Local shares are poised to open higher, lifted by gains on Wall Street as the Fed signalled it's nowhere near abandoning its stimulus efforts.
What you need2know
SPI futures up 61pts to 5255
AUD at 72.58 US cents, 87.04 Japanese yen, 64.39 Euro cents, 47.26 British pence
On Wall St, in late trade, S&P 500 +0.8%, Dow +0.8%, Nasdaq +0.3%
In Europe, Stoxx 50 flat, FTSE +0.6%, CAC +0.2%, DAX +0.2%
Spot gold down $US5 or 0.4% to $US1140.54/ounce
Brent crude up $US1.85 or 3.6% to $US53.18/barrel
What's on today
Australia housing finance; US import price index, wholesale inventories; Nobel Peace Prize winner to be announced (Friday 11am CET).
Stocks in focus
UBS' Australian equities team reviewed the S&P/ASX200 to identify which stocks were now good value after the index shed 12.3 per cent since its peak in April and resources stocks were hit particularly hard. Lead strategist David Cassidy said they had assessed the stocks based on absolute value and relative value as well as projected or normalised value. They found picks across a range of industries, including Lend Lease Group, Bendigo Bank, Qantas Airways and CSR.
Morgans retains an "add" recommendation on Ramsay Healthcare and has a target price of $73.11 a share. Australia's largest private hospital operator has expanded its operations into the UK, France and parts of Asia and around 25 per cent of revenue is now generated overseas, Morgans notes.
Bell Potter says SurfStitch "remains one of our key picks given its long-term growth outlook, strategy and current valuation". Bell Potter has a $2.25 a share target price and a "buy" recommendation on Australia's largest online retailer and the world's largest online action sports and youth apparel retailer.
Currencies
The Fed thought the economy was close to warranting an interest rate hike in September but policymakers decided it was prudent to wait. The FOMC noted that domestic economic conditions, including data on consumer spending and housing, had continued to improve, and the labor market had reached or was close to the committee's long-run estimates for unemployment.
The Federal Reserve should consider ways to make monetary policy more accommodative, including negative interest rates, said Minneapolis Fed president Narayana Kocherlakota. "I don't see raising the target range for the fed funds rate above its current low level in 2015 or 2016 as being consistent with the pursuit of the kind of labour market outcomes that we are charged with delivering," Kocherlakota said in remarks for a speech.
Commodities
Chinese smelters are stashing away copper to sell later when prices are higher, leading to a draw down in inventories from other warehouses. Stockpiles tracked by the London Metal Exchange are at a seven-month low and China's bonded warehouses reported a 22 per cent drop last month. While there's no official data on the size of the smelters' holdings, Bloomberg Intelligence analyst Kenneth Hoffman said his analysis shows there's no overall increase in demand, so supplies are likely shifting to other storage facilities.
A "new capital discipline" in the oil industry will allow demand to catch up with supplies, boosting prices, according to Gary Ross, founder and chairman of PIRA Energy Group. Demand will climb more this year than previously projected amid cheaper fuel prices, OPEC Secretary-General Abdalla Salem El-Badri said on Wednesday in a statement to the International Monetary Fund. "The most significant development now is the OPEC secretary general talking up the demand number," Bob Yawger, director of the futures division at Mizuho Securities USA in New York, said by phone. "He's also predicting a significant drop in production growth, which is adding support."
United States
US stocks advanced as energy and raw-material companies extended gains after Federal Reserve minutes, while the Standard & Poor's 500 Index rose above a level where recent rallies stalled.
A report showed filings for unemployment benefits declined last week to the lowest level since mid-July, extending a run of applications near decade lows that shows dismissals remain in check. Managers are reluctant to trim staffing levels because domestic demand is holding up in the face of diminished global growth expectations.
Netflix, the world's dominant paid online video service, is raising the price of its most popular streaming subscription by $US1 a month to $US9.99 for new customers in the US, Canada and parts of Latin America following a similar move in Europe this year.
Automated selling from quantitative funds that worsened the August correction in US equities will subside, making life easier for investors who select stocks based on things like earnings, according to a new note from JPMorgan Chase & Co strategist Marko Kolanovic whose bearish research preceded the selloff.
Europe
European shares were little changed on Thursday, with profit taking across several sectors offset by stronger auto stocks, while Deutsche Bank was volatile after rigorously cleaning up its balance sheet.
Deutsche Bank shares fell as much as 3.6 per cent after it said late on Wednesday that it made a record pre-tax loss of 6 billion euros. But they recovered and were down 0.8 per cent with some analysts arguing that the company's decision to cut or skip dividend payments would allow it to avoid a capital increase.
Fiat Chrysler rose 3.5 per cent on optimism around the listing of its luxury sports car unit Ferrari in the second part of October. A labour deal with US trade unions workers that averted a threatened strike was also seen as positive. Ferrari's coveted status as a maker of cars for the super rich is helping push up its value in an initial public offering to as much as €11 billion, according to people familiar with the matter.
Credit Suisse fell 3.8 per cent after the Financial Times said the Swiss bank was preparing to launch a "substantial capital raising" when it unveils its strategy on October 21.
What happened yesterday
The Australian sharemarket managed to rack up its fourth straight day of gains despite a strong early rally being almost derailed by a poor return to trade on Chinese exchanges following a week-long holiday. The S&P/ASX 200 finished the day at 5210.4, up by 0.2 per cent or 12.5 points while the All Ordinaries closed at 5241.4 points, up 13 per cent or 0.25 points.
