increased refining by 2.4% from year earlier. While Back Hughes Inc. said on Friday that’s rigs targeting crude fell by another 10 last week to 318, the big market event coming up is the June 2nd meeting between the Organization of Petroleum Exporting Countries to review the market and discuss a potential output freeze – although with the continued rally in oil prices I find this scenario less likely. 

Spot gold prices gained 0.06% on Monday as the US Dollar posted modest gains, recent data has showed that exchange traded funds (ETF’s), such as SPDR Gold Shares (GLD), continued to buy physical bullion at the fastest pace since Q1 2009 while speculators such as hedge funds pushing the price higher in the paper markets. The chart below highlights the spot gold price, which may begin to move higher following a two week corrective period after reaching the highest levels since January 2015.   

Following a 7.5% decline over the past month the Australian Dollar gained 0.34% on Monday ahead of the release of the minutes from the May meeting of the Reserve Bank of Australia on Tuesday at 11:30am Sydney time. The ASX200 gained 29.96 points (+0.56%) while ASX SPI200 futures are up a further 47 points in overnight trading, suggesting a stronger open this morning.

Data releases:

·         RBA May Meet Minutes 11:30am AEST

·         RBNZ Two Year Inflation Expectations (Q2) 1:00pm AEST

·         GBP CPI (MoM & YoY Apr) 6:30pm AEST

·         US CPI (MoM & YoY Apr) 10:30pm AEST

·         US Housing Starts & Building Permits (MoM Apr) 10:30pm AEST

·         US Industrial Production (Apr) 11:15pm AEST

Source: Rivkin, Bloomberg, Updata

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This article was written by James Woods - Global Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via or by phoning +612 8302 3600.

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This article contains information about foreign exchange contracts, which are considered complex financial products. Please click here to read ASIC's foreign exchange trading article before considering an investment in foreign exchange contracts. 

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