Easily the best week of the year in some cases, certainly the best since March and May for others: for Japan, a very subdued five days of trading as the growing political instability overshadowed the improving tone of economic news.
Europe and the US bounced strongly, driving global markets up nearly 7% over the week: but Asia rose by less than half of that: under 3%.
Driven by an 80% jump in China, the region has already had its big rally and investors have grown cautious about its future.
US investors liked the news flow last week, but are still wary about the quality of the earnings and sales being reported.
A few doubtful reports this week will trigger a renewed bout of scepticism.
American shares had their best week in four months last week as they reacted positively to the early earnings results and better economic news on output and housing.
Friday saw a flat end as investors marked time to assess a good report from IBM; a poor result from General Electric Co for yet another quarter and indifferent earnings from Bank of America and Citigroup, both of which would have had losses if it hadn’t been from asset sales
IBM boosted its profit outlook for the year after the close on Thursday, but Friday saw the market hesitate as investors gave the thumbs down to GE, Bank of America Corp and Citi’s’ indifferent numbers.
Both were not in the same league as the rip roaring Goldman Sachs result, Intel’s bullish figures or the solid JPMorgan release earlier in the week.
The Dow rose 32.12 points to 8,743.94, but the Standard & Poor’s 500 Index eased a tiny 0.36 of a point, to 940.38. Nasdaq added 1.58 points to 1,886.61. So hardly a stunning day’s trading.
All three indexes recorded their best week since mid-March, as both the Dow and the S&P 500 ended four-week losing streaks.
Analysts said the week’s gains has restarted the rally from March 9, when the S&P 500 hit a 12-year closing low.
For the week, the Dow rose 7.3%, the S&P 500 gained 7% and the Nasdaq climbed 7.4%; all in all a fairly widespread rebound..
In Europe the markets had a similar week with the best week this year so far.
The Dow Jones Stoxx 600 Index jumped 68% last week in its biggest rise since last November. It is now up 33% since the low on March 9.
That surge was reflected in the way Euromarkets moved over the week.
Europe’s 18 major markets all rose strongly: France’s CAC 30 jumped 7.9%.
German shares rose for a fifth straight day on Friday; the DAX Index had its biggest weekly rally this year.
The DAX rose 0.4% Friday to bring the week’s gain to 8.8%.
That cut the fall from June 2 (its most recent peak) to 3.2%.
London’s FTSE 100 had its biggest weekly advance since January.
Friday saw the market add 0.6%, to 4,388.75, the highest level since June 12.
The FTSE 100 jumped 6.3% last week and while it was the best rise since January, it is still down 2.6% from the most recent peak on June 1.
In Asia it was a different story. The MSCI Asia Pacific Index rose 2.7% over the week.
That was solid, but more restrained that in Europe and the US.
Markets in Asia have had a bigger run as the mostly emerging market economies seem to have bounced earlier than those in the developed world.
China’s recovery has helped: but the 7.9% second quarter annual growth figure failed to ignite another sharp rise late in the week.
South Korea, Australia and Singapore all seem to be now travelling a bit better than several months ago, but Japan isn’t as the political instability and infighting in the Government dampens enthusiasm among investors, local and foreign.
The MSCI Index in Asia is now up 47% so far this rally (from the five year low on March 9)
The MSCI World Index rose 6.7% last week, the biggest from March, but from that its clear Asia was left behind by the US and Europe.
Hong Kong’s Hang Seng Index climbed 6.2% but Japan’s Nikkei could only manage a 1.2% gain.
Half that came on Friday when the index rose 0.6%.
Jakarta fell Friday after the bombing of two hotels in Jakarta.
Singapore’s Straits Times Index jumped 5.3%, after the trade ministry said gross domestic product will now only shrink between 4% and 6% this year, less than an earlier forecast for a contraction of up to 9%.
Australian stocks ended up for the week, but investors now have to confront the local reporting season which starts this week.
The ASX 200 index was down 5.2 points at 4000.8, after earlier rising as high as 4026.7. The All Ordinaries lost 5.1 points to end at 3992.9 points.
The market rose 5.4%, the best week in 16 for the Australian market.
While stocks lost some steam during the day, a gain of 5.4 per cent meant it was still the strongest week for the ASX200 in 16 weeks.
