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Current Futures: Dow +28.00, S&P +3.30, NASDAQ +3.75
Asian markets rose for the first time in the last three days of trading, also pulling higher the U.S. futures. Asian markets advanced helped by the gains seen in commodity stocks.
Commodity stocks gained ground during the Asian session, as crude oil and metals posted important gains lately. Crude managed to break and hold above the $60 benchmark level, while metals advanced substantially over the course of the last few weeks of trading. TheLFB-Forex.com Trade Team said that the price fluctuations in commodity markets are directly reflected in the companies that produce and manufacture raw materials, since it will affect their profit margin. As such, an investor can gauge the company’s outlook by analyzing the commodity markets.
To justify the gains observed in raw materials, the Baltic Dry Index reached the highest level since October 2008 on Friday. The index is a very good indicator that demand is picking up, since it measures the shipping cost for commodities. Until now, the index had a very strong relationship with the commodity markets, but during the credit crisis, the index lost more than 90% of its value just in a few months of trading.
Remaining in the commodity sector, PetroChina said it would buy Singapore Petroleum, a mid-size oil and gas company. Consequently, Singapore Petroleum surged 24% tonight as trade desks ran risk arbitrages between the offered and the market price. As a note, PetroChina was the first company to reach a trillion dollar market cap.
Overnight, the Japanese Nikkei gained 156.42 points (1.70%) to 9,382.24. The Australian S&P/Asx fell 18.90 points (0.50%) to 3,743.70.
Crude oil for June delivery was recently trading at $61.90 per barrel, higher by $0.20.
Gold for June delivery was recently trading lower by $2.30 to $956.60.
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