ASX to open stronger after sleepy Wall Street session

The Australian sharemarket is tipped to open stronger after a quiet post-holiday session on Wall Street, where the latest data on jobless claims did little to change the minds of investors on where interest rates are headed next.

The ASX 200 futures were up 0.2 per cent to 8,217 points as of 7.50 AEDT, while the Australian dollar was down 0.3 per cent to 62.19 US cents.

Overnight, US stocks struggled to gain traction after a rally that sent the S&P 500 to its best Christmas Eve performance since 1974, according to data compiled by Bespoke Investment Group. With major European markets closed, volume in the US equity gauge was well below the average of the past month.

The S&P 500 hovered near 6,043 points, while the Nasdaq edged up 0.1 per cent to 20,055 points. The Dow Jones Industrial Average was little changed. Most megacaps fell, though Apple outperformed after a bullish note from Wedbush. GameStop rallied after an X post from Keith Gill, the online persona known as Roaring Kitty.

Wall Street took the latest economic data in its stride. Recurring applications for US unemployment benefits rose to the highest in more than three years, adding to signs that it is taking longer for out-of-work people to find a job. Initial claims, meanwhile, ticked down to 219,000 in the week ended December 21.

“Eco data is a non-event until we move into the new year,” said Kenny Polcari at SlateStone Wealth. “Christmas is behind us, but the New Year is ahead of us. Volumes will remain muted.”

To Jonathan Krinsky at BTIG, the market can continue to make upside progress into year-end, hitting a fresh all-time high for the S&P 500 above 6,100. Looking ahead to January, however, he thinks volatility will re-emerge.

“If the S&P 500 does make new highs, there are going to be massive divergences in breadth and momentum, which is another red flag as we get into January,” he noted.