All eyes are on the Australian share market for Friday after US markets posted large rises. This follows a strong start to the US earnings season. Investor sentiment was positive as third-quarter results flowed from companies such as Bank of America, Wells Fargo, Citi, Dominos, and Morgan Stanley.
It appears Australian shares will follow in tow, with S&P/ASX 200 Index (ASX: XJO) futures indicating a 0.55% move higher to 7366.9 points.
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What happened overnight?
The S&P 500 quickly rose after opening overnight following a flurry of earnings reported on Wall Street. Investors were treated to the biggest rally in the US market since March as a number of earnings exceeded expectations.
For instance, financial services giant Wells Fargo & Co (NYSE: WFC) posted a 60% increase in profits, with revenue topping expectations. This was a commonality among many US companies that reported overnight, instilling optimism in the market. Consequently, optimism among investors has spilled over to ASX futures on Friday.
At the end of the US session, the S&P 500 finished 1.71% higher. Meanwhile, the Nasdaq Composite and Dow Jones Industrial Average climbed 1.73% and 1.56% respectively. Pulling these indexes higher were some of the bigger financial services companies in the United States. These included a 4.5% gain in Bank of America Corp (NYSE: BAC), a 2.5% rise in Morgan Stanley (NYSE: MS), and a 2.4% rally in Charles Schwab Corporation (NYSE: SCHW).
Commenting on the performance overnight, Oanda senior market analyst Edward Moya said:
The banks painted a strong and healthy picture of the US consumer. Wall Street can't turn negative on the economy after seeing reserve releases, moderating trading revenue, mixed loan growth, and a consumer willing to take on debt.
Meanwhile, ASX futures are pointing higher despite Rio Tinto Limited (ASX: RIO) cutting its iron ore production guidance on Friday morning. The mining giant shared this information in its quarterly update this morning.
Moving ASX futures today
Aussie energy shares will be in the spotlight again today as the price of oil continues to ascend. According to Bloomberg, the price of WTI crude oil per barrel is now US$81.36. As a result, companies such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) will be in focus.
On top of this, gold miners will likely have their fair share of attention today as the price of the precious commodity inched higher overnight. The spot gold price gained 0.2% to US$1,798.9 an ounce as inflation fears circle.
For the full list of what is ahead on Friday, check out our other article, summarising the ASX markets.
