Good morning and welcome to another week on the ABC markets and finance blog.

Stephen Letts from ABC business team limbering up for a blow-by-blow coverage of the day’s events, where every post is hopefully a winner, but none should be construed as financial advice.

The ASX looks like enjoying a solid start to the week after US investors regained their appetite for risk, driving up all the key Wall Street indices.

Futures trading over the weekend points to the ASX 200 rising around 0.8% on opening.

The S&P 500 rose 1.1% on Friday, while the Nasdaq had a better day up 1% as buyers went back to have a punt on the megacap tech stocks – Meta Platforms (home to Facebook, Instagram and others) was in vanguard, up 2.7%.

The blue-chip Dow Jones Industrial Average enjoyed a bigger bounce (+1.6%) added by a strong result from 3M which enjoyed its largest one-day gain (+23%) in decades on a much better than expected profit result.

Small cap stocks continued to outperform the “megacaps” with the Russell 2000 also gaining 1.6% and is up more than 10% for the month.

On the bond market, US 10-year Treasuries turned marginally lower on modest PCE inflation data.

Given that markets are pricing in a US rate cut in September as a near certainty that response is not surprising.

Jobs data later this week will be the next fork-in-the road moment for US rates.

On commodity markets, oil prices fell on declining Chinese demand.

Brent crude settled 1.5% lower at $US81.13/barrel while West Texas Intermediate crude dropped 1.4%, lower at $US77.16/barrel.

For the week, Brent was down more than 1% while WTI fell more than 3%.

Data released last week showing that China’s total fuel oil imports dropped 11% in the first half of 2024 have raised concern about the wider demand outlook in China.

Gold rose 1% to $2,382/ounce in sync with a fall in US Treasuries and the tightening in betting on September rate cut.

The pressure on commodity prices amid concerns over China’s growth has also put pressure on the Australian dollar.

While the $A edged up over the weekend, it is still trading below 65.50 US cents.

However, iron ore prices gained 2.3% while gold (+1.2%) and Aluminium (+0.8%) were also higher. 

That’s where stand, so to steal a phrase, “Let the markets begin”.

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