Gold made the headlines (but not in Australian dollars), copper made the gains, as did sugar and oil, while equity markets shrugged off September’s reputation for losses and posted very solid gains.
So now it’s on to October with all the memories of 1929 and 1987 to confront the newly confident investor, then the end of December and 2010.
The Australian dollar soared 8.6% in September to peak at 97.32 US cents overnight, a new 26 month high.
It finished around 96.70 USc in New York.
The rise marks the currency’s second best monthly performance – after May 2009 – since it was floated in 1983.
It’s now trading at highs not seen since July 2008, before the global financial crisis intensified and sent the dollar slumping into the 60 cent range.
Against the US dollar it rose more than 11% in the September quarter, but only 8.4% on the trade weighted index because of the continued strength of the yen and the euro limited gains against those currencies, especially last month.
The dollar gained just over 12 USc in the quarter
On the sharemarket, the ASX 200 rose 4% over the past month, despite September normally being a tough month for stocks. the All Ords was up 4.6%.
The Index underperformed indexes elsewhere unadjusted for currency changes.
But when the rise in the market is adjusted for the rise in the value of the Australian dollar, the market is up by around 13%, greater than all the other indices except the CAC 40 in Paris and the OMX Stockholm 30 in Sweden.
On that basis, the US markets were negative to break even in Australian dollar terms..
The local market rose by around 6.5% in the September quarter, the biggest rise since the same quarter as 2009 when it climbed more than 20%
The market ended the September 2009 quarter at 4870, yesterday it finished at 4582 (for the ASX 200), so it is still clearly down on a year ago by around 6%.
That was after an 11.6% slump in the June quarter.
The solid September rally means most super funds with exposure to local shares should do well, but those with exposure offshore won’t because the rise in the value of the dollar will have slashed returns, even after some of the gains on Wall Street, for example.
Best performing shares included Lynas, up 150% for the quarter, OZ Minerals rose 51%, Elders, 48% and Linc Energy, 84%.
Cudeco was the worst, down 57%, with Nufarm next off 33%. Telstra fell 19.4% (ouch). Ten Network, 14.0%.
The Dow industrials rose 7.7% and the S&P 500 gained 8.8%, with both having the best September in 71 years. The Nasdaq jumped 12% for the month,
The S&P 500 gained 10.7% in the September quarter, which was the best in a year and is up around 7% for the year to September.
The Dow is up around 3% for the year so far and 10.7% for the quarter as well and is also up 10.7% for the 12 months to September.
So all Wall Steet’s gains have come from the quarter, and especially from the strong September.
These gains were struck on quite low trading volumes, which is a cautionary note. The urge to reinvest has not taken hold among US investors of all sizes.
The MSCI Asia Pacific Index dropped yesterday from five month highs and closed the month up around 8.6% and 12% for the quarter.
Japanese shares fell 2% on Thursday, but had a 6.2% rise in the month.
Shanghai rose Thursday, and was up around 11% for the quarter, the best for a year.
It is still down 21% for the year so far, despite the rebound.
Europe’s Stoxx 600 Index fell on Thursday, cutting the month’s gain to 3.4% and the quarter’s rise to 6.7%. It is still 4.6% under its peak in April.
London was up 6.2% for the month and 15% for the quarter.
It is now up 8% for the 12 months to September.
Even though gold got the headlines, copper starred among the metals with a 24% rise in the quarter.
Copper prices are up 35% in the past year.
Gold was up around 5% for the month and the quarter and is up 32% over the past year.
It finished at $US1,309.20 an ounce Friday morning in New York. It hit an intraday high of US$1,317.50 an ounce.
Sugar prices jumped more than 20% in September, despite a big fall Thursday. They rose 46% in the quarter.
Oil prices rose 11.2% in September, the best monthly rise since May 2009 when crude leapt 29.7%.
Oil added 5.7% in the quarter, so it was much less popular compared with gold and copper, the two other commodities that usually attract a lot of speculative and investor interest.
Oil added $US2.11 at $US79.97 overnight, its highest close for some weeks.
And US Treasuries finished with solid gains, but they closed a touch higher in some cases overnight.
Yields on the 10 year bonds finished at 2.52%, up from the 2.48% at the end of August, but down from the 2.95% at the end of June.
That was third quarterly fall in a row.
At the short end, yields on two year bonds finished at 0.43%, down from 0.49% in August and 0.62% at the end of June.
That’s telling us that despite the fun and games in commodities and equities, for the hard heads of the market, deflation and the concerns about quantitative easing by the Fed haven’t gone away.
According to Bank of America Merrill Lynch, over the past three months, US Treasuries as a group have returned 2.8%; they are up 8.8% for the year so far.
That’s more than twice the gains on Wall Street which were only improved by the stellar September rally.
